Copper Prices Refresh All-Time HighsTechnicals Suggesting a Correction to Support for Copper
The metals complex has been on fire; copper futures (COMEX) recently touched gloves with a fresh record high of $5.1990 per pound. This followed last week printing its largest one-week gain (+8.3%) since early February 2022.
You may also note that the metal shook hands with a 1.272% Fibonacci projection ratio at $5.1060 (many harmonic traders will view this as an ‘alternate’ AB=CD ratio) and, as of current prices, price action is forming what many technical analysts will recognise as a bearish shooting star candlestick formation.
Should a correction occur from current prices, as suggested by the chart’s Relative Strength Index (RSI) closing in on levels not seen since May 2021 (indicator resistance at 83.82), support warrants attention at $4.8890.
What is Driving the Metals Markets?
This is a tricky one at the moment.
The surge in copper could be based on the expectation of Chinese demand. According to a post from Reuters, ‘China's finance ministry plans to start raising 1 trillion yuan ($138 billion) in long-awaited, long-term special treasury bonds this week to raise funds it will use to stimulate key sectors of its flagging economy’. Fuelling further buying, of course, will be speculation and the Fear of Missing Out (FOMO).
It is also interesting to see the price of gold refresh all-time highs of $2,450 simultaneously, as copper and gold tend to offer different economic signals. Some desks claim central bank buying is behind the rally in gold.
