Copper price hits 9-year highs amid strong demand for manufactured goods and China’s strong economic rebound after the coronavirus health crisis. The first-month futures contracts in COMEX is trading at $3.9635 having early today as high as $3.9750, a price that we haven’t seen since February 2012. Copper hit $4.65 per pound, the all-time high, back in February 2011.
In London Metal Exchange the three-month copper futures trading today at 8632 per tonne.
Copper price ended in 2020 with over 22% gains, while now Copper is on track for it’s 11th straight monthly gains, while is 8.8% higher since the start of the year. The gains since the March 2020 lows are now up to 98%. Many analysts believe that the rally is just the start of a super-cycle in metals as the demand for the base metals from renewable energy projects is growing.
The main factors that drive the recent rally are the weak U.S. dollar the rising inflation expectations in the USA and below-average stock levels. Excess demand from China and South Korea also boosts the copper price.
Goldman Raised the Copper Price Target
Goldman Sachs has raised the copper target price in the next 12-months to $10.500 per metric ton as the big deficit on copper scarcity expects to rise amid increased demand. Goldman also set the 3-month price target at $9.200 per metric ton and the 9-month target at $9.800.
Goldman expects that copper price will average at $8,625 in 2021, and an average of $9,175 in 2022.
Copper Technical Analysis
The Copper price is 1.60% higher at 3.9630 having hit the daily high which is also an all-time high at 3.9750. The trend is clearly bullish for the industrial metal and higher levels are on the cards. A warning signal for bulls is that the copper price has reached an overbought level as the RSI 14 hovers today above the 78 mark, while on the weekly chart the RSI is at 76.87 just below the all-time high that the RSI reached back in December 2020.
First miner resistance for the copper stands at 3.9895 the high from February 6, 2012. More selling pressure would emerge at 4.0245 the top from September 11, 2011. The most critical point is the top from August 29, 2011, at 4.2055 which if breached might push the price up to all-time highs.
On the other hand, support for copper price would be met at 3.8855 the daily low. A close below might test 3.7940 the low from yesterday trading session. A close below 3.7210 might cancel the recent rally and might push the price towards 3.6240 the 50-day moving average.