Recession Ahead? Watch Dr. Copper

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by Jesse Colombo

After selling off this summer, copper has been consolidating over the last couple months and appears to be forming a wedge-type pattern that may indicate another strong move when the metal breaks out from it one way or another. Copper has a reputation for leading the global economy and is known as “the metal with a PhD in economics.” As our Chief Investment Strategist Lance Roberts recently showed, there is a rising risk of a recession, and the financial markets may be starting to price this in.

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If copper breaks down from its most recent wedge pattern, it would be a worrisome sign for the global economy. The next price target and support level to watch is the $2.5 per pound support level that came into play over the last couple years.

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Copper Daily Chart

The weekly chart below puts the current wedge and support levels into perspective. If copper breaks down from its wedge, the next support to watch is $2.5 and, after that, $2 per pound.

Copper Weekly Chart

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