Teetering . . . .
Spot copper closed at $2.7535 on Friday, hanging on by just a thread, and right on a key support line. At the risk of repetition, the past two months have been very challenging for copper and the rest of the base and precious metals complex.
And part of what makes it so exasperating, is that the fundamentals have not changed a great deal – to the contrary, many influencing factors would suggest that prices should not have fallen as hard, or as fast as they have. We just saw the best GDP report in years, and other broad measures like the Institute For Supply Management’ Manufacturing Index are still in a growth mode, and lest we forget that inventories of copper have fallen some 275,000 MT, or 30 % since April.
But we aren’t arguing with the market, because we are reminded time and time again, THE MARKET IS ALWAYS RIGHT – RIGHT?
Yes, the rising dollar has taken its toll, but more importantly it seems, escalating trade tensions are the real culprit here, and unless the negotiators begin to negotiate, rather than threaten retaliation, we could see some real serious damage done.
John Gross is publisher of The Copper Journal. If you would like to learn more about profitably managing your wire and cable inventory, hedging strategies or gaining additional insight into metals pricing, email John by clicking here or calling him at 631-824-6486.