dinsdag 12 maart 2013

Update: Copper Contango Experiment

The latest results indicate that the copper bull market is far from over. Contango keeps steepening (Chart 1) and the large commercials have covered their shorts in copper (Chart 2).

Copper will go higher. (as will the stock market probably)

I hope the record amount in copper stock won't put a damper on my contango theory.
Chart 1: Copper Contango
Chart 2: CFTC Copper

1 opmerking:

  1. Since copper inventory is high, I think the Contango indicates that investors who have bought call options above the cash price expect the price of copper to rise in the future, but may be realising losses in the short term.

    Personally, I think the high levels of copper inventory held in LME and COMEX warehouses indicates that demand from China for industrial materials is weak due to the low growth in European GDP.

    When the European economies return to higher growth levels, that will feed through to China, and the Contango will reverse. The bad news is that the recovery in Europe is not expected to start until Q3 2013.