Energy & Critical Metals
Copper prices can surge ten times – billionaire investor says
Copper prices have come under intense pressure in the past few months as concerns about demand continued. The metal was trading at $3.75, where it has…
Copper prices have come under intense pressure in the past few months as concerns about demand continued. The metal was trading at $3.75, where it has been at recently. This price has dropped by more than 13% from its highest level this year.
Demand concerns continue
Copper price has moved sideways recently as concerns about the global economy continued. Data published this week showed that China’s and European manufacturing PMIs were lower than expected in June. The same trend is happening in the services sector, where the PMIs came short of expectations.
There are also signs that the American economic growth is slowing. Fed minutes published on Wednesday revealed that officials believe that the country’s economy will slowdown because of the tighter liquidity in the banking sector and higher interest rates.
Dr. Copper tends to be highly sensitive to the performance of the global economy because it is widely used in sensitive areas of the economy. Copper is widely used in the electric vehicle manufacturing, utilities, and construction sector.
On the positive side, copper inventories have dropped to the lowest level in 2008, as we wrote here. And in a recent interview, Robert Friedland, a legendary player in the copper industry made the case that prices could keep rising. Friedland is the billionaire founder of Ivanhoe, a leading mining company.
Watch here: https://www.youtube.com/embed/XorCJXL_fPE?feature=oembed
He made three key cases for copper. First, he believes that copper demand will continue rising in the coming years as the recovery keeps rising. This demand will also jump as countries transition to clean energy.
Second, mining copper is becoming more challenging because of the age of top mines. Finally, he noted that other metals like molybdenum have doubled. As such, he believes that copper prices could go up ten times in the long term.
Copper prices forecast
Turning to the daily chart, we see that the copper prices have moved sideways in the past few days. The metal has moved slightly below the 25-day and 50-day moving averages. Most importantly, it has formed a symmetrical triangle pattern that I have shown in orange. The MACD has moved to the neutral point.
Therefore, with the triangle pattern nearing its confluence level, there is a likelihood that copper will have a major breakout or breakdown soon. If this happens, the support and resistance levels to watch will be at $3.50 and $4.
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