Tuesday, March 29, 2011

Is the Sustained Strength in Copper Sustainable?

Copper is back in the news again as prices continue to show strength.The attached Weekly Chart of Copper clearly illustrates the strength, particularly relative to the 2006-08 period.  At a time when GDP of the Globe peaked, copper prices had been bouncing off of resistance at the $4.00 level.  In early 2011, the price also observed this resistance and then broke decisively through and has continued higher.  The Business Insider posted an interesting perspective on what China does with all that copper.  And why we should continue to believe that the Chinese economy will continue to drive such continued demand.  This would suggest that the production-consumption of copper will continue at a level higher than the peak of 2008.  The economic activity in China and potential for continued growth remains.  Watching and Learning.

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