Copper Future fell more than two and a half percent last week. It was the biggest weekly drop since June 19, 2023. Prices hit their lowest level in nearly three months, falling more than 5% since the start of the month on a strong US dollar and pessimistic industrial sentiment in China.
MCX Copper traded at 701.00, down 0.39%. Recently touched 700.65.
Continued macroeconomic headwinds in China, the world’s largest consumer, further weakened the outlook for base metals.
Deflation in the country unexpectedly rose to a 14-year high, while the official manufacturing PMI showed a fourth straight decline in January.
The development was in line with the continued decline in the Yangshan copper premium as mills refrained from buying the metal, while inventories at major Chinese warehouses rose more than 120% year-to-date to nearly 70,000 tonnes. In addition, strong US economic data boosted the dollar used in copper futures prices, squeezing the purchasing power of major importers and raising borrowing costs for industrial operations.
Technical Outlook – Copper:
The price of copper fell by 2.5% last week. Prices rose to a three-month low. 703.75 on Friday compared to 722.05 last week.
According to the outlook issued on 02/06/2024, after breaking the support of 712.00, prices fell to the predicted levels of 706-700.00.
Momentum still looks negative on the chart. And it was expected that prices will soon fall to the next support at 696-696.50-693.50. However, prices must break below 699.50 to test the next support.
Alternatively, immediate resistance is seen on the top at 705.50 above it, prices can recover to 712.50-718.50.
Commodity Samachar
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