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• DJ Correction to Gold is Great. Copper is Even Better. -- Barrons.com, from 3 hours ago by Dow Jones

  3 hours ago by Dow Jones
  Companies Mentioned: CME
  By Laura Sanicola Copper and gold have been winning bets as both the industrial and precious metal notch big gains this year. Copper faces some technical trading hurdles, though, and it may pay to wait for a pullback before buying. Copper is having a great run. Front-month futures in New York are pricing copper around $5 per pound, up more than 25% since the start of the year. Gold is up around 16% this year and traded over $2,400 per ounce on Friday, up 0.9%, based on spot prices. Several forces are fueling copper's run, including demand trends like utilities that are upgrading grids, usage for electric vehicles, and home-building. Energy demand for data centers running AI apps and servers is also lifting demand for copper. There's also a supply squeeze with the U.S. awaiting shipments of copper from South America and Australia. COMEX copper prices may keep rising until shipments of the metal used in the U.S. power and construction industries arrive from South America and Australia. Technical factors are lifting copper too. Commodity traders who had taken out large short positions are scrambling to buy physical copper on U.S. exchange CME, according to news reports. Traders who had taken those positions had bet against prices rising. Now that those bets have gone wrong, they must deliver the physical commodity. All that has made for a bullish setup, but traders in futures markets don't see demand holding up, at least in the near term. Copper futures that are set to expire next year are trading about 6% lower than front-month futures contract, suggesting that demand is expected to fall. Because copper closely tracks economic activity in China, falling Chinese government bond yields and other bearish economic pressures mean that $4 copper is more likely than $6, according to Bloomberg Intelligence senior commodity strategist Mike McGlone. Long-term demand trends appear intact, but some analysts recommend waiting for a pull-back before buying. Bruce Zaro, managing director at Granite Wealth Management, sees $4.72 as a key level, noting copper had a "double top breakout" at that price when it was already near the top of a trading band, according to a note on Friday. "Wait for a pull back to that break out point before even thinking about chasing here or, optimally, at $4.44, the first support level," he wrote. Zaro notes that the United States Copper Index Fund, an exchange-traded fund, isn't up as much as its underlying metal. It recently traded around $30.75. "Investors would be wise to wait for a pullback to at least the $26.50 range or better yet, the bottom of its trading range, $23.50," he writes. "That said, looking to do some nibbling on such a pullback could make sense." Write to laura.sanicola@barrons.com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. Corrections & Amplifications Copper is trading around $5 per pound. A previous version of this article incorrectly stated the price per metric ton. (END) Dow Jones Newswires May 17, 2024 11:34 ET (15:34 GMT)

• DJ Gold is Great. Copper is Even Better. -- Barrons.com, from 3 hours ago by Dow Jones

  3 hours ago by Dow Jones
  Companies Mentioned: CME
  
  By Laura Sanicola
  
  Copper and gold have been winning bets as both the industrial and precious metal notch big gains this year. Copper faces some technical trading hurdles, though, and it may pay to wait for a pullback before buying.
  

• DJ Copper Is Near a Record High. Does the Run-Up Have Legs? -- Barrons.com, from 12 hours ago by Dow Jones

  12 hours ago by Dow Jones
  Companies Mentioned: CME
  By Laura Sanicola Commodities are on a roll as the rally spreads from copper to other industrial metals, agriculture, and energy. It's a positive sign for the global economy as copper is a leading indicator, while energy prices signals strong demand from China and other major importers. The rally may hinge on how much is being fueled by economic trends versus technical factors and trading dynamics. Copper illustrates the forces at play, which some analysts think may be petering out while demand weakens, potentially setting up the metal to pull back. Copper has surged in the last few weeks. The metal recently traded at $4.89 a pound after hitting a record peak above $5 earlier this week. It's up 23% since the start of the year. The dynamic has several underlying drivers, including a supply squeeze with the U.S. awaiting shipments of copper from South America and Australia. Demand appears robust for things like utilities that are upgrading grids, electric vehicles, and home-building. Analysts say COMEX copper prices may keep rising until shipments of the metal used in the U.S. power and construction industries arrive from South America and Australia. But that doesn't fully explain why prices have surged. A short-squeeze may also be at play. Commodity traders who had taken out large short positions are scrambling to buy physical copper on U.S. exchange CME, according to news reports. Traders who had taken those positions had bet against prices rising. Now that those bets have gone wrong, they must deliver the physical commodity. There are also signs that traders in futures markets don't see demand holding up. Copper futures that are set to expire next year are trading about 6% lower than front-month futures contract, suggesting that demand is expected to fall. Because copper closely tracks economic activity in China, falling Chinese government bond yields and other bearish economic pressures mean that $4 copper is more likely than $6, according to Bloomberg Intelligence senior commodity strategist Mike McGlone. There is still a bull case. Stronger economic growth, particularly in key metal consuming economies like China, could lend additional support to copper and other commodities, particularly in the London Market Exchange, where copper hasn't experienced a short squeeze yet. But most of China's first quarter's growth was frontloaded, and newer gauges of key sectors show the economy's bump has since faded. Copper has beaten gold this year in the metals trade this year, but its run may be nearing an end. Write to laura.sanicola@barrons.com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. Corrections & Amplifications This item was corrected at 11:37 a.m. ET to show that copper is trading around $5 per pound. An earlier version misstated the price was per metric ton. (END) Dow Jones Newswires May 17, 2024 03:00 ET (07:00 GMT)