Copper Price Forecast – Is Copper Ready To Start A New Bull Market In 2016?
We have covered the copper market extensively in recent weeks. As the price of copper has truly gone balistic this week, it justifies another commentary with our view on where exactly copper stands, and where it can go from here. In other words, is the copper price forecast that bullish that it suggests a new bull market has started in 2016?
MarketWatch is one of the few media outlets that provided some (positive) coverage on copper today. Their article implicitly suggests a bullish copper price forecast for the remainder of 2016: “Copper futures, meanwhile, saw a weekly climb of nearly 11%, which was the largest in over five years, as traders bet that policies expected to be pursued by Republican Donald Trump’s administration could feed demand for industrial metals.” Though fundamental data, as brought forward in their piece, does not carry too much value in our opinion, we agree with their viewpoint.
Copper price heading towards a new bull market in 2016?
In our copper price forecast for 2017 we made the point that $2.10 was the line in the sand. Since then, copper respected that price level. However, we never expected to see such a strong rally in such a short period of time.
At this point, copper is flirting with a new bull market. If, and that’s a big IF, the $2.60 level can be cleared, we are convinced that a new bull market has started, and our copper price forecast will have a very bullish tune for 2017.
The daily chart does not really make that point. As seen on the first chart, copper is simply rallying, and today’s peak does not belong to any relevant pattern.
However, the longer term chart shows a totally different story. It clearly shows the importance of the $2.60 price level. The copper price is now sitting right below that point, and a break above that point will have secular importance, as it would suggest that copper entered a new bull market in 2016. We are not there yet, and a bear market remains a bear market until proven otherwise.
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