More concerning in the near-term is the fact that some market observers believe the path of least resistance for copper is lower. JJC’s laggard status could morph into an all out decline as copper prices approach a critical technical juncture. While production cuts may support prices now, the bounce in the copper market may be short lived as fundamental factors remain weak.
Other industrial started rising before copper. Supporting the recent gains in base metal prices, markets saw improving data from China, the world’s largest consumer of industrial metals. However, some are beginning to doubt the sustainability of the metal market, pointing to signs of potential weakness in Chinese growth ahead.
Still, there are some important technical signs for copper.
“In addition, Tuesday’s highs also stalled near the convergence of the 20 and 200-day moving averages. Since early August we have seen prices starting to consolidate with an upper boundary forming at 2.2200 and a floor setting up at 2.0600,” adds Options Express.
For more information on the copper market, visit our copper category.