Copper (XCU) prices have been consolidating between $6.45 and $6.95 during the past three months. The price has produced a rebound on Friday from the lower boundary of this range at $6.45 and continues to remain strong. But the high cost of energy and recent escalation of tensions in the Middle East keep concerns about inflation alive. This creates uncertainty about US interest rates and keeps prices in tight range. A weak US dollar and strong manufacturing activity in the US may provide some support to copper prices. I think that a break above $6.95 will likely break the price range and strengthen the case for $7.50. This article presents the key drivers, technical levels and relationship of copper with US dollar and silver to understand the next move in copper prices.
Copper Price Forecast: $6.95 Breakout Could Open the Way to $7.50
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Key Points:
- The high cost of energy and the risk of a Fed rate hike could limit the recovery in copper.
- A break above $6.95 could push copper towards $7.50.
- The $6 level remains a key support for copper.