The Copper Age is back. The crisis of coronavirus It is being an earthquake for the markets that, against all odds and amid a barrage of worrying macro data, may pave the rally for the red metal. And the last call to get on that train is already here.
Experts say it Eurasia Group. The firm believes that, from now on, governments will double their investment, which, in turn, will boost demand for copper worldwide.
This reddish metal is historically considered a thermometer of the world economy and It has been one of the values hit hardest by the pandemic. Until now.
"The colossal stimulus programs for a green and digital transition, especially in Asia and Europe, will create the conditions for a boom in demand for copper: electric cars, 5G networks, renewable energy … they all require a lot of this material. "Eurasia says in its latest report.
Copper demand may drop as much as 5% in 2020 from the pandemic. However, it is expected to rebound 4% in 2021, regaining almost its pre-crisis levels in record time thanks to those government programs, among which that of the Government of Pedro Sánchez is included.
Bank of America also sees copper with renewed optimism. The US investment bank expects its prices to rebound an additional 5.4% this same 2020, to $ 5,621. For 2021, they keep intact their forecasts at $ 6,250. Their hope is also justified by the "remarkable fiscal stimulus packages" we are seeing and the expectation that more countries will resume their purchases of raw materials as the pandemic passes.
In Morgan Stanley They also project a quick and sharp recovery of the reddish material. Its analysts anticipate that it will regain its pre-pandemic levels soon, thanks to global stimulus and China's recently announced spending on infrastructure.
THE THREE EUROS, "AN IMPORTANT AREA OF CONTROL"
The analyst of ForexNews.online, J.M. Rodriguez, highlights that "the interesting thing about copper is that since its March lows, at $ 1,9695 (which coincided with those of the stock exchanges themselves) it has rebounded 36%". Everything is arranged so that, in theory, "it returns to the origin of the movement in the annual maximums (2.88 dollars)".
Rodríguez also underlines the relevance of the three-euro zone for copper: "It was support at the end of 2017, it was support in 2018 and it has been resistance in 2019, so we are facing an important control zone." Regarding its resemblance to stock markets, the analyst acknowledges that "Their chart is very similar to that of indices like the S&P and the Dax."
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