Copper is currently on the rebound, on the back of its third bearish cycle from February to April. Shanghai Cifco Futures Co. expects prices to climb until the end of June before pulling back to $6,037.50 per tonne by September.
Copper prices are up slightly in London, after inventories dropped to a seven-month low in China, the world’s biggest consumer of industrial metal, while U.S. consumer confidence rose to the highest since 2007. Three-month copper climbed 1.1 percent on Thursday to sit at $7,279 per tonne. Copper was seeing resistance at the $7.240 per tonne, but the day’s climb seems to have broken that barrier. Over in New York, copper futures were behaving much the same. Copper for July was up 0.9 percent at $3.2945 a pound.
Also giving the red metal a pick-me-up was data from Japan showing an expansion of 3.5 percent for its economy, beating analyst’s forecasts of 2.8 percent growth. With its economy expanding, Japan is also expected to boost its copper demand, the Wall Street Journal reported.
The base metal is in a rebound stage after completing its third bearish cycle from February to April, said trading manager Hu Kaixi. The surge may last until the end of June and then decline to $6,037.50 a metric ton, he said. Elliott Wave theory, created in 1930s by American accountant and author Ralph Nelson Elliott, seeks to predict moves in markets by dividing past trends into five sections, or waves.
“From a long-term perspective copper is now in a downtrend, after its spectacular five-wave bull run in the decade between 2001 to 2011,” he said. “In the next wave down, during July to September, it will drop to perhaps as low as $6,037.50, a 16 percent drop — its lowest level in three years — as it completes the final leg of its journey through the Elliott Wave.