Following the Copper Trends

Today’s a good day for a checkup from “Dr. Copper.” The useful metal has “a Ph.D. in economics,” the kitschy saying goes. If the world starts using less — in their homes, their electronics, etc. — a fall in copper demand should precede a global slowdown. It’s used in damn near everything, after all. So if prices are down, that has to mean something… right?

Copper Price

Yesterday, the copper spot price fell below its 200-day moving average. We don’t like to give the charts much attention, but this is one of those breakdowns of support that gets a lot of people excited. At barely $3 today, it’s also 60 cents off its year-to-date high.

In other words, copper just slipped into a bear market. If his Ph.D. still carries any clout, the world might follow suit.

Perhaps even more telling, commodities in general have taken quite a hit.

CRB Commodity Index

The CRB index, which covers most of the major commodities, is at a seven-month low. With the exception of a few precious metals, May’s been a terrible month for commodities.

Ian Mathias
for The Daily Reckoning