Copper prices rallied this week as a weaker dollar influenced the London Metal Exchange and futures for the metal surged to a three-day high on Tuesday.
According to a report from The Wall Street Journal, three-month copper on the LME was up 0.8% in yesterday’s European trade. Copper prices increased 7% from the start of 2016 to mid-March due in part to seasonal demand, but have since died down over economic concern in top consumer China. Before this week, we were back where we were in early January as it relates to copper prices.
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“On balance, we would not be surprised to see prices edge lower in the short term, but we would expect good dip buying to provide support and eventually lead prices higher,” William Adams, head of research at Fastmarkets, told the WSJ.
Rising oil prices also contributed to this week’s rally in copper prices. It’s important to note that copper and oil are often grouped together as part of commodities in a fund, so significant increases in oil value usually correlate to the same for copper.
“Copper prices got some relief after a continued rally in crude oil,” confirmed ANZ Research, to the WSJ.
Previously Suffering Copper
This latest development in copper prices mid-week comes on the heels of recent analysis from our own Raul de Frutos that found the gains made in Q1 have already begun to dwindle under a new “bear attack.”
“To believe this bear market is over, we would need to see these metals making significant upside moves,” de Frutos said. “So far we are not seeing that. The latest decline in copper prices supports this view.”
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