Commodity Trading Tips for Copper by Kedia Commodity

Ajay Kumar Kedia 8 August 2013

Copper Copper yesterday settled up 0.21% at 431.70 recovered from the days low as surprisingly upbeat industrial production in Germany in June pushed prices. However, markets are cautious after two Fed officials hinted policy makers are considering scaling back of QE3. LME copper rose, but gains were limited, closing USD 23/mt higher at USD 7,020/mt. While the BOE unveiled its "forward guidance" on Wednesday. According to the "forward guidance", the BOE will keep current loose monetary policy in place, providing that price and financial stability comes under no great threat and economic growth risk does not fall significantly. However, the BOE may tighten monetary policy under the following three circumstances: inflation rate stays at 2.5% or above over the next 18-24 months; growing expectations over growing inflationary pressure over the medium term; financial stability is under threat. Investors have closely been looking out for U. S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases. Any improvement in the U. S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months. The Fed's stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar. Copper traders now looked ahead to data scheduled for later in the week on China's trade balance as well as a report on inflation and industrial production, amid ongoing concerns over the Asian nation's economic outlook. Technically market is getting support at 427.110 and below same could see a test of 422.50 level, And resistance is now likely to be seen at 434.10, a move above could see prices testing 436.60.