Copper Prices Under Pressure

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Copper Prices Under Pressure

Copper Prices Under Pressure

According to a commodity strategists, Copper prices are relatively weak ahead of China's third plenum. It seems that the copper traders are waiting for the Chinese government to announce a fresh stimulus that will ultimately drive the demand for copper.

The key event for the copper traders was the third plenum in China, which was basically a meeting of Communist party members. If any announcements are made regarding the stimulus package, there will be a higher demand for copper in the near future.

As for any announcements regarding investment in clean energy, it will be a catalyst for the real estate sector. Once again, this will indirectly drive the Copper prices higher as this metal is used a lot in the property sector.

As we approach the plenum, it seems that the top traders from the Shanghai Futures Exchange have already protected themselves by covering their shorts. Additionally, the CTA trigger is still towards the downside, which will provide a small margin as the trigger is around $9472.

TDS Security analysts also added that the global demand for commodities such as Copper will remain weak. At the same time, they forecasted a buildup of the inventories, which could also mean bad news for the Copper prices.

So, as far as China is concerned, there's a lot that can contribute to easing Copper prices as opposed to higher prices. However, the one thing that can uplift the Copper prices is the stimulus announcement from China.

Meanwhile, the next few days will be very important as we have the US CPI and Powell's testimony. Any weakness in the US Dollar, US bond yields, or announcement of rate cuts will also benefit the Copper prices. But how? It will mean more demand of Copper in the US economy which is also a potential catalyst for the Copper prices.

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