Copper Market News: Distilling Long-Term Patterns

Copper Market News: Decoding Long-Term Patterns

Jan 15, 2024

This chart reinforces and validates our primary perspective: that, from a long-term standpoint, market crashes present buying opportunities. Similar to the Dow utilities, and possibly even more prominently, copper is a leading indicator for both upward and downward movements. The long-term trend depicted in this chart highlights copper’s consistent upward trajectory, suggesting that unless it falls below 1.90, it remains within its long-term trend line. Until such a deviation occurs, the approach remains to “buy the crash and disregard the alarms of thrash.”

Shifting focus to more crucial aspects, a new bull market typically commences when surpassing old highs and concludes when the price doubles from the breakout point. In the case of copper since 2009, breakouts occurred in 2011, 2021, and 2022, yet the price failed to double after each breakout—the breakout point hovers around the 3.80 to 3.90 range. To complete the next bullish cycle, copper must trade at approximately 7.60. A weekly close at or above 3.90 should signal higher prices, and if we see a monthly close at 4.20, it will ignite a significant upward momentum, setting the stage for a test of the 6.50 plus range.

The Unsung Hero of Investment: Copper and its Impending Demand Surge

In the vast and complex world of investments, Copper, the humble yet indispensable metal, is quietly shaping into a compelling long-term investment prospect. Amidst the frenzy surrounding cryptocurrencies and AI stocks, the impending surge in demand for Copper and other commodities like coal and uranium is being overlooked, thus setting the stage for a potential mega-trend.

The reasons for Copper’s rising prominence are simple and profound: demand is projected to outstrip supply significantly, and the time required to open new mines is measured in years, not months. The International Copper Study Group (ICSG) predicts that the global copper market will face a deficit of 510,000 metric tonnes in 2024 alone, starkly contrasting with the surplus of 600,000 tonnes in 2021.

This trend is driven mainly by the rapid growth of industries that heavily rely on Copper, such as electric vehicle manufacturing and renewable energy solutions. The World Bank estimates that the production of electric vehicles will increase more than thirtyfold by 2030, consequently driving up the demand for Copper by 1.9% every year till 2030.

The mass psychology plays a pivotal role here. While the masses are captivated by the allure of Bitcoin and AI stocks, savvy investors understand that this lack of attention towards commodities creates a lucrative investment opportunity. Warren Buffet famously said, “Be fearful when others are greedy and greedy when others are fearful.”

Beyond Copper, the narrative extends to other commodities like coal and uranium. Despite the push for cleaner energy, the International Energy Agency (IEA) predicts global coal consumption will rise by 2.6% in 2022. Meanwhile, uranium, a critical component in nuclear energy, is set to experience a surge in demand as countries like China and India increasingly turn to nuclear power to meet their energy needs.

Conclusion

In conclusion, while Bitcoin and AI stocks continue to dominate headlines, the unfolding narrative in the commodities market, particularly Copper, coal, and uranium, warrants attention. Supply-demand dynamics, lengthy mine development timelines, and overlooked investment opportunities point towards a potential mega-trend. The time is ripe to consider these unsung heroes of the investment world, and Copper, with its impending demand surge, indeed leads the pack.