- Copper price races past 2011 highs to refresh record highs.
- Global commodity boom underpins copper amid falling Chinese imports.
- Weaker DXY, Chile’s approval of progressive tax rate also help boost copper.
The price of copper (futures on Comex) is extending its two-day rally, reaching the highest level on record above $4.70, surpassing 2011 highs of $4.6495.
Copper prices continue to draw support from a broadly weaker US dollar, as markets have pushed back the Fed’s tapering bets amid the US central bank’s pledge to continue with its accommodative monetary policy until its employment and inflation goals are achieved. A weaker greenback makes the USD-denominated copper cheaper for foreign buyers.
Further, Chile’s lower house approved a progressive rate on copper sales, which is seen as the heaviest tax burden in global mining and it could affect investments, in turn, boosting copper prices. Chile is the world’s leading copper-producing country.
Amid the ongoing uptrend, copper bulls ignore the reports that Chinese copper imports have fallen nearly 13% in April, as higher prices deter the buyers. Meanwhile, Comex copper tracks the futures on LME higher, the bulls took out the critical $10,000 levels on LME earlier this week.
Price of copper: Daily chart
Copper’s daily chart shows that the relentless rise in the prices has driven the 14-day Relative Strength Index (RSI) well into the overbought territory. This suggests that the price of copper risks a corrective pullback any time soon.
Copper prices are closing in on the upper boundary of the one-month-old rising wedge at $4.7088, which also backs a case for a potential move lower.
However, any pullbacks could be a good dip-buying opportunity, as the commodity supercycle seems to have just begun. Copper prices are up almost 29% so far this year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD continues to grind out further losses
EUR/USD continued to drift into the basement on Wednesday, clipping into a 54-week low and settling within touch range of 1.0550. Fiber continues to shed weight on the charts as broader FX markets pivot full-bore into holding the Greenback.
GBP/USD sheds weight for a fourth straight day on Wednesday
GBP/USD eased further into the low end on Wednesday, trimming further south of the 200-day Exponential Moving Average in a one-sided bearish decline as the pair closes in the red for a fourth consecutive trading day.
Gold extends slide to fresh two-month low
After shedding some ground throughout the first half of the day, the US Dollar is back in fashion. XAU/USD trades at its lowest in two months in the $2,580 region and is technically poised to extend its slump.
Australia unemployment rate expected to remain steady for third straight month in October
The Australian Unemployment Rate is foreseen stable at 4.1% in October. Employment Change is expected at 25K, much lower than the 51.6K posted in September. AUD/USD is under pressure and may soon pierce the 0.6500 mark.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.