John posted an excellent chart last Wednesday that showed how some bullish signs were flashing in the Copper market. Sure enough, the metal finally blasted through resistance at $3.20 Thursday and the breakout was confirmed Friday when it climbed again to finish the week at $3.27 a pound ($3.31 on the December contract). Better-than-expected economic data out of China was the catalyst, but also helping Copper at the moment is the fact that economic confidence in the euro zone is improving significantly – and not just because of Germany. The latest reading of the Purchasing Managers’ Index (PMI) for the euro zone exceeded expectations, indicating growth for the first time since January 2012. Recently, Barron’s ran a very informative piece on how a rebound in the euro zone is gaining traction. This weekend, Frank Holmes at www.usfunds.com echoed the same message and stated boldly, “Stay tuned for Europe’s much-anticipated return to the limelight”…
Chinese Copper imports rose 12% year-on-year in July to a 14-month high of 410,680 tonnes. While Chinese end-use consumption has been better than expected, some analysts (Barclays mentioned this Friday) have suggested that a build-up in domestic stock is occurring. This, they predict, will lead to softer prices later in the year. We’ll see. For now, though, there is fresh momentum in the Copper market and prices are at 2-month highs with strong support now at $3.20.
Below is a 2.5-year weekly Copper chart update from John. For 8 weeks prior to last week’s move, Copper traded primarily between $3.00 and $3.20. It attempted a breakout in each of the previous 6 weeks and failed, but the lows kept getting higher. This created a bullish ascending triangle which Copper finally broke out of Thursday. Confirmation came Friday. Based on John’s chart, at the very least we should expect Copper to take a run at the $3.40 resistance. Things could get really interesting if Copper were to climb past that level.
This new momentum in Copper comes at a great time for the Venture, and for the important Copper-Gold porphyry plays that are unfolding – or are about to unfold – in northwest British Columbia (and elsewhere for that matter). In Monday’s Morning Musings (the 2nd version at 9:00 am Pacific), we’ll have a detailed update on the potentially prolific Sheslay River Valley area – Prosper Gold (PGX.H, TSX-V) and Garibaldi Resources (GGI, TSX-V) – which we predict is quickly going to become British Columbia’s next exploration hotspot. Pete Bernier’s timing is perfect yet again, while Garibaldi is uniquely positioned, and perhaps almost ready, to demonstrate The Power Of A Grizzly.
2.5 Year Weekly Copper Chart
