Copper Fundamental Forecast – July 1, 2016

Copper is flat ahead of tomorrow’s Chinese manufacturing data. The US dollar is in the green but making little headway. Copper is trading at 2.183 near the top of its recent trading range.  Copper prices climbed to their highest in more than seven weeks on Tuesday, boosted by growing expectations of monetary stimulus and a weaker dollar, but worries about demand in top consumer China are expected to limit gains. Copper took its cue from equity markets and oil, which have bounced after clocking up large losses in the aftermath of the British vote to leave the European Union.

While copper prices have experienced strength, recently, there is still concern that the commodity’s value will fall in the second-half of the year. This is because demand weakness is expected from top-consumer China as the country’s economy remains on unsteady footing. But metals markets were supported by Chinese stimulus measures, helping offset pressure from a wave of new supply.

China’s infrastructure investment in the first five months of 2016 grew 19.8 percent year-on-year, accelerating slightly from Jan-April and faster than 17.3 percent in 2015, noted Hong Kong based broker Argonaut Securities.

“Overall, we think China’s commitment in infrastructure-related investment should help support overall economic growth and commodity demand,” it said in a report.

FxEmpire provides in-depth analysis for each asset 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 up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.