Copper, recognized as a reliable economic indicator for decades, is approaching record heights.
Rumored crypto traders can remember periods when Bitcoin (BTC) and copper showed a strong positive context and can quickly draw bullish conclusions from the recent rally in Red Metal. If that’s not enough, BTC’s best year has been characterized by a rally in the copper gold ratio that begins to rise.
However, the latest copper rally is driven by factors other than positive signals from the global economy, which justifies caution, while seeing it as a bullish indicator of risk assets, including BTC.
According to Ing, Copper’s increase in the year before is 12% to $ 5.10 per year. Pounds on Comex primarily driven by President Donald Trump’s trading bariffs, which pose risks to both the United States and global economies. These aggressive political movements probably led to the Federal Reserve to lower growth forecasts while raising inflation projections this week.
This is because the rally in copper is mainly led by President Donald Trump’s aggressive trade tariffs, which pose a risk to the United States and the global economy.
“Copper is up to about 12% so far this year, which is mostly driven by uncertainty about Trump’s trade policy. Tariffen news will probably continue to dictate price direction in the coming months,” analysts said on Ing in a note to clients on March 18.
The ongoing copper rally’s non-so-so-Bullish character is also explained by loss sideways trading in the Aussie Dollar-US Dollar Exchange rate.
Australia is the world’s 7th largest producer of copper and the 3rd largest exporter of copper. As such, Aud and Copper Prices have historically boasted by a correlation coefficient of over 0.80. But it doesn’t work this time, probably because of the tariff-led increase in copper.
Don’t forget the recent Chinese stimulus
The other factors that drive copper rally, such as the recent Chinese stimulus, may be positive for bitcoin and risk taking in general. China, the World Factory, is the largest importer of raw materials.
Early this week, Beijing announced his most potent plan for decades to increase domestic consumption as it is fighting for external uncertainties made by Trump’s tariffs. The plan noted a direct connection between consumption, affordable childcare and the country’s long -term property crisis.
“The policy package includes efforts to increase household income, spur expenses and support population growth. Fresh data was also released in the first two months of the year showing Chinese consumption, investment and industrial production exceeding estimates,” noted Ing analysts and explained this week’s increase in the copper price.
