Copper continues to watch the artificial intelligence world, and the massive amount of demand that will be coming out of that endeavor. Copper will remain “buy on the dips” going forward.
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The copper market has rallied rather significantly during the trading session on Monday, testing the $6.50 level. The $6.50 level is an area that traders have been watching after we had that spike through it at the end of January.
Quite frankly, copper is going to be one of the major markets to watch as there are a lot of concerns about supply for AI and data centers. When you look at the stock market, that is all that anybody is worried about right now is artificial intelligence.
Market Outlook and Support Levels
As a result, this is a market that I think if we do pull back, there will be plenty of traders out there willing to take advantage of cheaper copper and therefore, I think this is a market that cannot be shorted.
The $6.00 level is a significant support level, but I don't know that we even get that far to the downside. The $6.15 level is an area that I think also offers support. We could just turn around and break out to the upside, but with this being the case, I think you have a scenario where as soon as copper offers a little bit of value, traders are willing to jump in and take advantage of it.
Remember, this is a lot to do with artificial intelligence and the overall copper shortage. The situation in the Strait of Hormuz also has an influence, but interest rates are extraordinarily high, so I cannot help but wonder if that ends up being a little bit of a drag in the short term. That probably ends up being a nice buying opportunity.