Copper price rises to forecast levels – what next?

Copper price rises to forecast levels - what next?

Copper price continued its sudden rise for the fifth day in a row. Prices rose to their highest level since last March as the dollar weakened as signs of weaker inflation boosted interest rates.

Data compiled by the ISM showed that service provider prices rose by the least in four years.

Copper prices were further increased. by strong economic data from China. , which reduced the country’s fears of a drop in demand.

Both the official and Caixin PMIs in China pointed to an expansion in factory activity during March, beating market forecasts, to suggest the sector may gain some traction after headwinds in China’s manufacturing sustained muted demand for base metals.

Additionally, Chinese copper smelters moving towards a collective output cut amid diminishing ore supplies aided the upward momentum.

Copper prices rose on Wednesday to their highest in over 13 months as the U.S. dollar softened after the latest economic data showed price pressure easing in March.

Benchmark copper HG1! on the London Metal Exchange (LME) traded 2.7% higher at $9,235 a metric ton. It earlier touched $9,277 a ton, its highest since Jan. 31, 2023.

It extended earlier gains after U.S. services industry growth slowed further in March. Services are the main driver of inflation, which is a key indicator for the timing of the Federal Reserve’s first interest rate cut.

Further, The dollar softened from over four-month peak to make greenback-priced commodities cheaper. DXY Also supporting copper prices are improved demand prospects from top consumer China.

Its manufacturing activity expanded for the first time in six months in March, an official survey showed.

However, copper inventory remained high in China. Stocks in warehouses monitored by Shanghai Futures Exchange rose slightly to 291,849 tonnes, its highest in four years. (CU-STX-SGH)

In precious metals, gold prices extended a record run on Wednesday as tensions in the Middle East and hopes of U.S. interest rate cuts continued to push investors into the safe-haven asset.

Technical Outlook- Copper Price

Copper price witnessed a speculative move yesterday and hit a monthly high. Prices rose 2.78%, the biggest one-day gain since March 13, 2024, to 790.65, from the previous day’s high of 769.30.

As per the view given on 2 April, after breaching the resistance 769.20 resistance. Prices touched our forecast level of 77-775.

On the above chart, a strong bullish candlestick shows the continuation of the recent rally. Although prices should rise above 791.80, this opens the door to 794-798-800.00.

Failure of the break will create a probability for a temporary pullback to 780-775, which will attract buying activity again.

On the downside, the decisive support is 770.50, below which prices can retreat to 763-758.00

Commodity Samachar
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