Copper continues to be noisy, but the overall picture longer-term remains very strong.
After all, the artificial intelligence sector will demand a lot of it, along with the electrification of the economy.
Copper continues to offer plenty of opportunities as we had fallen pretty significantly early during the trading session on Wednesday but found buyers near the $6.50 level. The $6.50 level continues to be an area that a lot of traders will be watching closely as it was at the previous ceiling, now it offers a bit of a floor in the copper markets going forward.
The question now is, will this end up being a double top? I don't think so. I think any pullback at this point is a nice buying opportunity where we can, if we were to break down below the $6.50 level, could open up a move down to the $6.30 level. To the upside the $7 level is still a target, and I do believe that we are in a scenario where supply is nowhere near enough to satisfy the demand for copper.
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AI and of course electrification of almost everything will demand a lot of copper a lot more than we're producing now. And with the strait of Hormuz being closed it does make sense that there are concerns about the supply chain on top of that. This continues to be a big driver for pricing as well.
All things being equal, this is a market that goes much higher over the longer term. I have no interest whatsoever in shorting copper under pretty much any circumstance. This is one of the big winners for the next several years. This is not only a trade, but a potential investment at this point in time.
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