Chicago copper futures price, is up 0.05% at $4.4300 per pound on mid-Wednesday trades.
Copper prices gained recently as the Fed took the possibility of a 75-basis points rate hike off the table, and PBOC, the Chinese central bank, pledged to support the economy to counter pandemic woes.
The recent decline in copper prices can be attributed to the poor global economic outlook. Copper is sometimes referred to as “Dr. Copper” due to its ability to predict the global economy’s health. Copper prices rise in tandem with a growing, healthy global economy and fall when the global economy struggles.
The disappointing U.S. GDP Q1 result, paired with harsh lockdowns in China, the global manufacturing hub, led many economists to downgrade the global economic growth outlook. This, in turn, affected the copper prices.
Dubbed “the new oil” by Goldman Sachs analysts, copper’s demand is expected to increase swiftly as the global economy transitions to green energy. However, copper supplies are expected to struggle to keep pace with the rising demand.
On the technical side, the RSI of Chicago copper futures stood at 35.00 and is currently trading above MA (5) but below MA (20) and MA (50). So, SELL position can be taken with the following target and stop-loss:
TRADE SUGGESTION: CHICAGO COPPER FUTURES- SELL: 4.3055, TARGET: 4.2045, AND STOP-LOSS: 4.3815