The copper market continues to be one that I watch closely, as the longer-term outlook for demand is so clearly high.
The lack of production in Chile is also something to pay attention to, but the interest rates are a bit of a hurdle.
The copper market continues to be one of noise, and one that I think a lot of traders continue to waffle on in both directions. This is a situation where I think we eventually get some kind of clarity, but we have a lot of headlines to deal with, mainly because of the Middle East conflict dragging on for what looks like forever.
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Inflation is still a massive problem
That being said, this is a market that also has to deal with the inflationary problems out there. With interest rates rising in America, that does put a bit of downward pressure on precious metals, non-yielding assets, and the like. But the reality is that demand for copper is exploding as AI data centers continue to get built. Of course, the electrification of the global economy remains a massive factor.
With this, and with a lack of overall production, especially in some of the major mines in Chile, this is a market that I'm still very bullish on. We are hanging around the 50-day EMA, and quite frankly, the only reason I don't think we rallied more is that interest rates in America have climbed during the day.
There does seem to be support not only at the 50-day EMA, but also at the $6.50 level. If we can get some type of drop in the 10-year yield, or just yields in general in America, that could provide us a little bit of momentum in copper. This is a market that will continue to favor the upside, and I have no interest in shorting, but I also recognize interest rates—that's your big fight here.
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