Copper selling pressure has been quite strong since the start of the week. In the middle, participants blame soft economic data from China and rising inventories in most global warehouses, which predict weak demand.
Prices fell to three-month lows without fresh stimulus from a key meeting in China and as investors switched to gold instead of copper to bet on earlier US Federal Reserve rate hikes.
MCX Copper future made a low 827.25, down 1.49%. While, three-month copper HG1! on the London Metal Exchange (LME) was 2.6% lower at $9,385 a metric ton. It earlier fell to $9,379.5 for its lowest since April 12.
The Chinese government issued a communique after a closed-door meeting of the ruling Communist Party’s central committee members without detailing changes to be implemented at a time of financial hardship.
Lack of policy support towards the Chinese economy that consumes half of the world’s copper could weigh on the metal’s demand prospects.
Further, China’s June imports of copper slipped to a 14-month low. Copper inventories in LME-registered warehouses, meanwhile, have risen to a 33-month high of 221,100 tons, LME data showd.
Apart from that, In the broader view, stable global growth and major central banks cutting rates into resilient economies might be favorable drivers for the copper prices but more expansionary policies from Chinese officials would give a stronger support for prices.
Technical Outlook : Copper Future
Prices plunged towards 827.25, that was a lowest level after 23 April 2024, and settled at 827.90 compared to the previous day’s close of 840.40.
A black opening Marubozu candle stick formation on the chat is indicating a heavy selling pressure in the prices. And prices expected to test next support 820-818 very soon.
Immediate support is seen at 825.00 and there is a break below extending the decline to 820-818.00. Otherwise, prices may stabilize in the range of 826-840.00 in the near future.
Happy Trading!
Commodity Samachar
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