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Copper may be prone to further decline – TDS

Our commodity demand gauge continues to weaken amid a precarious global macroeconomic outlook, notes Ryan McKay, Senior Commodities Strategist at TD Securities.

Base metals finally starting to look lower

“The demand side is finally starting to weigh heavily on base metals as the early summer euphoria fades.”

“Inflows into broad commodity ETFs during May had boosted the complex, but a decline in inflows and modest outflows have also begun to weigh on the base metals complex. The AUM of base metals-specific ETFs has also markedly decreased.”

“For Copper, our returns decomposition framework also shows a large drag from idiosyncratic factors such as positioning. This suggests that the Red Metal could still be prone to further downside in the near term as inflated positions are trimmed. “

Source: Fx Street

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