Copper is often viewed as a decent indicator of economic conditions. Over the past 5 years, ole Doc Copper has made a series of lower highs and lower lows. Is copper telling us something important?
Below looks at copper futures over the past 25-years plus.
Copper has struggled since it hit all-time highs back in 2011. The decline over the past 5 years has copper testing 15-year rising support at (1). Copper has spent almost a year testing support at (1). So far it has held, as selling pressure has somewhat dried up. On the flip side, buyers so far do not seem interested in owning copper on the long side.
Copper finds itself just below falling resistance at (2). The metal is in a tight jam between 15-year support and 3-year falling resistance. If it is still reflective of global macro conditions, it is important that the support continues to hold and resistance would give way.
Bonds have fallen in price of late and yields have risen, causing many to wonder is the low in rates in the books? What Doc Copper does with support and resistance at (2) looks to be important for the macro picture and potentially where interest rates head in the near future.