Copper price predictions have dropped to the bearish end of the spectrum after copper prices fell by 3.76% on Friday. This is the most significant single-day drop in copper prices since the 5.24% slide on 5 July 2022.
The trigger for the slump in commodity prices in recent times is attributable to a stronger dollar and the recent lockdowns in China.
Fears of a global recession are now in full force, and these drove traders away from risky industrial metals and into safe-haven assets such as gold and the US Dollar. The US Dollar is already trading at 20-year highs across most of its peers, as shown by the US Dollar index. This is also a consequence of tighter monetary policy by the Federal Reserve, which raised rates by 0.75% on Wednesday in pursuance of its aggressive move to curtail out-of-control inflation.
Also driving copper prices lower on the day were the underwhelming manufacturing PMI data from Germany, showing a significant contraction of business activity around the manufacturing sector in the Eurozone. As of writing, copper price was trading at $3.35 per pound ($7,502 per tonne), slightly off today’s session lows.
Copper Price Prediction
The progressively falling highs have pointed the way for the downside action seen this Friday, with the violation of the 3.3650 support level (6 September 2022 low) in progress. The bears need to force a lower penetration close to confirm the breakdown of this pivot to cut a pathway toward 3.2580 ((13 November 2020 high and 21 July 2022 low). Below this level, 3.1190 (21 September 2020 high/12 November 2020 low) and 3.0340 (4 November 2020 low) are additional harvest points available to the bears if there is further price deterioration.
A failure to achieve the breakdown of 3.2580 provides a way back for the bulls, with 3.5220 (11 July and 22 September 2022 highs) being the barrier to beat to initiate a recovery. The 3.6250 price mark formed by the 8 August/9 September highs could serve as a pitstop toward 3.7345 (23 August high). 3.8340 (28 June high) and 3.9535 (21 June low) are additional harvest points for the bulls if the advance is more remarkable.