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According to a recent report from Bloomberg News on July 12, analysts at TradingCentralSA in London are forecasting that London Metal Exchange (LME) copper futures could drop by an additional 13% over the next two months, potentially reaching their lowest level since 2010. This prediction is based on the formation of a "death cross" in the moving averages, a technical indicator often associated with bearish market trends.
Ludwig Garric, head of commodities research at the firm, has warned that LME three-month copper might fall to $6,050 per ton. His analysis has proven accurate in the past, including his earlier prediction of rising soybean prices.
In an email, Garric explained that the 20-day, 50-day, and 100-day moving averages are all declining, with the shorter-term averages now below the longer-term ones—a key sign of a negative trend. He also noted that the price is being pressured by a downward-moving trend line.
Garric further pointed out that the 50-day moving average has been below the 200-day moving average since April 11, and the 100-day moving average has been under the 200-day one since April 30, forming a strong bearish crossover signal.
This year, copper prices have already dropped by 12%, raising concerns about weakening demand, especially given China's role as the world’s largest copper consumer. Analysts are watching closely as economic slowdowns in major markets could further pressure prices.
As of 12:46 Singapore time, LME three-month copper was trading down 0.3% at $6,980 per ton, reflecting ongoing market uncertainty. With technical indicators pointing to continued downside risk, investors are advised to monitor the situation closely.