Miners benefit as copper rallies

Copper is often referred to as the bellwether for the global economy. It’s ability to signal an economic recovery has earned it the name Dr. Copper.

Copper prices broke briefly through $10,000 a decade high, for the second time this week as optimism surrounding the global economic recovery post covid has sent demand expectations through the roof.

Reopening rally

Demand is primarily from the US and China, the world’s two largest economies. China is firmly on the path to the strong growth it was experiencing pre-covid, requiring huge amounts of copper for infrastructure and also wiring homes.

In the US growth is picking up firmly after the pandemic. Optimism surrounding President Biden’s infrastructure programme has boosted metal markets, with copper a clear beneficiary. This near-term upside from stimulus is already working through the market.

Green revolution

However, there is another dimension, here. The longer-term driver of copper - the green aspect. Many green, clean energy alternatives involve the use of copper. Solar panels are just one example. Electric vehicles are another. As the green revolution and electrification of automobiles gather pace copper consumption is rising quickly.

As Biden looks to re-establish the US at the forefront of all things green demand for copper is expected to keep on rising potentially accelerating.

Where next for copper?

The copper price topped a decade high of $10,000 for the second this week and hovers just shy of this level, nearing the all time high of $10,190 in February 2011. The price of copper has more than doubled from covid lows and momentum remains on its side.

Copper futures today struggled at resistance of $4.5725 per pound for a second time this week. Even so the uptrend remains intact whilst the price holds above $4.49 per pound.

Copper miners

In addition to the commodity itself copper miners are also worth keeping an eye on. Antofagasta, Anglo American and Glencore have all surged around 25% so far this year compared to the FTSE’s 9% rise and have rallied around 120% over the past 12 months.

Where next for Anglo American share price?

The Anglo American share price trades above its multi month ascending trendline and its 20 & 50 EMA on the daily chart in a bullish trend. The RSI is supportive of further upsides.

However, the recent rally has run into resistance at 3245p its highest level in a decade. A move above this resistance is required to head towards 3350 the 2011 high and on towards 3550 the 2008 and all-time high.

Failure to take 3245p could see Anglo American continue to consolidate between 3030 and 3245p. It would take a move below 3030p to negate the current near term bullish trend.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.