Drawing on a reservoir of buoyancy from its May rally, copper has coasted through June with LME cash mostly around 1700 dollars, and 3-months 15-20 dollars higher. Only a mid-month dip and another this week have come as gentle reminders that the environment is by no means as benign as the price might suggest. Yesterday's 25 point rate cut in the US is a measure of some desperation on the part of the authorities. Yet the funds have mostly sat on the profits they made going short in March and long in May. True, there has been some liquidation by CTAs, but no rush for the exit - yet. The Comex commitments of traders figures show quite a strong vote for copper in recent weeks. Longs took only a light cut last week, when their open interest slipped from 31,335 contracts to a little over 30,000. Shorts were also trimmed a shade, but this still left a hefty net long at 18,276 lots. It's difficult not to see this as vulnerable.
展开▼
