Copper Breakout has Profound Implications for Precious Base Metals
Copper has broken strongly higher – a move that has profound implications for precious and base metals: Clive Maund
Over the past couple of days copper has broken strongly higher, and while copper itself may be of little interest to most of us, the implications of this development are profound for the base and Precious Metals sectors. Copper is an important lead indicator, which is why it earned the moniker “Dr Copper,” and since it now looks like it is starting a major bull market, this is a sign that a major bull market is about to begin across the entire metals sector, which as you know is what we are looking for in gold and silver. Silver in particular is gruesomely undervalued and has huge upside potential from here.
On its 8-month chart we can see the impressive breakout move in copper prices of the past couple of days. Everything about this chart is bullish, with the advance being supported by strong volume and positively aligned moving averages.On the 10-year chart we can see that this move in copper marks its breakout from a large Head-and-Shoulders bottom. Volume and volume indicators have been very positive indeed (including On-balance Volume which is not shown) as this pattern has approached and achieved completion. There is a band of significant resistance not far above in the $2.90 – $3.10 zone and the really big upside action can be expected to take place once the price has succeeded in overcoming this resistance. Copper closed at $2.87 on the CME (Chicago Mercantile Exchange) on 26th July 17.
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