Copper continues to see a lot of noise at the moment, and the market will continue to see a lot of questions asked about supply. The markets continue to focus on buying. However, keep in mind that Friday was Juneteenth, a holiday in the USA.
Copper
The copper market has fallen pretty significantly during the trading session on Friday to test the 50-day EMA. That being said, we have bounced quite significantly as well, and this is a sign that there are a lot of underlying buying pressures in this market. The lack of holiday volume could also be at play here with the bounce. Maybe it was mainly position squaring heading into a 3-Day weekend.
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Copper, of course, will continue to see the 50-day EMA offer support, but more importantly, we have a lot of demand out there for copper going forward, either the artificial intelligence angle, the electrification angle, or just the lack of new production angle. The copper market is likely to go looking to the $4.50 level, possibly the $4.70 level.
Key Support Levels and Long-Term Demand
Ultimately, if we do break down below the $4.20 level, then it's likely that we will go looking to the $4.00 level. I doubt that is what happens, but it is something that you need to keep in the back of your mind because, quite frankly, it is a likely bad sign for commodities in general. Ultimately, when copper sells off, it can be a bad sign for the overall economy as well. Something to keep in mind.
Ultimately, this is one of those commodities I think over the longer term will jump quite significantly, and that to me suggests that all dips are eventually going to end up being buying opportunities. The first time that I see significant momentum to the upside on each dip, I'm willing to jump in and take advantage of what I think will be a longer-term thesis for the market.
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