Joe Biden has said that he will spend around $2 trillion over four years to improve infrastructure, public transport, create zero emissions and clean energy jobs. The coming Biden Presidency stands to encourage significant green tech spending. Copper is a key commodity in the green tech energy sector due to the amount it is used for conducting and wiring, so, the more green tech is invested in, the more demand there will be for copper.
Copper demand accelerated on Pfizer vaccine hopes
Copper demand has been accelerated by vaccine hopes. The Pfizer/BioNtech vaccine news from November 09 means that global growth is expected to now recover into 2021. According to Citigroup Inc., they warn that copper’s rally of about 15% since the end of October has sent copper’s 14 day RSI index above the 70 level. According to Citigroup, this is a signal that a pullback could be ahead. Take a look at the chart below to see the case in point.
Now, it is worth bearing in mind that just because the RSI is overbought doesn’t mean a pullback is definitely coming. However, it is worth having a look at where medium-term buyers might step back in. Copper is a key commodity for global growth and green technology, so it is reasonable to expect medium-term buyers from value. The marked area on the chart at the top shows some potential places where buyers can define their risk.