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After gold, silver and copper, will nickel be the next metal to skyrocket?
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Platform]: After gold, silver and copper, will nickel be the next metal to skyrocket?". Hope this helps you! The original content is as follows:
On Wednesday (January 7), the London Metal Exchange (LME) base metals market showed a mixed pattern after experiencing strong gains at the beginning of the new year. Among them, copper futures prices fell from historical highs, while nickel futures continued their gains, hitting multi-month highs. Markets are reassessing recent sharp gains to gauge whether the momentum can be sustained.
LME three-month copper was quoted at $13,144 per ton, down 0.7% on the day. Just the day before, the contract had just set a record high of $13,387.50 per ton. The 240-minute chart shows that copper prices are currently around $13,122, down about 1% during the day. Its technical indicators show that the upper track of the Bollinger Band (20,2) is at 13524.42, and the middle track is at 12884.22. The price has fallen back from the area close to the upper track; the DIFF line in the MACD indicator is 219.50, and the DEA line is 222.35, showing signs of high bonding. This shows that after continuous rapid rises, the market's short-term momentum has weakened and a technical adjustment is underway. A well-known institutional analyst pointed out that base metal prices weakened in early trading, and the bullish momentum that had driven the sector upward since late December last year was taking a pause. The current market remains heavily driven by positioning and momentum trading, while supply chain risks and U.S. macro policy uncertainty persist. Some analysts pointed out that there is a "fear of missing out" sentiment in the market, and even a "mania" for copper, and believed that this state was unsustainable. Despite this, some institutions have raised their first-quarter copper price target to US$14,000 based on strong market momentum, but at the same time maintained the full-year average price forecast unchanged.
In contrast to the correction in copper prices, LME nickel prices continued to rise.It hit $18,790 per ton, a 19-month high since June 5, 2024. Three-month nickel was last quoted at $18,565, up 0.3% on the day, and the cumulative increase since mid-December last year has been close to 30%. Looking at the 240-minute chart, the price of nickel was quoted at $18,750, an intraday increase of 1.22%. Its Bollinger Band upper limit is located at 18988.51, and the current price is close to this resistance area; the DIFF value in the MACD indicator is 639.42, and the DEA value is 523.96, showing that the upward momentum is still strong. The main factor driving the rise in nickel prices is the market's concerns about major producer Indonesia's plan to restrict production, which has injected a significant supply risk premium into nickel prices. However, fundamental data present a www.xmtraders.complex picture: on the one hand, nickel inventories in LME registered warehouses surged to 275,600 tons, the highest since June 2018, and the discount of the spot contract to the three-month contract expanded to US$175 per ton, indicating that physical supply is not tight in the near future; on the other hand, exchange data shows that a single entity holds 30% to 40% of LME nickel warehouse receipts, which may exacerbate tensions in the short-term market structure.
Taken together, although the copper and nickel markets are diverging in the short term, they are both at a critical node in the game between technology and fundamentals. For copper, after hitting new all-time highs, the market needs to digest early gains and confirm new support. In terms of support and resistance ranges, the key support for LME three-month copper is around the middle track of the Bollinger Bands at $12,884. If the adjustment is in-depth, the possibility of testing the $12,250-12,500 range cannot be ruled out; the initial resistance above is at the previous high of $13,387, and stronger resistance is at the $13,500-13,600 area. During the day, you need to pay attention to the position changes of the price near the historical high and whether the momentum indicators (such as MACD) will form a dead cross. Nickel prices are in a strong upward channel, but are approaching important technical resistance. The near-term key resistance for LME three-month nickel is located at the integer mark of $19,000 and the upper track of the Bollinger Band at $18,989; the initial support below focuses on the $18,300-18,500 area, and the more important support is around $17,450, the middle track of the Bollinger Band. During the session, we need to pay close attention to the performance of prices near key resistances, and whether the substantial increase in inventory and deep discounts on spot prices will substantially suppress the upward momentum.
Looking forward to the market outlook, the focus of the copper market is whether macroeconomic sentiment, capital trends and physical demand can match the current extremely high prices, and it may enter a stage of high volatility in the short term. The rising logic of the nickel market relies more purely on supply-side stories, but the high inventory and weak spot structure it faces are potential risks. The sustainability of prices will depend on the specific implementation of Indonesian policies and the pace of inventory changes. Overall, the market is returning to rational scrutiny after the frenzy at the beginning of the year, and volatility may intensify.
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Due to the author's limited ability and time constraints, some contents in the article still need to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues:
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