In a year of struggles for many commodities exchange traded products, the iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca:JJC) is standing tall with a gain of more than 6%. Over the past week, the copper exchange traded note (ETN) is up nearly 2%, indicating it could be ready to deliver more upside.
Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows.
“Over the past three years it also has created another series of lower highs reflected. Doc Copper could be attempting to do something it hasn’t for years,” according to ETF Daily News. “A breakout attempt could be in play this week, as Doc Copper is testing falling resistance line. A breakout here and above highs hit earlier this year, would send bullish message to Copper.”
Similar to index-based exchange traded funds, ETNs also track some sort of index as part of their investment strategy. However, an exchange traded note, like the name implies, is a type of debt note that trades on an exchange. Additionally, the underwriting bank that issues ETN shares may choose to stop share creations.
While China is often seen as the dominant force behind copper’s price action, Trump’s pledge to bolster U.S. infrastructure is seen as the catalyst for the red metal’s sturdiness this year.
A near-term issue for copper is the ability of the Trump Administration to get its ambitious infrastructure efforts off the ground, something many market observers believe will not happen until next year. Additionally, if that effort does not approach the $1 trillion in expenditures promised by the president on the campaign trail, markets could be disappointed.
Copper prices are benefiting as investors anticipate greater demand out of China and increased infrastructure projects under President Donald Trump.
Copper miners are benefiting as well. For example, the Global X Copper Miners ETF (NYSEARCA:COPX) is up nearly 7% over the past week, bringing its year-to-date gain to 12.5%. COPX tracks the Solactive Global Copper Miners Index.
For more information on Copper ETFs, visit our Copper category.