Copper price continued its March towards multi-year highs this Friday as it surged 1.54% on the back of strong PMI data and renewed concerns that the socialist frontrunner in Peru’s June election runoff could nationalize the mining industry.
Populist candidate in Peru’s election Pedro Castillo has promised to make sweeping changes to the constitution, which would pose risks to mining supplies from the world’s second-largest copper producer.
Also boosting copper price on the day was the slew of positive manufacturing PMI data, which all point towards global economic recovery. Manufacturing PMI data from the US, UK and Germany were all positive, showing month-on-month growth.
Copper prices have been riding a strong wave of recovering demand from China and with the largest jump in GDP on record, China’s economy seems poised to consume as much copper as it can to feed its hungry industries.
Technical Levels to Watch
Copper price continues on its breakout move from the symmetrical triangle/bull flag pattern on the daily chart. All that remains for the price to have a free ride to the Feb 2021 tops at 4.3995 is for the price to take out the 25 February top at 4.3755. If the price advance continues beyond 4.3995, the next target is the 10-year highs at 4.5260 (August 2011 high) and 4.5465 (February 2011 high).
On the other hand, a rejection at 4.3995 completes the measured move from the pattern and allows for a correction towards 4.2755, with 4.2015 and 3.9970 serving as additional downside targets.