Gavekal Capital: Copper is at a Critical Level Here

Thursday, November 13, 2014

Copper is at a Critical Level Here

We've been highlighting the weakness in the "metal with a PhD in economics" all year so it should come as no surprise that we're keen watchers of copper prices. The reason we pay such close attention to copper prices is that copper in an input in so many construction and manufacturing activities, which then means changes in copper prices offer a clue as to the state of the global economy.

With that being said, copper now finds itself at a fairly critical technical level. Should copper prices fall through support at about $2.98/lbs it would not only mark a 4.5 year low, but would also open the door to much lower prices.

As an aside, we should not be surprised in the weakness of copper prices given the continued slow down in Chinese industrial output, which is by most accounts headed still lower from here.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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