Will copper price extend gains amid short-term overbought signals?

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Copper jumps 1.23% today to $6.47

Highlights

Copper inventories at the London Metal Exchange have surged, raising visible supply and putting downward pressure on prices.
Reduced appetite for AI-related and technology stocks has led to lower demand for copper as capital shifts away from cyclical assets.
Copper trades with bullish medium- and long-term signals, projected to fluctuate between $6.4174 and $6.5362 over the next 2 to 3 days with overbought conditions suggesting possible short-term consolidation.

Inventory build and tech selloff drive supply glut and sentiment shift

A recent surge in inventories at the London Metal Exchange has increased visible supply for copper, reducing scarcity and creating downward pressure on prices, according to Bloomberg. The broader selloff in AI-related and technology stocks has further weakened risk appetite among investors, indirectly dampening demand for copper as capital reallocates away from cyclical assets. These developments have contributed to a soft patch for copper in recent weeks, but the current price action signals a recovery attempt as sentiment shifts.

Bullish momentum persists as support holds but overbought signals flash

On the technical front, HG is currently trading above its MA-20 yet just below the MA-50 on the hourly chart, while remaining firmly above the MA-200 on the daily timeframe. Immediate support is defined by the Ichimoku Kijun at $6.4283. ADX and RSI both generate 'Buy' signals, while the MACD turns in a neutral reading. Both Stochastic RSI and CCI are in overbought territory, with Bull/Bear Power indicating buyer dominance and the Awesome Oscillator reinforcing the bullish bias. This combination highlights robust momentum tempered by stretched short-term conditions.

Consolidation likely as overbought risk tempers upside breakout potential

Over the next 2-3 sessions, HG is expected to trade within a band of $6.4174 to $6.5362, representing typical volatility around present levels. Projections currently assign a 62% probability to continued gains and a 38% chance of reversal. The base case calls for consolidation within the current range, while a breakout above $6.5362 would set the stage for additional upside. Conversely, a move below $6.4174—potentially triggered by overbought conditions leading to profit-taking—could lead to short-term weakness.

Viktoras Karapetjanc, senior analyst at Traders Union, sees copper attempting to recover as risk sentiment slowly turns positive. He notes that the recent pressure from LME inventory surges and tech-driven selloffs has eased for now. Technical momentum remains strong, though short-term signals are stretched. Karapetjanc believes consolidation is now likely, with upward potential if buyers hold key levels. "Copper bulls should stay alert — as long as $6.4174 holds, the path forward looks constructive and upside targets remain in play."

Earlier, analysts noted that structural supply constraints and long-term demand growth are expected to keep upward pressure on copper prices in the coming years. While the latest market dynamics have induced a near-term consolidation, traders should monitor the $6.5362 level as a potential trigger for renewed upside momentum.

Source of Data: HG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.