By Martin Kay
It is no longer possible to ignore the fact that copper prices are going upwards and with HSBC confirms the tendency by raising its price forecast for 2013, binary traders should pay attention. The bank increased its forecast from $7500 per ton to $8000 as the global demand rose and customer sentiment improved. One reason for why prices are surging is that the main producer of copper failed to reach an expected output, but Chile is not the only player whose actions have a significant impact over copper price.
Goldman Sachs is bullish on copper
The investment bank has lost much of its credibility after the financial crisis erupted, but it still employs some of the brightest minds and its endorsements are taken seriously. With Goldman Sachs suggesting that September copper futures are a good idea, it is worth taking a closer look at their reasons. It is the Chinese market that the US bank counts on to drive the prices upwards by demanding increasingly higher amounts of copper in the upcoming months. China is still the main consumer of metals worldwide and despite the fact that its economy grows at a slower pace, its actions still make a huge impact.
One thing that doesn’t seem to bother Goldman Sachs is the fact that there is a surplus of copper out there, but the investment banks is not unaware of this situation. Their analyst is counting on a mild spike in copper demand and they believe that even such a minor dent would be enough to bring the market to a relative balance. If this will occur, summer is the most likely time of the year for this to happen and that’s why binary options traders are advised to act now and buy options with longest expiry dates.
Large mining companies plan to expand
The future looks bright for copper mining as several big players have announced their intention of expanding their presence in Chile. Over the next decade, Chile hopes to attract in excess of $100 billion and it needs to regulate this fast growing industry. So far there are plenty of loopholes that might be one day exploited by lawyers and any scandal could lead to painful losses. The example of Chevron is still vivid in many traders’ minds as the oil company saw its stock plunge as a result of multiple lawsuits.
Traders who use fundamental analysis for predicting the direction, in which stock prices might go, are fully aware of this ever-looming threat. You can take advantage of Binary options signals to get the extra edge from your Forex or binary account. Right now, it is more important that companies such as Codelco, BHP Billiton and Rio Tinto, to name but a few are interested in investing larger amounts in copper mines. Escondida mine is the first to increase its production capacity and more will follow, which means that many are expecting demand for copper to increase and so will the price of the metal.