One of the market nicknames for copper is ‘Dr Copper’. This is because copper is a great gauge of the overall health of the global economy. Copper is used in new homes and construction as wiring usually involves the need for copper. So, keep an eye on copper to see what investors think of global health. If we see a further slowdown in growth from China then copper prices are vulnerable to more falls.
From a seasonal perspective, over the last 51 years, copper has lost value during September. The average loss has been -0.57% and the biggest fall was in 2011 with a -24.24% drop. The largest gain was in 1987 with a strong 22.43% rise. Will a further slowdown in Chinese growth send copper lower? Or will the seasonals not play out this time?
Major Trade Risks: If the Fed are more dovish on Friday that could weaken the USD and help send copper higher.