What are the reasons you should buy copper now? Analysts at TD Securities suggest to buy copper in anticipation of a near-term potential short-covering rally as supply risks loom ahead.
24 July, GKFX – After six straight weeks of declines, copper and other metals will be in focus again, as assets that have become a lightning rod for concerns about the growing fallout from a global trade war.
China’s policy response will be key here, as investors wait to see whether it will offer some support to the yuan, which has slumped in lockstep with copper over the past few weeks.
Reasons You Should Buy Copper Now
With the labour negotiation period at Escondida set to end this Wednesday, with no deal in sight, the red metal could be poised to catch a fundamental bid off the trade-war induced bottom.
Even with trade war fears putting demand estimates at risk, a prolonged outage at the world’s largest copper mine would lessen that blow and suggest prices can move higher.
Further, the PBoC is set to stimulate the Chinese economy and the USD remains under pressure amid President Trump’s desire for a weaker currency, which should provide additional support.
We believe the base metal rout may be nearing an end. With plenty of spec firepower on the sidelines and a buildup in shorts, a supply side disruption could be the catalyst needed to induce a bout of short covering and see some longs regain interest.
This article Reasons You Should Buy Copper Now was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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