Market Overview

8 February 2022

Copper Doesn’t Shine Either

Copper prices on the London Metal Exchange (LME) are little changed in February and are within the narrow range of $9700-9835 per tonne. This week prices fell slightly to $9720. Copper demonstrates little volatility even though it is a non-ferrous metal that usually performs high volatility.

However, this reflects a strong counteraction of various factors, not a sluggish market for copper. Copper is used widely in electronics, construction, instrumentation engineering, the chemical and pharmaceutical industry, consumer staples and more. The more the pandemic fades and business activity is restored, the physical demand for copper should also grow. On the LME copper stocks dropped by 8% from the beginning of January 2022. This reflects the rise in demand for copper and indicates its price may go up as well as some other commodities and risky assets.

On the other hand, there are many downside factors: the monetary tightening of the Federal Reserve (Fed) and other central banks, limitations on monetary supply, and interest rate hikes. Such actions make money expensive, limit profit margins in production and investments. This is seen to be curbing commodity prices ahead of the Fed meeting in March where monetary policymakers are set to hike interest rates.

This week the uncertainty of price movements in copper will likely continue as no major economic events are scheduled this week. However, investors may pay attention to the Consumer price index data from the United States on Thursday and the Fed Monetary Policy report on Friday.

Nevertheless, copper prices are likely to remain within the narrow trading range of $9700-9900 per tonne. Prices may even go down to $9600 as central banks tighten their monetary policies. Considering such uncertainties, no strategic positions should be initiated before significant directional drivers emerge.

 

Disclaimer:

Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.

Mark Goichmann
Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location