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Copper, Gold and More: A Fresh Look at Industrial and Precious Metals

Our Senior Metals Analyst weighs in on the recent price action in copper and more

by Alexandra Lienhard
Updated: April 21, 2017

Tom Denham, the editor of our Metals Pro Service, outlines the Elliott wave patterns he's looking at in copper, aluminum and gold and discusses what these patterns imply for the future of these markets.

 

Alexandra Lienhard: Tom Denham, Elliott Wave International's Senior Metals Analyst and editor of EWI's Metals Pro Service is joining me today on Elliott Wave TV. Hi, Tom. It's nice to see you.

Tom Denham: Hi, Alex.

AL: So I know we usually start our discussions by talking about gold, but copper is such an economic bellwether that I thought it'd be good to start there today. Now it's been pretty heavy lately. Is this the beginning of a larger collapse?

TD: I wish it was. Long term -- very long term -- I'm expecting copper to go down significantly, but it's not quite ready yet. The problem with copper is it has not finished its pattern to the upside. And so we're in a holding period for the present time. And it's got a few more swings to complete before I think real weakness comes into this market.

AL: And looking at aluminum and lead, is a similar pattern playing out there as well?

TD: I actually expect copper to start heading to the downside sooner than I think either aluminum or lead will. I'm looking for aluminum to make a rather significant rally into the end of the year. With lead, more of a medium term rally -- maybe two, three, four, five, six months. But with copper, I think there's potential for a top forming one to two months from now.

AL: And Tom, circling back around to gold, the yellow metal is taking out its 2017 peak as you forecasted. So looking ahead onwards and upwards?

TD: Probably not today. Next week's a good possibility for seeing price moving on to new highs. My view for the coming months is certainly bullish. And we've been in a corrective pattern recently, but I think that's going to complete itself relatively soon. And then the broader trend will move onto the higher levels.

AL: And now it would appear that the bugs and the miners are moving in opposite directions. Is that unusual? What's your take?

TD: Well it was a bit of a surprise. The bugs and the miners were down more yesterday than I had anticipated, but they did not break a critical level. And at this point I'm viewing the gold stocks as in a correction to the downside. And I'm expecting them to find bottoms relatively soon. It would make a mess out of the pattern if they continued to fall over, and we've got a line in the sand. There's a certain point that the Elliott Wave principle tells us that if they go any lower than that, then something's wrong. And we're not at that point. And so for now I have a broadly bullish view for gold stocks, but short term they certainly have been bearish.

AL: Well, thanks for talking with me today, Tom. I appreciate your time.

TD: OK. Thank you, Alex.

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