Copper Bull Bull Bull

[TWI]

I have built a long in copper over the past few months. I believe it will exceed $5/lb in the coming year. The fundamentals of global electrification which requires huge quantities of copper combined with the long term ESG driven reluctance to fund new mining operations for its extraction lead to an increasingly under supplied market . The only thing holding the price down has been the apparent sluggishness of the Chinese economy which was not expected and the perception that the west may be heading for a hard landing. Both of these will remain flags to the upside price for now but on balance they do appear to be resolving to the positive side and we have seen Chinese demand pick up recently. Interested to hear if anybody out there is bearish. Today was a good day for bulls but I am far far more of a pig in this one.

 

[timsk]

Hi TWI,
The precious metals community focus - wait for it - on precious metals, mainly silver and gold. However, lately, some of them are starting to 'stack' copper in the belief that its future is rosy and that one day it may even be classed as a precious metal. IMO, it's well worth tracking the relationship between silver and copper, as many think (me included) that the former is seriously undervalued, due in part to market manipulation. As you probably know, the silver market was cornered by the Hunt Brothers in the late 70s in a move known as Silver Thursday, which lead to the all time high in price. If it breaks out of its long term range, many believe it'll go 'to da moon'. If that happens, copper could follow in its slipstream - a rising tide floats all boats etc. Keep in mind though that copper is just as prone to market manipulation as silver is, see this link about Mr. Copper.

Your chart looks good and your analysis strikes me as being sound - good luck with the trade! Below is my range bar chart which suggests price is nearing a resistance level - so expect a short term pullback. Thereafter, like you, I'm bullish.
Tim.

 

[TWI]

Think you nailed the pull back. Taken all yesterdays gains back already. I have this as a long term position and will be accumulating more on dips. I note CaterpillarInc CEO today was not talking bullish on Chinese construction projects...does not help.

 

[TWI]

I'm pleased to share that, as is often the case in fundamental based trades in commodity markets, patience has paid off. I firmly believe we are at the beginning of a prolonged bull market in copper. Will continue to increase on dips.

 

[timsk]

Nice one TWI!

Will you continue to add as long as price continues to climb - and how will you determine when it's time to close the trade(s)?

 

[TWI]

Thanks timsk, I have been adding to longs on sell-offs via conviction in the global supply/demand, it was not easy to maintiain this vieww Aug 23-Feb 24 but nothing I read about the market suggested otherwise and the only flag was global recession which fortunately did not transpire. With my current view of increased global debt liquidity and acceleration of green intiatives there is no reason to think this has a lid anywhere near current prices. The front month in comex however is in a clear technical squeeze and so the front spreads have become very backwardated vs. what would normally be a carry structure as it was only a few weeks ago. So, I shift buying down the curve and try to roll the fronts at the optimum time. I will close the trade when I see a significant change in the supply/demand or economic contraction approaching or the chart screams get the hell out. Until then I continue to ride it hard. I have been running a similar programme in Platinum which has been at an historically too large discount to gold and has significant geopolitical risk factors.