Metals analyst and EW Contributing Author John Gross penned an interesting post this week analyzing the market’s recent moves in light of the Brexit vote. For additional analysis of copper and other metal markets, contact Gross, the publisher of The Copper Journal by clicking here or calling him at 631-824-6486.
The Market is Always Right – Right ?
Well, maybe not always as the past few weeks painfully demonstrated. More to the point, in the five days leading up to the Brexit vote, copper rose 11¢; silver fell 25¢; gold was down $35; crude climbed almost $4 per barrel, and the S&P rose 36 points.
Thus, these key indicators indicated that Britain would remain within the EU and everybody would be buddy, buddy again. Of course we now know how badly the markets misled us.
When it became apparent the Leave side won, markets expressed their dismay and disappointment in unison. Copper fell 5¢ on that dreadful Friday, June 24th, and every metal on the LME declined. Silver rose 44¢; gold soared $59, crude dropped $2.47, and the S&P fell 76 points.
It was a very Black Friday indeed. But hold on, many markets reversed course again, creating a very curious situation. The dollar fell marginally against the Euro last week, and every other market rose across the board, with most now in positive territory on a year-to-date basis. And a review of the charts individually, or collectively reflects markets approaching, or breaking through overhead resistance.
Of course it’s too early to tell how this is all going to play out, but many markets signaled a turn higher earlier this year, and while prevailing EU uncertainty would suggest weaker prices, the market is looking stronger instead. So, is the market right now with higher prices, or was it right on the day of the vote?
President J.E. Gross Inc., and publisher of The Copper Journal