Copper Weekly Fundamental Analysis, April 25 – April 29, 2016 –Forecast

July Comex High Grade Copper touched a one-month peak last week with the futures contract settling at $2.275, up $0.113 or 5.23%. Prices were being dragged up by a firm trade in aluminum which hit its highest level in over eight months.

Despite the solid gains, most of the rally was fueled by buy stops and speculators chasing the market higher. Professional buyers are still worried about demand although they are a little optimistic about an economic rebound in top metals consumer China. The majority of analysts, however, still feel that underlying supply and demand do not justify the extent of the price gains.

With prices currently being lifted by a wave of speculative investment back by a credit-driven pickup in Chinese demand, it will be interesting to see if the buying frenzy can continue this week given the relatively lofty price levels.

The exaggerated price increases make it difficult to recommend chasing this market higher. This also suggests the moves are being fueled by greater risk-on sentiment and by speculators, making it ripe for a setback or correction in the short-term.

If you’re an aggressive trader willing to chase the market higher then you should be playing for an extended rally through the last main top at $2.3235. This could fuel a rally into $2.4500 over the near-term. If you’re looking for value then the best price zone is $2.1335 to $2.0890.

Right now we are going through a battle between the speculators and the fundamentalists. The specs just want upside action because they have waited a long time for a bona fide rally. The fundamentalists are looking for a more sustainable rally and this is not likely to occur until enough demand can offset the high supply.

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 silver“>weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week:

Monday, April 25, 2016

AUD        ANZAC Day Holiday

NZD        ANZAC Day Holiday

Tuesday, April 26, 2016

Wednesday, April 27, 2016

Thursday, April 28, 2016

Friday, April 29, 2016

  JPY        Showa Day Holiday

Government Bond Auctions

Date Time       Country           Auction

Apr 25 N/A UK 2.5% July 2065 Gilt (Syndicated tap)

Apr 25 11:35 Germany Eur 1.5bn Apr 2017 Bubill

Apr 26 11:10 Italy Holds BTPei auction

Apr 26 19:00 US Holds 2-year note auction

Apr 27 11:03 Sweden Holds bond auction

Apr 27 11:10 Italy Holds CTZ auction

Apr 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Apr 27 19:00 US 2-year FRN, 5-year note auctions

Apr 28 11:10 Italy Holds 5yr/10yr bond auctions

Apr 28 19:00 US Holds 7-year note auction