Copper prices found some ground from seven-week lows and recovered nearly half per cent. Base metals paused their recent fall today after China’s central bank sought to stem the rising tide of pessimism over the country’s property market and the wider economy.
U.S. Comex copper futures (HGcv1) up 1.01% to $3.7005 a lb. MCX August future traded at 723.90, up 0.40%,
Prices had fallen more than 2.50% in the last two weeks on simmering worries over the impact on demand from a deepening property crisis that is stifling momentum in China’s economy and the potential for further increases to U.S. interest rates.
The latest unfavourable information pointing to a sharp decline in the momentum of the broader economy was revealed on Wednesday by statistics showing China’s new home prices decreased for the first time this year in July.
Further, Hawkish signals from the minutes of the Fed’s July meeting pushed the dollar close to two-month highs, further pressuring red metals prices.
Japan’s weak trade figures, which showed a decline in exports in July, especially to China, added to worries about a global economic downturn.
Technical Outlook
Since 1 August 2023, Copper prices have been trading under pressure. Prices retreated from the high of 757.75 and made a low of 718.25 earlier today. However, prices recovered smartly and traded at 724.20.
On the above chart, a falling wedge pattern breakout was noted which is indicating that an upside momentum is assumed to take place. A break above 725.80 will test 728.80-735.50 very soon.
Else, every dip towards 722-720 could attract near-future buying activities.
On the downside, crucial support is seen at 717.50 and a break below only prices will retreat towards 712.20-708.00.