Don’t Forget About Copper!

From the Desk of Ian Culley @IanCulley

The media is showering gold and precious metals with attention.

I get it. New all-time highs capture eyes. 

But you can’t leave copper and base metals out of the story…

Copper is ripping to its highest level in almost two years, posting a 15% year-to-date gain:

For perspective, the S&P 500 is up less than 5% since January 1.

Our next profit target of roughly 4.85 is now in focus. A decisive break above this new objective sends copper toward new all-time highs and the psychologically important five-dollar level.  

Perhaps the headlines will show Dr. Copper a little love if it trades at five bucks. (It’s tough being a commodity, even during a bullish supercycle.)

I won’t wait in vain for copper or any other base metal to gain recognition. Nevertheless, tin futures are on a tear – up roughly 90% off the 2022 low:

And… no one cares.

Let’s not forget that human civilization was a snooze fest until the ancients mixed tin with copper, creating bronze.

Without tin, Achilles doesn’t stand a chance against Hector. (Who knows what language we’d speak today if Hector won?) 

Today, tin coats various metals and metal alloys to reduce corrosion. It’s in practically everything. You can think of it as a forever chemical: base metal edition.

Aluminum occupies another blind spot for investors – ubiquitous in our everyday lives, but absent from our portfolios.

Here are aluminum futures retesting the January 2023 high:

To be fair, it’s challenging to find a pure aluminum play through the equity markets. 

I will take responsibility for finding those names and outlining our risk levels as the commodity supercycle unfolds. Stay tuned!

Of course, there’s also zinc:

I take zinc every time I feel a cold coming on.

They tell me it’s in every cell of my body. Unfortunately, that’s my only exposure, while zinc rallied over 24% since mid-February. 

Zinc futures are absorbing overhead supply at a critical polarity zone, so an upside resolution may take time. 

Meanwhile, I’ll focus on natural resource stocks, especially the material sector.

Base metals are resuming their uptrends following gold's breakout to new all-time highs — the only new all-time highs you’ll find on the front page.

The financial media can ignore these trends – but we certainly won’t. 

-Ian

COT Heatmap Highlights

• Commercial hedgers posted another three-year record-long position for the Swiss franc and Japanese yen.
• Commercials increased their net-short position for coffee, reaching a new three-year extreme. 
• Commercial long positioning for KC wheat hit its largest reading in three years. 

Click here to download the All Star Charts COT Heatmap.