SAMT Blog
Pay attention to Dr Copper
22. July 2019, by Mario V. Guffanti
Technical Analysis
Copper is one of the oldest metals known to humans. It has played an important role in ancient civilizations such as the Egyptian and Roman. But the importance of copper increased after the industrial revolution and today it still plays a leading role in the global economy.
Given the wide variety of its applications, it is often suggested that trends in the copper market are a useful indicator of the state of the world economy. And in fact, the metal is sometimes referred to as "Doctor Copper".
In recent years, copper prices may also reflect the influence of China, which consumes almost half of the world's metal supply.
However, several recent studies have questioned the ability of copper to be a macroeconomic leading indicator, as the world has moved into a new much more complex normality to be examined as in the past.
However, this does not deny its importance as an industrial metal. An increase in its consumption and therefore in its price would indicate an increase in industrial activity, especially in the Chinese market.
All raw materials have been in a bearish market for several years now, and this also applies to copper. If we look at a chart from 2008, we can see that the price is below the long-term bearish down trendline (1), but in recent periods ha...
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