Copper Weekly Fundamental Analysis- November 30 – December 4, 2015 – Forecast

Weekly Analysis and Recommendations:

Copper continued to decline this week with no real hope from China, even though news that China was replacing their strategic inventories of metal, the drama on Friday with the Chinese stock market offset any jubilation in the metals markets. Copper ended the week at 2.064.Copper actually ended the week with a small gain.  Copper price rallied 1.9 percent earlier in the week as news kept coming that China was considering measures to support metals market. These include investigation into malicious short-selling on domestic exchanges, and possibly to buy up surplus metals. Copper stabilized above 2.0775 support level following a sharp recovery overnight. The meltdown of Chinese stocks today with 5.4 percent drop in the Shanghai Composite did not manage to deter metal prices.

Prices had surged 4.1% to $2.1345 a pound overnight on reports that the Chinese government may support the domestic metals industry through purchases by the state stockpiling agency. But prices gave up the bulk of those gains throughout Friday trading as some investors judged the news signaled a deeper economic slowdown in China.

“They’re just admitting that the problem is extremely serious and it’s getting worse, not better,” said Ira Epstein, a broker with Linn & Associates in Chicago. Part of copper’s rebound on Friday also was driven by traders who closed out bets on weaker copper prices to lock in gains on the recent pullback, said Frank Cholly Sr., a senior market strategist with RJO Futures in Chicago. “This is a thin, holiday market that gets whipped around a little easier by a few trades,” Mr. Cholly said.

Copper prices have been under pressure for months on fears that slower economic growth in China, the worlds’ top copper buyer, would translate into reduced demand for the industrial metal. China accounts for about 40% of global copper purchases, and much of that metal heads into manufacturing and construction, two sectors where activity has slowed in recent quarters. In response, many investors stepped up bets on lower copper prices in recent weeks on, driving prices of the metal to six-year lows.

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 and we provide daily updates and outlooks.

Major Economic Events for the week:

Upcoming Government Bond Auctions

Date Time Country 

Dec 01 11:30 UK 1.5% 2021 Gilt auction

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

Dec 03 10:30 Spain Auctions

Dec 03 10:50 France Auctions OATs

Dec 03 11:03 Sweden Holds I/L bond auction

Dec 04 11:03 Sweden Holds I/L bond auction