What's Next For Copper Price?

Copper price has been going down recently, but the decline seems to be slowing. This is because warehouses in China, especially in Shanghai, have a lot of copper stored right now. This is the highest amount since 2020. The reason for the high storage is that demand for copper has been weak, especially in China's construction industry. Because copper price was high earlier this year, manufacturers haven't been buying as much copper. They've been using up the copper they already have instead.

There are some positive signs though. There are reports that Chinese manufacturers are starting to buy copper again, and the amount of copper in storage has been going down slightly. If the global economy keeps growing, copper price could go up again and even reach new highs. However, for a bigger price increase, China would need to take steps to boost its economy.

Copper Technical Analysis

On the daily chart copper price over time shows a recent small increase in price followed by a drop back down to $4.34 per unit. This $4.34 price point is significant for two reasons.

• First, it's a level that has acted as support for copper price in the past, meaning it's a price at which buyers tend to step in and buy copper, preventing the price from going any lower.
• Second, this $4.34 price point coincides with a technical indicator called the 50% Fibonacci retracement level, which some traders use to identify potential buying and selling opportunities.

If the price of copper stays above $4.34, it could be a signal to some traders that the price will rise again, possibly even reaching a new high. On the other hand, if the price falls below $4.34, it could be a signal to some traders that the price will continue to go down, possibly reaching $4.00 per unit.

On the 4 hour chart we can see that price drops haven't been as large recently. This could be a sign that the price might start going up again (a reversal). However, if the price keeps going down, this signal would be invalidated.

If the price does start going up from its current level, buyers might aim for a price around $4.66. This is important for two reasons.

• First, it's a 38.2% Fibonacci retracement level, traders use to identify potential buying and selling opportunities.
• Second, this is where sellers might try to bring the price back down again because it offers a good balance of risk and reward; better risk to reward setup. Traders would aim to push the price below the support level at $4.34.

On the 1-hour chart we can see a slight downward trend. Now buyers are hoping the price will rise above this line to feel more confident and be more likely to increase bullish bets, potentially pushing the price up to $4.66.

Bottom Line on Copper Price

Copper prices have been fluctuating lately. While a slowdown in China's construction industry and high stockpiles have put downward pressure on price, there are signs of a potential rebound.

• Warehouses in China, particularly in Shanghai, are holding high levels of copper, and buying activity from manufacturers seems to be picking up slightly.
• Technical indicators on daily and 4-hour charts suggest a possible reversal, with $4.34 being a key support level. If the price can stay above this level, a rise towards $4.66 is possible.
• However, a break below $4.34 could signal further decline, potentially reaching $4.00 per unit.
  
  

Overall, the future direction of copper price depends on several factors, including global economic growth and policy actions by the Chinese government. You should closely monitor relevant economic data and technical indicators for clues about the next move in copper price.