Recently, I have with Arun Chopra on a new research adventure. We fuse together longer-term fundamental indicators with technical indicators to do historical studies. Today I want to share with you our recent research into the rally in Copper prices.
And, more specifically, what may be driving the biggest move in copper in 20 years.
Here are a few thoughts on what may have occurred to ignite the copper rally (see the chart below for reference):
- As we know, China’s currency, the Yuan, continues to weaken.
- The first two major Yuan devaluations catalyzed upward moves in Gold and Bitcoin.
- However, in the most recent yuan rollover, the lack of reaction in gold coupled with policy signals in China may have put a safe haven bid under copper.
Further complicating this shifting relationship going forward is the potential for China to be labeled a currency manipulator – a policy currently stated in Trump’s first hundred day plan.
Thanks for reading.
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The authors may have positions in mentioned securities by the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
