Copper 3 Year Highs Near As Record Speculative Longs For Third Week

Copper prices continued higher Monday to its highest close since November 2014. Industrial metals have been on a tear with Zinc hitting a 10 year high last week. The Chinese demand and supply equation continues to buoy base metals.

Copper TubingCopper prices continued higher Monday to its highest close since November 2014. Industrial metals have been on a tear with Zinc hitting a 10 year high last week. The Chinese demand and supply equation continues to buoy base metals.

Copper for September delivery closed up 1.4% at $2.9805 a pound on Comex after a near three year high of $3.0025 earlier in the session. Copper is up over 15% since the end of May,  the weaker U.S. dollar is also boosted prices for transaction factors. Over the past few weeks we have seen aggressive buying and new highs in the metals, in particular base metals Zinc, Lead and Nickel. 

The WSJ Dollar Index, which has a broader base the the $USDX, tracks the U.S dollar against 16 other currencies, was down 0.4% Monday.  

Investors and traders have been lured into Copper as China tightens supply and demand increases from government plans such as China’s Xiongan New Economic Zone. The International Copper Study Group reported a seasonally adjusted supply surplus for May on Friday,  it is future supply that investors are betting on.

China accounts for almost half of the world’s copper consumption has been reporting better than expected economic growth reports this year. While many doubt the authenticity of these reports the fact is the helped push prices up and stop losses across the metals segment. 

COT Reports All Time Spec Longs Highs

What concerns the rational mind is the net bullish positions by hedge funds and other speculative investors have set new all-time highs each of the last three weeks, according to Commodity Futures Trading Commission data going back to 2006. The trade is crowded and bull traders need to be aware of liquidation, the short side mindful of the power trend. Trade with care.

Expect profit taking ahead of the Federal Reserve’s Jackson Hole conference on Friday and further evidence for economic growth and future interest-rate increases. 

Live From The Pit

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