Comex Copper refreshes 10-year high on the way to $4.50

• Copper stays mildly bid near the highest since August 2011.
• Supply concerns, US dollar weakness and growth forecasts favor the bulls.
• Pre-Fed caution, light calendar drags the commodity of late.

Copper prices in COMEX remain on the front foot while flashing $4.4540, up 0.40% intraday, as a quote during early Tuesday. The commodity rushed to the fresh high since 2011 before a few minutes while extending the previous day’s run-up beyond the yearly top.

Workers’ unrest in Chile, the largest copper miner, seems to negatively affect the growth metal’s support in recent days. “Mining unions in Chile have threatened to protest if the government does not drop a bid to block Chileans from drawing down more of their pension savings early. Port workers, meanwhile, have called for a general strike,” said Reuters.

Also on the same line could be strong canceled warrants fuelling the fears of further downside in the copper inventories at the London Metal Exchange (LME). Reuters said, “Cancelled warrants, metal earmarked for delivery, at 53% indicate more copper will soon be leaving LME warehouses. This and one large holding of copper warrants and cash contracts  have fuelled worry about supplies on the LME market and created a premium for cash copper over the three-month contract.”

Furthermore, the US dollar’s weakness and hopes that China, the world’s largest copper user, stays strong after the record GDP growth in Q1 2021 also back the commodity’s recent rally.

It should, however, be noted that the pause in the risk-on mood ahead of this week’s key Federal Reserve meeting seems to test the bulls. That said, S&P 500 Futures and US 10-year Treasury yields both seesaws around recently established tops.

Moving on, the red metal is likely to remain strong amid expectations of faster economic recovery from the pandemic. However, US dollar moves and chatters surrounding India’s covid struggles should be watched carefully for fresh impulse.

Technical analysis

Unless declining back below February tops of $4.3755, the commodity is up for challenging August 2011 tops near $4.5400