Copper may fall to support levels in the next few weeks, extending a downward trend that started in February, according to technical analysis by Commerzbank AG.
Copper for delivery in three months on the London Metal Exchange may drop to $6,635 a metric ton, one of two major support levels, said Karen Jones, an analyst at Commerzbank. The next level, at $6,605, represents a 50 percent retracement of a climb from 2008 to 2011, one of the levels singled out in Fibonacci analysis.
“The target of $6,635 is achievable in two to four weeks,” Jones said by e-mail.
A breach of the support levels would put copper on course to touch the 2010 low of $6,037, Commerzbank said in a report dated July 23. The metal may reach that target by the end of the year, Jones said yesterday.
Copper slid 11 percent this year in London on concern demand will weaken as the economy slows in China, the world’s biggest consumer of the metal used in pipes and wiring. Copper for delivery in three months fell 0.5 percent to $7,020.50 a ton by 7:45 a.m. in London.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after a high or low.