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The copper market is experiencing a particularly interesting phase, characterised by a combination of a bullish technical trend and speculative positioning that reflects the future vision of market participants.
Using both technical analysis and data from the LME’s COT Report, we can paint a complete picture of how the price of copper might evolve in the coming quarter.
Technical Trend: Ascending Channel and Key Levels
As shown in the chart, copper is moving within a well-defined ascending channel, signalling a structural bullish trend. Currently, the closing price stands at USD 9,614.950/mt, up 1.15% from the previous session, which is in the middle of the channel.
This suggests an ongoing consolidation phase, with the possibility of short-term corrections followed by a possible new rise.
The 50-period moving average (SMA 50) acts as a dynamic support near USD 9,300/mt, while the SMA 200 is well below, indicating a solidity of the medium to long-term bullish trend.
LME Copper – 3 month $/ton daily
Both moving averages are below the current price, reinforcing the bullish strength. However, in the short term, with the price moving away from the top of the channel and below its midline, a slight correction can be expected.
Key Supports and Resistances:
- Supports: 9,300 USD/ton (SMA 50) and 9,000 USD/ton (psychological support and lower limit of the channel).
- Resistance: 10,000 USD/ton (psychological level), with a potential target between 10,400 and 10,500 USD/ton if broken.
COT Report: Speculators’ Positions and Forecasts
The LME’s COT Report on copper offers crucial information to understand how different market players are betting on the metal’s future. The COT data in the chart clearly shows the trend in speculators’ net positions, split between:
- Long positions (buying, light blue line),
- Short positions (selling, orange line),
- Net positions (difference between long and short positions, purple line).
In recent months, we can observe an interesting dynamic. Speculators’ net positions have gone through ups and downs, but recently they are increasing after a period of increased volatility.
This indicates that speculators are increasing their long positions (buying) and reducing their short positions (selling). An increase in long positions is usually a bullish signal, as it reflects rising price expectations.
Accumulation Phase and Bullishness Forecasts
After a phase of declining long positions between late 2022 and mid-2023, there was a new phase of accumulation by speculators. Currently, the level of net positions is positive again, suggesting that many market participants see potential upside in the coming months.
This speculative dynamic supports the idea that, after a possible short-term correction, copper may resume its bullish trend.
LME Copper Cot Report – Powered by Commodity Evolution
Fundamental Factors: Demand, Supply and Geopolitics
Global demand for copper remains high, driven in particular by the energy transition andelectrification sectors. The growing adoption of electric vehicles, renewable energy and smart infrastructure continues to support the metal’s price, making copper one of the most attractive assets among industrial commodities.
On the other hand, possible supply disruptions in key producing regions, such as Chile and Peru, are a major risk to price stability. Possible strikes or social unrest in the mines of these countries could reduce production and increase pressure on prices.
Influence of Monetary Policies and Geopolitics
Global monetary policies, in particular those of the US Federal Reserve, will play a crucial role in determining price behaviour. Any easing of the Fed’s tightening policies could boost copper prices, while further tightening could dampen economic growth and commodity demand.
In addition, geopolitical tensions involving trade routes or copper-producing countries could have a significant impact. The price of copper is notoriously sensitive to supply shocks, and any disruption in supply chains could increase market volatility.
Forecast for the Next Quarter
Combining technical analysis, the COT Report and fundamental factors, we can conclude that the copper price, while susceptible to short-term corrections, continues to move within a structural bullish trend.
Speculators’ net positions suggest that bullish confidence is picking up, reinforcing the likelihood of a new price increase after a possible consolidation phase.
In the coming quarter, copper could fluctuate between USD 9,300/mt (support) and USD 10,400-10,500/mt (resistance and potential target), with a possible attempt to break through the psychological level of USD 10,000/mt. Any geopolitical tensions or supply disruptions could accelerate this move, as could an improvement in the global economic outlook.
Closely monitoring key supports, COT Report dynamics and key macroeconomic developments will be essential in assessing the future behaviour of the copper price.
Key Factors to Follow;
- Supply and Demand: Demand for copper is structurally strong, but possible supply disruptions could exacerbate volatility.
- Monetary Policies: A possible easing of restrictive policies could support a rise in prices.
- Geopolitics: Any tension involving supply chains or copper-producing countries could push prices higher.
In conclusion, despite the possibility of a short-term correction, copper looks set to remain in a bullish environment for the next quarter, with a potential target between USD 9,300 and USD 10,400/mt.