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Those who have been reading along the past few months, know the situation in China in regards to copper. As a way to get around the central government’s plans to try to slow down the economy, copper was being used as a form of collateral in lieu of “money”. Apparently it did not take long for the government to sniff this out, and a crackdown began. Not unrelated, copper prices took it to the chin as China is the marginal buyer of everything on this Earth at this moment. Are you looking for ways to profit from the Commodities market moves? Look no further than Chicago Mercantile Exchange contributor and Chief Commodities Analyst Eric McWhinnie’s Premium Newsletter Service>>
Bloomberg is now reporting that stockpiles in China of copper have potentially fallen by some 50%. And Goldman has jumped on the bandwagon reiterating a call for $11,000 per ton copper, up from the current low $9000s.
Now of course the push-pull here is the slowdown in global economic activity, which is obviously a drag on the need for copper. So the next 3-6 months will certainly be interesting to see if global demand or China’s potential import demand are more important in pricing of the red metal.
Shorter term, we can see while equity markets have fallen off sharply of late – copper has actually been bouncing. We can also clearly see it’s been pushed back at resistance twice in the past three weeks. A move over those resistance levels would be a quite positive development.
This is a guest post written by Trader Mark who runs the blog Fund My Mutual Fund.
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