Copper prices dropped over two percent on Tuesday to their lowest in two weeks, after top metal consumer China failed to convince investors on how its stimulus would get the economy back on track.
Three-month copper on the London Metal Exchange CMCU3 fell earlier to $9,700 per metric ton, the lowest level since Sept. 24. It last traded 1.8% lower at $9,745 a ton. MCX Copper settled at 834.95 down 2.2%.
Copper prices hit four-month high last week, after China announced its biggest stimulus package since the pandemic. Analysts had anticipated bold moves on lifting the heavily-indebted property sector that weighed on consumer confidence.
But a briefing on Tuesday provided little details on the stimulus other than a repeat of China’s “full confidence” in achieving its full-year growth target.
Industrial metals fell as the market worried that already announced measures will only help stabilize growth but may not be enough to support a rebound, said Ole Hansen, head of commodity strategy at Saxo Bank.
Disappointment over the stimulus sent Hong Kong’s Hang Seng index .HSI 9.4% lower on Tuesday – its heaviest fall since 2008, with record falls in property stocks, and also ate into the blue-chip CSI 300 index .CSI300 gains.
Commodity prices also came under pressure from growing expectations of a less aggressive easing campaign from the Federal Reserve following a stronger-than-expected September jobs report.
Today, US FOMC meeting minutes will in Focus.
Technical Outlook – (Copper Price)
Copper prices experienced a significant intraday decline of over 2%, marking the largest drop in more than two weeks. The prices settled at 834.50, down from the previous day’s close of 853.85.
The formation of a long bearish candlestick suggests intensified selling pressure. Additionally, the RSI (Relative Strength Index) has shown a bearish crossover, reinforcing the negative sentiment and pointing towards further downside potential in the near term.
However, for a sustained bearish move, prices would need to break below the immediate support at 828.50, opening the door to test the 824-820 levels. Should this support hold, prices may consolidate within the 830.50-845 range in the coming days.
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