Copper is traded in a tight range ahead of the release of US inflation data. Technical indicators hint that the growth of volatility in the red metal is approaching. This is evidenced by converging trend lines and a Moving Average.
In recent weeks, there have been many reports of the resumption of work at the mines or their suspension. All these data create informational noise rather than provide an opportunity for metal trading. Therefore, we won't rely on such news when making trading decisions:
MMG continues to mine copper in Peru at a reduced level. Reuters analysis showed that Peru's key mines were operating at near-normal levels despite protests, unrest, and lockdowns of transport hubs in the country for several months.
Freeport Indonesia, a mining company, has suspended operations at its Grasberg gold and copper mine in Indonesia.
Norilsk Nickel experts say that copper output at mines and refineries will increase by 2%. The demand will also increase by 2%, which will contribute to a moderate shortage of red metal in the amount of 160 thousand tons in 2023.
According to the company, global copper consumption will increase by 2% to 25.4 million tons this year. And the expansion of renewable energy projects and the electrification of transport will support demand.
Apparently, the shortage of copper will be compensated by increased production. In general, the news background can be considered neutral, which means that the report on the US CPI can seriously affect copper.
According to technical analysis, copper begins to be clamped from above by a local downtrend, and from below by a more significant uptrend. From above, additional strength for the level is created by the 200-hour Moving Average, which has been successfully tested twice in the last few days. Quotes are closer to the upper border, so it makes sense to open short positions. The lower limit of the uptrend at $8,734 will be a target of a decrease. A stop-loss can be placed near the breakthrough of a downtrend and the Moving Average, which corresponds to $9040.
Decrease in copper price:
Take profit – 8734
Stop-loss – 9040
This content is for informational purposes only and is not intended to be investing advice.