2024-05-29 12:05:24 ET
Summary
- The copper rally started with a Chinese smelters’ cut agreement, followed by a positive feedback loop of bullish commentary that spurred the market.
- Physical market fundamentals indicate a well-balanced market for the next two years, while financial activity suggests a looming shortage.
- The next probable move is a price correction and a consolidation trading range, as excesses will be cleaned up in the next two months.
It is important to distinguish the economic from the financial nature to understand the current developments in the copper market. Currently, the disconnection is vast, with fundamental factors pointing to a fairly well-balanced market, while financial behavior erroneously implies a looming supply shortage.
Smelters' cut agreement: The hope
Before talking about the recent short-squeeze in the COMEX market, it is relevant to recall how this parabolic rally started because sometimes we lose the perspective of the chain of events and forget how we get to where we are: ...
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For further details see:
The Copper Parabolic Rally On The Verge Of A Consolidation Range