The consistent plunge in copper prices is likely to continue further, according to Fairlead Strategies' Katie Stockton, and although that could be viewed as a good sign for taming inflation, it's bad news for the broader economy.

Copper prices are often viewed as a significant indicator of the broader economy and a dependable barometer of economic health as the industrial metal is used as an input in a vast majority of goods sold. As demand rises for copper due to economic strength, so does the price, and vice versa.

Copper prices have been plummeting since their early March high of about $5 per pound, with the metal sliding more than 30% to $3.41 per pound. Stockton expects the plunge to continue, arguing that copper could dip another 11% from Thursday's close to $3.14 per pound.

"Copper prices have lost short-term momentum after rolling over below cloud-based resistance last week. Now back below initial support from the 50-day moving average, copper's loss of momentum within its prevailing downtrend increases risk to Fibonacci support at $3.14 per pound," Stockton said.

A decline to $3.14 would represent a peak-to-trough drop of 38% in just five months, and moves of that magnitude are typically associated with an economic pullback.

"Copper's tendency to reflect economic conditions is evident in the chart [below]. The chart shows that after the starting dates of the past 10 OECD-defined global economic slowdowns, copper has been down by means of -4% six

But the decline in copper prices so far this year is not deep enough to suggest a sever economic slowdown is imminent, according to NDR. "2022 [copper price] declines have thus far been more consistent with moderate [economic] slowdown," NDR said.