LONDON, April 15 (Reuters) – Funds have this year played copper from the short side and from the long side but with little success either way. They are now broadly neutral as they and everyone else try to work out where Doctor Copper is heading next.
In part this is a reflection of copper’s lack of directional impetus in recent weeks. The London Metal Exchange (LME) contract has since late February been treading water in a $6,300-6,550 range with an absence of clear chart signals. On Monday, it was trading around $6,470 per tonne.
That has muted activity from the black-box funds that feed off momentum and other technical indicators. But copper’s well-trod trading range is itself a sign of how confused the broader market is right now with no clear consensus on the short-term outlook.
Fund managers held a net long position of 888 contracts on the CME copper contract as of last week, according to the latest Commitments of Traders Report (COTR).
They started the year in a bearish mood with money manager short positions flexing out to 88,003 contracts in early January. Negativity to copper was down to the intertwined themes of a Chinese slowdown and a potential trade war between China and the United States.