Historically, when the copper contango is high (red chart tops out), then we have a bottom in the copper price (blue chart bottoms out). Goldman Sachs has traded this trend higher and is closing its long copper trade now. But the rise in copper could extend a bit.
We see the red chart topping out and going in backwardation, which coincides with a lower copper stock at the LME, so we are in the progress of getting higher copper prices.
Additionally, when the commercials go long (purple chart goes up), copper bottoms out in the short term. We did have the bottoming out in copper and are now rallying as commercials become short again.
We should now watch out, when will we reach the peak in copper price?