Copper Extends Gains to Two Year Highs
Prices rally around 15% this month and break another threshold, hitting the highest levels in two years. The advance brings the record peak of 2022 in the spotlight (5.041) and given the improved supply-demand dynamics, that level looks within reach.
There is optimism around increased need for the non-ferrous metal due to the green energy transition and the recovery of the chip industry, largely fueled by the AI boom. The recent data from China – one of the world’s top consumers - also helped, as GDP rose more than expected in Q1. On the supply side, key mining companies have cut their 2024 production forecasts, while Chinese smelters have reportedly agreed to lower their output.
On the other hand, China’s post-pandemic recovery is bumpy and its critical property sector still in distress. The US economy is strong, but the recent preliminary GDP offered a warning sign and sticky inflation raises the bar for looser monetary policy. On the technical front, the RSI is overbought and Copper may be ripe for a pullback. However, daily closes below the EMA200 would be required for the bullish bias to halt and that looks like a toll order, while the downside appears well-protected.
Stratos Markets Limited (fxcm.com/uk):
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Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (fxcm.com/eu):
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Stratos Trading Pty. Limited (fxcm.com/au):
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There is optimism around increased need for the non-ferrous metal due to the green energy transition and the recovery of the chip industry, largely fueled by the AI boom. The recent data from China – one of the world’s top consumers - also helped, as GDP rose more than expected in Q1. On the supply side, key mining companies have cut their 2024 production forecasts, while Chinese smelters have reportedly agreed to lower their output.
On the other hand, China’s post-pandemic recovery is bumpy and its critical property sector still in distress. The US economy is strong, but the recent preliminary GDP offered a warning sign and sticky inflation raises the bar for looser monetary policy. On the technical front, the RSI is overbought and Copper may be ripe for a pullback. However, daily closes below the EMA200 would be required for the bullish bias to halt and that looks like a toll order, while the downside appears well-protected.
Stratos Markets Limited (fxcm.com/uk):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (fxcm.com/eu):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Stratos Trading Pty. Limited (fxcm.com/au):
Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at fxcm.com/au
Stratos Global LLC (fxcm.com/markets):
Losses can exceed deposits.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website:
Stratos Markets Limited clients please see: fxcm.com/uk/market-commentary/
Stratos Europe Ltd clients please see: fxcm.com/eu/market-commentary/
Stratos Trading Pty. Limited clients please see: fxcm.com/au/market-commentary/
Stratos Global LLC clients please see: fxcm.com/markets/market-commentary/
Past Performance is not an indicator of future results.
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