Weekly Outlook on Copper - 17 May 2024

Copper prices have surged to record highs globally, driven by strong long-term trends and tightening supply. The metal has seen a significant rise on Wednesday and hit an all-time high in the market.

So far in 2024, copper has experienced a substantial 19 percent increase. The London Metal Exchange (LME) reports copper trading at a two-year high, while markets in the CME, Shanghai, and India have all recorded unprecedented prices, bolstered by robust gains in April and May.

The recent copper rally has been further fueled by new stimulus measures from China. Despite a recent economic slowdown in the world's largest copper consumer, the Chinese government issued bonds worth 1 trillion yuan last week to stimulate critical sectors. This move is expected to boost demand. Several factors have enhanced the long-term outlook for copper. There is strong demand from electric vehicle manufacturers, data centers, the renewable energy sector, and the defense industry. These sectors are expected to drive significant growth in copper consumption, reinforcing the bullish sentiment in the market.

Overall, technical outlook for copper remains bullish, supported by strong price trends, favorable moving averages, high RSI, and robust trading volumes. While the market might experience short-term corrections, the overall trend points to higher prices, especially with ongoing demand from key sectors and supportive economic measures. Investors should watch for potential buying opportunities during pullbacks and monitor key support and resistance levels for further guidance. The immediate support for copper is placed around 875 & 860 levels while upside potential resistance could be around 950/970 levels. 

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