Log in Open account
Switzerland
CFDs and forex spot transactions are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor lose money when trading CFDs and/or forex spot with this provider. 0.52% of retail clients trading in leveraged products experience a negative account balance after a stop out occurred.
Show more
CFDs and forex spot transactions are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor lose money when trading CFDs and/or forex spot with this provider. 0.52% of retail clients trading in leveraged products experience a negative account balance after a stop out occurred. You should consider whether you understand how CFDs, forex spot transactions or any of our other products work and whether you can afford to take high risk of losing your money.
Show less
Industrial metals prices weighed down by trade, demand fears Industrial metals prices weighed down by trade, demand fears Industrial metals prices weighed down by trade, demand fears

Copper soars to record high, platinum breaks out

Commodities
Ole Hansen

Head of Commodity Strategy

Key points

  • Saxo's "Year of the metals" theme continues to gather momentum
  • Copper's momentum, and short-covering fueled rally drives it to a fresh record
  • Platinum breaks higher, supported by a tightening supply outlook

Saxo’s “Year of the metals” theme, highlighted in our Q1 outlook continues to gather momentum with our preferred metals: gold, silver, copper, and now also platinum showing strong gains. However, while gold continues to consolidate following the March to April run up in prices, copper has following a brief pause at the beginning of the month been racing higher to record a year-to-date gain of more than 30% and in the process reaching fresh record highs.

Source: Saxo

From a fundamental perspective copper is being supported by expected robust demand in the coming years from among others towards electric vehicles, grid infrastructure and AI data centres at a time where production from existing miners may struggle to meet to expected demand, potentially driving large supply deficits in the coming years. Apart from continued momentum, strengthened by the latest breakout, prices are also being supported by short covering. During a two week period to 7 May, speculators looking for a short-term peak added 12.6k lots (143k tonnes) of shorts in high grade futures, the closing of these now supports the upside extension with the New York copper prices leading the rally.

Platinum meanwhile has broken its year-long range above USD 1015, as investors respond to an improved technical outlook and the prospect of a rising supply deficit this year and the next. In their quarterly outlook, released on Monday, the World Platinum Investment Council (WPIC) wrote “In the first quarter of 2024, the platinum market recorded a deficit of 369 koz, while for the full year a 476 koz deficit is forecast, which follows an 851 koz deficit in 2023”. Platinum has for a while been struggling amid the mentioned rangebound behaviour, resulting in the net position held by money managers gyration around neutral, potentially now adding some additional upward momentum from speculators adding exposure.

As mentioned, the aggressive nature of the latest extension to a record high in copper highlights a market where traders have been caught short, especially in the New York based High Grade futures contract, and while it may drive prices higher in the short term, the risk of prices overshooting current fundamentals also rise. While the Chinese market has received a boost from the prospect for additional government support, the near term fundamentals does not stack up with the current exuberance.

Copper stocks monitored by the Shanghai Futures Exchange have recently surged to 300,000 tonnes, a level last seen four years ago when demand collapsed during Covid. In addition, the premium importers are prepared to pay over LME copper has vanished, again an indication the rally has been driven by exchanges in London and New York, and not China, the world’s top consumer of copper. The slump in the spread of this magnitude has not been seen since the Great Financial Crisis in 2008.

Overall, the direction of copper is up, but following the latest surge to a record high - the timing of which occurred somewhat sooner than expected - a period of consolidation looks increasingly likely. Given how far copper has travelled in a relatively short period of time, the contract can retrace all the way back to USD 4.56 or even USD 4.40 per pound without disturbing the bullish setup.

High Grade futures, first month (New York)

Source: Saxo

Platinum, in a down trend for the past three years, finally broke higher on Tuesday, a move that gained momentum after the spot contract (XPTUSD) broke resistance-now-support at USD 1015 per ounce. The breakout saw the gold-platinum ratio slump to 2.26 from a recent 2.58 high, but still above the one-year average around 2.16. Following a potential consolidation period, the next major level of resistance is not before the 2023 highs around USD 1,130 per ounce.

Spot Platinum, weekly chart

Source: Saxo

Recent commodity articles:

14 May 2024: COT: Crude long slump; grain purchases surge
8 May 2024: Fund selling exacerbates softening crude outlook
8 May 2024: Grains see bumpy start to 2024 crop year
6 May 2024: COT: Commodities correction spurs muted selling response
3 May 2024: Commodity weekly: Grains boost, correction in softs and energy
2 May 2024: Copper's momentum-fueled rally halts amid weakening fundamentals
29 April 2024: COT: Gold bulls stand firm despite recent correction
26 April 2024: Commodity weekly: Sticky inflation and adverse weather focus
23 April 2024: What drives the gold and silver correction ?
22 April 2024: COT: Declining momentum may signal shift toward consolidation
19 April 2024: Commodity weekly focus on copper, gold, crude and diesel
17 April 2024: Copper rally extends to near two year high
16 April 2024: Crude oil's risk premium ebbs and flows
15 April 2024:COT: Hedge funds propel multiple commodities positions beyond one-year highs
12 April 2024: Gold and silver surge at odds with other market developments
10 April 2024: Record breaking gold highlights silver and platinum's potential
8 April 2024:COT: Speculative interest in metals and energy gain momentum
5 April 2024: Commodity market sees broad gains, enjoying best week in nine months 
4 April 2024: What's next as gold reaches USD 2,300
3 April 2024: Q2 Outlook: Is the correction over?
3 April 2024: Cocoa: A 50% farmgate price boost a step in the right direction
2 Apr 2024:COT: Gold and crude longs maintained amid strong underlying support


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article

  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article

  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article

  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article

  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

 The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland
Products & pricing
Platforms
Accounts & service
General
Other
Legal

Losses can exceed deposits on margin products. Please ensure you consult our Risk Warning before you start trading and you understand the risks.

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.