FXTM’s Copper: Hits fresh two-year high!

• FXTM launches 10 new commodities!

• Copper jumps to two-year high

• Prices up almost 20% year-to-date

• Bulls in control on H4/D1 charts

• Key levels of interest at $4.58, $4.54 & $4.50

In case you missed it, FXTM’s new Copper commodity has just hit a fresh two-year high!

Prices punched above $4.65 per pound on Tuesday morning thanks to fundamental forces.

Note: COMEX Copper is priced per pound.

 

Before we cover the fundamentals, here are some fun facts about copper:

• 3rd most widely used metal in the world.

• Used in buildings, electronic products, machinery and transportation.

• Chile has the world’s largest copper mine.

• China is the world’s largest consumer.

• Hit all-time high of $5.01 in March 2022

 

Now here are the basics:

 

What is Copper?

It is a shiny, reddish, and malleable metal widely used in our everyday lives.

This metal has major industrial uses and is an essential nutrient in our daily diet!

What does FXTM’s Copper track?

FXTM’s Copper tracks Copper futures on the New York Mercantile Exchange’s COMEX division.

COMEX is an abbreviation of the Commodity Exchange Inc.

 

The lowdown…

Copper prices have been trending higher in recent months.

The commodity has gained almost 20% since the start of 2024 due to supply-side factors and expectations around booming demand.

• In December, Cobre Panama one of the world’s largest copper mines was forced to stop operations.

• Earlier this month, metal exchanges were prohibited from accepting new Russian production of copper, aluminum, and nickel.

• Zambia, Africa’s second-largest copper producer was hit by power cuts.

The bigger picture

It is not only supply shortages that have boosted copper prices.

The clean energy transition and artificial intelligence projects could fuel upside gains.

Copper remains in hot demand because of its use in electronic devices. But it is also a crucial component in the creation of solar panels, wind turbines and hydro systems.

What does this mean?

Well according to the International Copper Study Group (ICSG), world copper mine production in 2024 has been revised down to 0.5% compared to the 3.7% forecast in October 2023.

In addition, demand is expected to increase by 2% in 2024 and jump to 2.5% in 2025!

To make things clear: a surplus of about 162,000 tonnes of copper is still expected in 2024 but this has been heavily revised down from the 467,000 tonnes forecasted last October.

Even more interestingly, a surplus of 94,000 tonnes is forecasted in 2025 which represents a more than 40% decline from 2024.

So essentially, with production falling and demand rising - this could spell more gains for copper down the road.

Looking at the technicals…

Prices are firmly bullish on the daily charts with bulls in a position of power.

However, a technical throwback could be in play on the H1 charts with prices testing potential support levels.

• Sustained weakness below $4.58 may encourage a decline towards the 100 SMA and $4.50.

• Should prices rebound from the 100 SMA, this could trigger a move back toward $4.58, $4.60 and $4.65.

Copper commodity