Copper Fundamental Analysis – December 1, 2015 – Forecast

Analysis and Recommendations:

Copper added 4 points to trade at 2.061 on hopes of purchases by China and an agreement in China for smelters to reduce output in 2016. A lot of commodity investors have been circling around copper recently, believing the base metal has reached a bottom and is ready to rebound.

That is far from a certainty, and I think at best, over the next month we may see it trade in a tight range, and at worst, it has a good chance of plummeting to $1.50 or below.

In the short term it may get a positive bounce, but I don’t believe it’s sustainable over the next several months, and traders should be wary of getting trounced without much in the way of support to shore up the idea copper has reached a bottom.

The overall thinking is the production cuts by Glencore, coupled with the alleged rebalancing of supply and demand, and has positioned copper to be at or near the bottom.

A lot of the bullishness over copper has been the drop in production by Glencore of 400,000 metric tons, which has presumably brought a supply and demand balance to the market.

It seems far too early to me to draw that conclusion, and as mentioned earlier, commodity supply and demand is hard to analyze accurately.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, December 1, 2015

Government Bond Auctions

Date Time Country

Dec 02 11:30 UK Gbp 3.75bn 1.5% Jan 2021 Gilt

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain 1.15% Jul 2020 Bono

Dec 03 10:50 France

Dec 03 11:03 Sweden Sek 0.7bn 1%

Dec 07 13:00 Norway Details bond auction on 09 Dec

Dec 07 17:30 Italy Announces details of BTP/CCTeu on 11 Dec

Dec 08 11:30 UK 3.5% 2045 Gilt auction

Dec 08 19:00 US Holds 3-year note auction

Dec 09 11:03 Sweden Holds bond auction

Dec 09 11:05 Norway Holds bond auction

Dec 09 11:30 Germany Eur 3bn Dec 2017 Schatz

Dec 09 19:00 US Holds 10-year note auction

Dec 10 19:00 US Holds 30-year bond auction

Dec 11 11:10 Italy Auctions BTPs/CCTeus