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Copper proxy Glencore (GLEN) is top of the UK 100 pile this morning thanks to the bottoming out and rebound from $4600/tonne over of the last month, seeing the price of the red metal challenge September’s highs just shy of $4,700 and a bugbear 2-month trend of falling highs. The latest leg up maintains the 2016 trend of rising lows from the January depths of the global commodity rut, helped yesterday by supportive data from China and in spite of additional USD strength that normally serves to hinder.
Oil prices off their lows also tend to help the commodity space in general and other base metals (Aluminium, Nickel, Iron ore, Zinc) are all closing in on major support. Copper as the barometer of choice could thus be providing an early bullish reversal signal. Bulls will now be hopeful that the breakout holds up and that $4800, maybe even $5000 can be revisited. Note GLEN shares also helped by their own technicals, with intersecting support at 175p dating back to April’s lows proving the platform for the latest bounce.
Mike van Dulken, Head of Research, 14 Sept
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