One of the nicknames for Copper is, ‘Dr Copper’. This is because the health of the global economy is often signaled by how copper prices are doing. When the global economy is growing, copper tends to gain in prices. On the other hand, when the global economy is slowing, copper prices tend to fall. Investors are carefully weighing up the Fed’s next move ahead of their next rate meeting. Will the Fed keep hiking rates to contain inflation, but impact growth expectations? Or will the Fed signal a pause in rate hikes and help lift risk sentiment.
This sentiment ebbs and flows with the latest central bank speakers and inflation expectations. However, if there appears to be a reason for positive risk sentiment then take a look at copper’s very strong seasonals.
Between June 22 and June 30 copper prices have gained 18 times and fallen 7 times in the last 25 years. The average gain has been 2.12% and the largest loss was -4.86% in 1997. The largest gain was a stunning 15.23% profit in 1999. Will copper prices rise again?
Major Trade Risks:
- Any very negative sentiment that results in risk-off trading can result in copper prices falling.
- Any specific supply issues for copper can also impact copper prices.
HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.