Copper may rally about 8 percent to $8,765 a metric ton over the next three months after surpassing so-called short-term resistance, according to technical analysis by Barclays Plc.
Prices jumped above $7,970 a ton today, with the next near- term resistance seen at the December peak of $8,162, said Dhiren Sarin, chief technical strategist for Asia Pacific at Barclays. Resistance refers to levels where sell orders may be clustered.
A move above $8,162 would probably lead to an advance to the high from the third quarter of last year at $8,422 over the coming month and then potentially to the high of 2012 at $8,765 on a three-month horizon, he said.
“We are bullish in the near term,” Sarin said. “Sentiment seems to be improving in general.”
Copper climbed to the highest level since Dec. 18 today after the U.S. House of Representatives passed a bill to avert tax gains for most U.S. workers, boosting the demand outlook. A gauge of China’s manufacturing showed a third month of expansion, adding to evidence that the economic recovery in the top consumer of the metal will extend into 2013.
Metal for delivery in three months traded at $8,083 a ton at 3:26 p.m. in Seoul on the London Metal Exchange and advanced 4.4 percent in 2012, rebounding from a 21 percent slump in 2011.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
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