Copper up and could be set for further gains
Analysts speculate that the red metal could surge in value
HGZ December 19 Copper futures are up in trading, standing at 2.6450, a gain of 0.95 per cent, leading analysts to speculate that the metal could be set for a surge in value.
This year metals traders have been highly sceptical of copper. A metal essential in the manufacture of electrical goods, many argued that the ongoing US-China trade war would reduce its demand. Earlier this year, Washington placed the world’s largest telecommunications equipment maker, Huawei, on an effective blacklist, forbidding American companies from selling or transferring technology with the Chinese firm without a government licence.
Many funds have built up significant short positions on CME copper contracts, betting against any price gains. The cumulative shorts of CME copper in August this year were the largest bearish copper positions on record.
While copper gains have not been spectacular, it currently stands at almost the same level at which it began 2019. Long positions have doubled, while shorts have reduced by a third. Increasingly investors and speculators have begun to consider the red metal’s qualities: including its utility in modern technological society, its declining production, mine disruptions and the currently tiny stockpiles.
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