Industrial metals had been gaining for many months. However, now we are starting to see some falls. The reason for the falls is because of the increase in COVID-19 cases in the Northern Hemisphere. Cases are starting to show signs of an increasing momentum For example, Spain and France now have more than 10,000 cases per day as a 7 day rolling average. This is nearly 2000 cases a day greater than in the first wave around March and April. See chart here from the Guardian:

Copper, Zinc, and Aluminium have been some of the worst performing commodities during very recent trading and probably only demand picking up from China will halt the declines.

Bloomberg’s Industrial Metals Subindex has been rising for five months. It climbed 22% from June to August. The rise in the metals markets was due to the re-opening of economies over that period. So, copper rose 25% between June and August and Zinc jumped 24%.

However, as the pandemic is gripping again in the Northern hemisphere the Bloomberg Industrial Metals subindex is now down 3.6% and has taken out a key trend line. See chart below:

The index is now heading for its first loss since March. Unless China can try and keep the demand levels alive and prevent further falls Copper futures looks very vulnerable to selling into daily support. Dr Copper is always a good bell weather on the state of the global economy. If more restrictions and lockdowns grow then Dr Copper should indicate the worsening global outlook.