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Copper prices jumped to a five-month high on Tuesday. Chinese positive data (like the PMI and economic growth) and supply concerns have driven copper market sentiment, increasing the number of copper buyers and, therefore, the metal’s price.
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Source: FastMarkets/MetalMiner analysis
Trading volumes, for the first time this year, support the uptrend. Even if it is soon to be bullish on copper, copper could experience some additional price increases following this new uptrend. Investors seems to be willing to buy copper. In particular, Chinese buyers have bought copper based on lower stocks due to supply concerns, which also supports copper prices.
MetalMiner indicated a ceiling price for copper at $6,000. Since the beginning of the year, copper prices have traded below this level. However, copper prices broke this psychological ceiling twice in July, encouraging traders — who actually move copper prices— to buy more copper.
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Based on historical analysis, when copper prices breakout over $6,444/metric ton and are supported by high trading volumes, that could signal a new long-term uptrend. Buying organizations should watch the U.S. dollar and industrial metals, very closely.
A deeper analysis is discussed in detail in our Monthly Metal Buying Outlooks.