Copper, the metal used to electrify the world’s cars, homes and offices, will likely extend gains from today’s record to $9,095 a metric ton, according to technical analysis from Barclays Capital.
The metal is “only a short step away” from the “psychologically important” $9,000 level, according to the bank. Provided the price stays above $8,385, the metal is expected to extend its rally to a trend line resistance of $9,095, as the attached chart shows.
“The near-term trend is up, and we have no desire to fight it,” analyst Phil Roberts wrote in a Nov. 9 report.
Copper has surged this year as the global economy recovered from the worst recession since World War II. The metal for delivery in three months climbed to a record $8,966 a ton today on the London Metal Exchange. It’s up 2.9 percent this week and 21 percent this year.
China, the world’s fastest growing major economy, is on pace to almost triple its annual use of copper to 20 million tons in 25 years, according to CRU, a London-based metals and mining consulting firm. That’s more than the world produces today. Rising demand will create a potential global shortage of 11 million tons a year by 2035, CRU forecasts.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.