Not only did the Dow see a “monster close” on Friday but the red metal was also on the rise. US copper futures were at a two week high as of Friday. Spot prices also climbed. Some believe demand will increase in China due to looser monetary policy and the end of the government mandated manufacturing slowdown, according to this Reuters article. And though the markets were buoyed by the US government rescue plan (still in the works as of this writing), not all indicators would suggest the price would stay high.
Rising inventory on all of the global exchanges combined with uncertain demand could limit copper’s upside. Inventory on the LME copper inventories increased by 5650 tons, now at a 19 month high, according to that same article. Comex inventories increased by 410 tons. The Shanghai Futures Exchange increased by 26%. You can read our price predictions here.