The Copper Monthly Metals Index (MMI) rose by 3.5% for this month’s reading.
Copper had a phenomenal rally since 2020 that saw LME prices ascend nearly 132% to $10,720/mt in May 2021. Since the summer of 2021, however, price action indicates some consolidation after prices tested the $10,250/mt mark earlier in October.
From a technical perspective, prices appear to be trading sideways at a historical resistance level. As such, buyers should watch markets in the coming months for the appearance of a clearer market trend.
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Copper pushed upward after Fed decision
The Federal Reserve concluded its two-day meeting on Nov. 3, which pushed LME copper prices upwards.
Prices saw a 0.74% increase in one day following the Fed’s announcement that interest rates would remain near zero. Federal Reserve Chair Jerome Powell stated at the subsequent news conference, “We do not think it is a good time to raise interest rates because we want to see the labor market heal further.”
Powell’s statement triggered the S&P 500, the Nasdaq 100, the Dow Jones Industrial Average, as well as the Russell 2000 to close at all-time highs.
Alongside the pause in adjustments to interest rates, the Fed announced it would begin around mid-November to unwind the emergency stimulus measures put in place at the dawn of the pandemic, the Financial Times reported. The $120 billion monthly bond purchasing program is set to be gradually tapered. Purchase of treasury securities will fall by $10 billion per month while purchases of agency mortgage-backed securities will fall by $5 billion per month. The expected end point for this withdrawal is around June of 2022.