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Copper

Metal Commodities Year End ReviewCOMEX: Micro Gold ( COMEX_MINI:MGC1! ), Copper ( COMEX:HG1! ), Aluminum ( COMEX:ALI1! ) 2023 is coming to an end. What are some of the biggest headlines of the year? • China’s ending of Zero-Covid gave hope to global economic recovery and an increase in commodities demand, but it was short-lived; • U.S. regional bank crisis triggered a flight to safety; • U.S. debt ceiling crisis escalated but was resolved at the eleventh hour; • The runaway inflation was contained as the Federal Reserve hiked interest rates eleven times; • House Speaker Kevin McCarthy was ousted in a history making vote; • The Israel-Hamas conflict broke out in October, and geopolitical risk intensified as shipping routes in the Red Sea were under attack by the Houthi militia; • U.S. reins in Cryptos with public trials and huge fines rendered to two large Exchanges; • Fed cut became the new market narrative, which pushes equities to record high. These events have significant impacts on commodities. Today, I will give a high-level review of metal commodities’ performance in 2023, and what lies ahead in 2024. Energy and Agricultural commodities will be covered in my subsequent writings. A Good Year for Precious Metals As of December 27th, Gold futures are up 13.2% year-to-date to $2,091 per troy ounce. The benchmark precious metal reclaims its status as the preferred safe-haven asset. • The collapses of three regional banks in March posted a potential systemic risk in the US banking system. Gold gained 13% within a month as investors bought bullion and dumped dollar-denominated assets. • Gold pulled back by 7% following the resolution of the debt ceiling crisis in early June, and the US government avoided a default of sovereignty debt. • Since the Gaza War broke out, gold gained 9% as the geopolitical crisis escalated. • Gold rises as the Fed cut narrative takes hold and investors are increasingly bullish. On December 3rd, spot gold reached an all-time high of $2,146. 2024 Outlook for Gold: Lowering interest rates is bullish for gold, as the opportunity cost to hold the non-yielding bullion would be lower, comparing to interest bearing instruments. With two ongoing regional wars, geopolitical tension is expected to remain high in the new year. This is also positive for safe-haven assets like gold. The December 19th CFTC Commitments of Traders report (COT) shows that “Managed Money” has 155,697 long positions and 47,421 short positions. The 108K net long positions indicate that speculative traders are very bullish on gold. Trade Ideas: Buying gold in the dip may be a good strategy in 2024. For example, a pullback could happen if the Fed issues a hawkish statement, or monthly inflation rate rebounds, or a cease-fire achieved in either the Middle East or Ukraine. The February contract (MGCG4) of COMEX Micro Gold Futures is quoted at 2091.6 on Wednesday. Each contract has a notional value of 10 troy ounces, or $20,916 at current price. To buy 1 contract, investors are required to deposit $830 in initial margin. Hypothetically, if gold futures bounds back to its all-time high $ 2,146, a long position would gain 54 points and $540 per contract (= 54 x $10). This would represent a theoretical return of 65% (= 540/830) excluding transaction fees. On the other hand, if gold price pulls back, the long position would lose $10 for each $1 of gold price decline per ounce. Copper Under Pressure by Gloomy Economic Outlook As of December 27th, copper futures are up 4.9% year-to-date to $3.98 per pound. The expected change in the balance of supply and demand drives copper price trend. • In November 2022, China ended a 3-year-long Zero-Covid policy. It gave hope to global economic recovery and an increase in commodities demand. Copper rose from $3.60 to $4.20, up 16% within two months. • China’s economic recovery lost steam after just one quarter. Copper prices have been trending down most of the year and touched a 52-week low of $3.55 in October. • Recent data shows the U.S. economy to be resilient, employment market strong and inflation trending down. Adding in the aggressive rate cut expectations, copper rebounded 12% to $3.98. 2024 Outlook for Copper: Below is the projected balance of supply and demand for copper, according to data from International Copper Study Group (ICSG). • 2024: supply 27.8 million tons (mt), demand 27.5mt; excess supply is 300,000 tons. • 2025: supply 28.6mt, demand 28.4mt; excess supply is 170,000 tons. As an industrial commodity, copper supply tends to be relatively stable and easy to forecast. However, its demand could vary substantially as business cycle rotates from boom to bust. The March contract (HGH4) of COMEX Copper Futures is quoted at $3.954 per pound on Wednesday. Each contract has a notional value of 25,000 pounds, or $98,850 at current price. To buy 1 contract, investors are required to deposit $4,500 in initial margin. The recent COT report shows that Managed Money has 60,873 long positions and 45,806 short positions. The net long positions are small, not a good signal on trader intention. While investors expect a soft landing for the US economy, whether the global economy could avoid a recession remains to be seen. Geopolitical tensions add to the uncertainty. I would wait for more data on copper demand before forming a trading strategy. Aluminum Taking a Hit as Demand Weakened As of December 27th, aluminum futures are up 0.4% year-to-date to $2,335 per ton. Like copper, the balance of supply and demand drives aluminum price trend. • China’s ending of Zero-Covid pushed aluminum prices up $400 within a month. • Aluminum prices have since declined and touched a 52-week low of $2,072 in August. • With good economic data and rate cut expectations, aluminum rebounded 13%. 2024 Outlook for Aluminum: The forecasted balance of supply and demand for aluminum by SMM: • 2023: supply 49.9mt, demand 50.0mt, supply shortage is 93,000 tons. • 2024: supply 51.1mt, demand 51.1mt, supply shortage is 50,000 tons. Current forecast estimates that aluminum is near supply and demand balance in 2024. The March contract (ALIH4) of COMEX Aluminum Futures is quoted at $2,375.5 per ton on Wednesday. Each contract has a notional value of 25 tons, or $59,387.5 at current price. To buy 1 contract, investors are required to deposit $2,000 in initial margin. The recent COT report shows that Managed Money has 451 longs and 1,201 shorts. The net short positions indicate that speculative traders are bearish on aluminum. I would wait for more data on aluminum demand before forming a trading strategy. To sum up , I am bullish on gold with an outlook for lower interest rates and heightened geopolitical risks. For copper and aluminum, demand outlook is uncertain depending on whether a global economic recession could be avoided. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
COMEX:GC1!Long
by JimHuangChicago
COPPER: Long term sell signalCopper is bullish on its 1D technical outlook (RSI = 59.350, MACD = 0.033, ADX = 19.471) as it is at the top of the 2023 Channel Down, but having failed to cross over it, opens the way for a big decline in the first quarter of 2024. As you can see the Channel Down that started last January looks very similar to the one in 2012/13. Both emerged after a Global peak and then rejection to an oversold 1W RSI bottom. It is very interesting how similar the ranges are, both Channel Down bearish legs have been around -18.50%. We are turning bearish on the most optimal technical level and aim for another -18.50% decline (TP = 3.2500) or up when the 1W RSI gets oversold (under 30.000). See how our prior idea has worked: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
COMEX:HG1!Short
by InvestingScope
Copper ~ Help Me Obi-China, You're My Only Hope (2H)CAPITALCOM:COPPER chart mapping/analysis. Copper - off its October lows, yet still contending with global macro headwinds & China's difficulty in shaking off its deflationary economic funk.. Trading scenarios into EOY: Prelim trading range = ~3.93 - ~3.73. Under bearish pressure from 38.2% Fib rejections. Bullish reaction to China/macro economic news = bounce off lower range of parallel channel (green) + 200SMA confluence support / break above 38.2% Fib / break above ~3.93 upper trading range. Bullish extension target(s) = 50% Fib / upper range of parallel channel (green) confluence zone. Bearish reaction to China/macro economic news = break below ~3.73 lower trading range / lower range of parallel channel (green) / break underneath 200SMA, becoming dynamic resistance. Bearish extension target(s) = 23.6% Fib / lower range of descending parallel channel (light blue).
CAPITALCOM:COPPER
by BlueHatInvestor
COPPER Correction to accelerate lower.Last time we looked at Copper (HG1!) 1.5 months ago (October 24), we caught the most optimal bottom buy signal: The price action didn't only hit our Target but also broke above both the January 18 2023 Lower Highs trend-line and the 1D MA200 (orange trend-line). The rejection that took place on Monday though, is giving rise to a new Falling Wedge pattern with the current Bearish Leg on full display. The bearish signal is already confirmed as the 1D MACD has completed a Bearish Cross, and so far the sequence is very similar to the August 01 rejection. As a result, we are bearish on Copper, looking to take advantage of today's green 1D candle and short near the closing in anticipation of being close to the peak. Our short term Target is 3.6100, which is the 0.786 Fibonacci retracement, a symmetrical level where the price bounced on August 17. Selling can only be extended if the green Support Zone breaks. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
COMEX:HG1!Short
by TradingShot
Leveraging the AUDUSD Strength Amidst USD WeaknessThere has been an opportunity that has emerged due to the recent fluctuations in currency values and the growing demand for copper exports to China. As you may be aware, the USD has been experiencing a period of weakness, while the AUD has shown signs of strength. This presents an advantageous situation, as we can leverage the stronger Australian dollar against the weaker US dollar. In light of this, I propose that we explore the possibility of exporting copper to China. With the AUDUSD exchange rate in our favor, we can maximize our profits by capitalizing on China's increasing demand for copper. China, being one of the largest consumers of copper worldwide, offers a lucrative market for our manufacturing. By exporting copper to China, there is a growing demand and take advantage of the current exchange rate of AUDUSD.
Long
by bryandowningqln
Copper-Elliot wave counts and market structureI have earlier posted a daily chart on Copper sharing my views on this commodity and stating that it is now in wave 3 structure and will be slowly advancing towards 4.67$ mark going into 2024. By referring to that chart you can get a better understanding of this chart since that talks about a bigger picture about what to expect from this commodity. Coming to this chart, the metal made a leading diagonal(Elliot wave theory) between 17th Oct and 6th Nov. That is marked as wave (i). After an impulse gets completed it is always followed by a corrective wave which can retrace even upto 90%(but never 100 if the prior wave was impulsive).In this case the wave (ii) retraced 50% of wave(i) from 6Nov. till 13Nov. A new impulse was again set in place on 13th of Nov. The Elliot wave theory is a very accurate and the most logical way of looking at the market structure and getting an understanding of how the price moves. Once you start to look at the market from the Elliot wave perspective you will start believing that whatever happens in the market is never random. The market always has a structure and logic, which many a times we as individuals may not spot(immediately) and that only means we need to up our game to try and understand this beautiful market place. The purpose of this chart was not only to talk about copper and where it might be headed, but was also to give an insight to all about how i approach the charts and what are the points that i look for. Note*- This chart is for educational purpose only
CAPITALCOM:COPPERLong
by neeraj_2_sharma
Gold: Shining Bright with OpportunitiesGold is once again in the spotlight, and here’s why! Economic Cycles, PMI & Gold The US Purchasing Managers Index (PMI) is a leading indicator often used to identify turns in the economic cycle. A below 50 PMI print indicates contraction in the US manufacturing cycle, while a print above 50 suggests expansion. Generally speaking, expanding manufacturing cycles spell a boost for industrial materials, like copper, while contractionary periods spell downturns in the economy and a preference for 'flight to safety', boosting gold holdings. An interesting observation from the chart above is the correlation between the Gold/Copper ratio and the inverted US PMI, moving in tandem over the last decade. However, looking at the current scenario, the PMI has turned lower, yet the Gold/Copper ratio has remained relatively muted, suggesting that gold may currently be underpriced. Similarly, the Gold/Silver ratio shows a less pronounced but similar effect. Significant drops in the PMI below the 50 level have historically triggered notable increases in the Gold/Copper ratio. With the PMI currently below 50 for a sustained period, this might be priming the ratio for a potential upward surge. Yields, Fed Expectation & Gold As a non-interest-bearing asset, gold loses its appeal when interest rates rise, leading investors to prefer interest-yielding products. We covered the effect of a Fed rate cut on gold in a previous article here . While the Fed remains steadfast in holding rates, even the act of pausing rate hikes positively impacts gold. This effect is observed via the Gold/US10Y Yields ratio. The previous pause in rate hikes preceded a significant run-up in this ratio. Additionally, this ratio is currently near its resistance level, which it has respected multiple times over the last decade. With the Fed expected to continue holding rates, now could be an opportune time to consider adding gold to your portfolio. Gold Price Action Gold’s current price action also shows a completed cup-and-handle pattern. With an initial attempt to break higher halted, it now trades right above the handle. Additionally, gold could arguably be trading in an ascending triangle pattern, as noted by its price action as well as generally declining volume, potentially signaling a bullish continuation pattern. In summary, given the Fed's stance on holding rates, the correlation between PMI and the Gold/Copper ratio, and the bullish technical indicators in gold's price action, a positive outlook on gold seems reasonable. To express our view, we can buy the CME Gold Futures at the current level of 1962. Using the cup and handle pattern to guide the take profit level, at 2400 and stop at 1890. Each 0.10 point move in gold futures is for 10 USD. The same view can also be expressed with greater precision using the CME Micro Gold contract where the notional is one-tenth of the regular size gold contract. Here, each 0.10 point move is for 1 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com www.cmegroup.com
COMEX:GC1!Long
by inspirante
9
🧽 Mister Poper. Meet The Cleaner Of Your DreamsCopper price continued to provide negative trades affected by the frequent stability below the additional barrier at 3.7280, to manage to reach some negative stations by touching 3.6100. Also, RSI stochastic continues to provide the negative momentum to allow us to suggest forming new negative waves to attack the additional support near 3.5000 followed by monitoring its behavior to manage to confirm the upcoming trend. The expected trend: Bearish
COMEX:HG1!Short
by PandorraResearch
COPPER Channel Down bottom buy opportunityCopper (HG1!) is trading within a Channel Down pattern since the June 29 low and since 5 days, it entered the 11 month Support Zone. The 1D MACD just formed a Bullish Cross, which has been a buy signal the previous 2 times within the Channel Down. Every bearish sequence in 2023 has seen a rebound that hit at least the 0.618 Fibonacci retracement level. This is good enough for us to buy and target 3.7600 (0.618 Fib). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
COMEX:HG1!Long
by TradingShot