Copper Prices Decline

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Copper Prices Decline

Copper Prices Decline On Rising Inventory Levels - Tds

Copper prices have come under renewed selling pressure and have resumed their bearish trend from the last week. According to the TDS securities, the industrial metal is under pressure due to a rise in inventory levels.

Another thing that is going against Copper is the fact that market players are now closing their long positions. It looks like an increase in the inventory levels, along with physical tightness in the market, has put Copper at risk of further declines.

Macro Traders Ditch The Copper

The macro traders, in particular, have pretty heavy positions in the Copper. So if they offload their positions, it would lead to more people selling their Copper contracts.

The fundamental narrative is also not in the favor of the Copper which could cause the rest of the traders to lose their patience as well.

In fact, commodity trading advisors (CTAs) have also joined the bears by selling 8% of their maximum position. In simple words, the big players are leaving the market early, which leaves many things up to interpretation.

For starters, there's a reason why the big players are leaving the market they believe that copper prices will go down. This means that if small traders also join the trend, there will be more downsides to copper prices.

Additionally, aluminum and zinc are also having trouble and are facing serious selling from traders. The aluminum has already crossed the value of $2435 per tonne while the Zinc trades near $2722 per tonne.

While the Copper is going through selling, let's not forget that a similar situation is seen in the Gold and Silver. In the case of these precious metals, the catalyst is the DXY and the Fed comments, which hint at a hawkish policy going forward.

So if we take that into account, it makes sense to think that part of the weakness seen in the Copper is also coming due to the USD strength.

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