Copper prices have maintained their upward momentum, but analysts at TD Securities (TDS) suggest that Commodity Trading Advisors (CTAs) are unlikely to initiate significant buying activity in the near term.
Limited CTA Buying Expected
Daniel Ghali, Senior Commodity Strategist at TDS, notes that while a strong market uptick could trigger some CTA purchases by next week, any such buying is expected to be modest at best. This places the burden on other market participants to sustain the rally and prevent a local price peak.
Discretionary Traders Drive Market Strength
Meanwhile, discretionary trader participation has increased, indicating that the recent surge in copper prices may be supported by additional buying from this group. However, TDS estimates suggest that discretionary positioning has now reached its highest level since last year’s Comex Copper arbitrage squeeze, raising questions about the sustainability of the rally.
Traders will be closely watching market dynamics in the coming sessions to gauge whether copper’s rally can continue without significant CTA involvement.
