Copper prices recently stalled and managed to recover more than four per cent. It was the biggest weekly gain in eleven months. Hindus were strongly supported by falling stocks and support from China’s largest economy.
Three months of copper on the London Metal Exchange HG1! grew 2.1% to $8,488 per ton. Prices for metals used in the electrical and construction industries are up 3.9% this week, the biggest weekly gain since last March. The Comex dividend was at $3.8385, up 4.26%.
It hit a two-week high of $8,495.5 earlier in the session, breaking through key technical barriers including the 21-day, 50-day and 200-day moving averages, traders said, due to subdued trade caused by China’s month-long New Year’s holiday.
Copper is lower in early Asian trade on possible position corrections, but losses are likely to be limited by hopes for Chinese demand after the end of the month,
But dollar strength limited gains in industrial metal prices, especially after US production prices. . confirmed expectations that the US Federal Reserve will keep interest rates unchanged until mid-2024 or later. A stronger US currency makes dollar-denominated metals more expensive for holders of other currencies.
China and the central bank also left key interest rates unchanged on Sunday as expected, as they pushed back on medium-term bond maturities and uncertainty over the timing of Federal Reserve easing will constrain Beijing and monetary policy guidance.
The People’s Bank of China (PBOC) said it was keeping the rate on 500 billion yuan ($69.51 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation.
Sunday’s operation was meant to “maintain banking system liquidity reasonably ample,” the central bank said in an online statement.
Technical Outlook – Copper
Comex Copper prices pause their recent fall last week, and recovered 4.26%. Prices touched a weekly high 3.8440 and settled at 3.8385 compared to previous week close of 3.6815.00
On the above chart, prices found strong support from lower trend line of pennant pattern. Also, recent prices action resulted in formation of bullish piercing line candle stick. Adding to this, prices traded above short term moving average. All of which are indicating for a upward momentum in near future.
Although, prices would need to trade above 3.8445 in order to test next resistance 3.8025-4.1025. Else, any short-term dip towards 3.7700-3.6065 could attract buying activities.
On the downside, crucial support is seen at 3.6475 and below it prices may retreat towards 3.5525-3.3025.
Commodity Samachar”
Learn and Trade with Ease
Also Read : Economic Outlook: US Core PPI Data Taking the Spotlight Today? , Silver Outlook: With it inching to two weeks high does it still look strong?
Recommended Read : Forex Newsletter – 16 FEB 2024
Want help on your traders?
Chat with our Analyst