Copper selling intensifies on China
Copper has been among the commodities hurt badly by the latest news out of China, where concerns about demand have intensified amid the virus spread and corresponding lockdowns there. At last check, the metal was down 3.7% on the session. Copper has taken an additional hit by the general risk off tone across the financial markets. It has been a painful day for Chinese equity investors where the markets sold off over 5% overnight. Westerns markets haven’t been immune with European markets closing sharply lower.
When copper sells off, it is usually a bad sign. It is a key leading indicator of the global economy. Obviously, China being the world’s largest net importer of copper means this particular sell off is undoubtedly because of the latest lockdowns there. Indeed, a weakening yuan means copper imports would suffer anyway, as less of the metal could be bought with the same amount of the Chinese currency. Still, with global inflation soaring, interest rates rising, and now China potentially suffering a big economic shock, don’t take this copper sell-off lightly.
At the time of writing, copper was testing its 200-dya moving average. But there were no signs of the bulls. With key support in the $4.438-$4.500 region breaking, the bears have now got a confirmation that we have possibly seen the high, at least for a while. From here, an eventual drop to $4.00 cannot be ruled. There will be some interim support levels to watch for a potential bounce, for example around $4.348. But so long as that $4.438-$4.500 region holds as resistance, the path of least resistance would be to the downside.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2025