Copper futures soared to their highest levels in more than two years, suggesting broader optimism regarding global economic growth. The industrial metal, also known as Dr. Copper, has typically served as a gauge of future expectations. In today’s climate, the red metal has also gained from persistent inflationary pressures.
June copper futures advanced $0.115, or 2.41%, to $4.881 per pound at 16:40 GMT on Tuesday on the New York Mercantile Exchange. Copper prices had briefly topped $5 in the morning side of the trading session. Year-to-date, copper is up nearly 26%. Over the last 12 months, the industrial metal has rallied nearly 31%.
The last time copper traded this high was in April 2022.
But while copper futures are enjoying their best performance in more than two years, market analysts argue that prices are in overbought territory.
Traders might be taking notice.
The Commodity Futures Trading Commission’s Commitments of Traders report showed that net speculative long positions have dropped in recent sessions.
“Copper prices have entered oversold territory. They are approaching historical highs. If prices remain range-bound without a significant decline, it could be a sign of consolidation before another round of rebound, which bodes well for the global economic outlook,” said a Pave Finance analyst in a note.
Demand strength could weaken in the coming months, experts say. In China, for example, the physical copper market has not been active amid higher prices. Consumption in the second quarter is anticipated to be lower.
Meanwhile, financial markets combed through the latest producer price index (PPI) report. The latest inflation measurement showed wholesale prices rising 0.5%, up from -0.1% in March and higher than the consensus estimate of 0.3%.
Core PPI, which strips the volatile energy and food components, also surged 0.5% monthly in April, up from -0.1% and higher than economists’ expectations of 0.2%.
All eyes will be on tomorrow’s consumer price index (CPI) report, which is expected to be unchanged at 3.5%.
In other metal commodities, June gold futures advanced $14.00, or 0.6%, to $2,357.00 per ounce. June silver futures climbed $0.217, or 0.76%, to $28.66 an ounce. June platinum futures rallied $33.50, or 3.31%, to $1,044.30 per ounce. June palladium futures tacked on $15.70, or 1.63%, to $981.50 an ounce.