Commodity Trading Tips for Copper by Kedia Commodity

Ajay Kumar Kedia 12 August 2013

Copper Copper yesterday settled up at 442.25 as all basemetals all rocketed to their highest levels in roughly two months or more on a view that data from China the last two days suggest that the economy in the key commodity-consuming nation is holding up better than previously thought. The bounce got an extra boost from short covering, in which speculators with short, or bearish, positions became buyers to offset their bets. Still, market are offering at least some caution about the outlook for the base metals until there is more clarity on the strength of the Chinese and global economies, as well as supply/demand surpluses in some of the metals. Data Thursday showed that China's overall exports rose 5.1% year-on-year in July after a small fall in June and were well above expectations for a 3% rise. Imports jumped 10.9% yoy. Further, the trade data showed that Chinese copper imports rose 12% year-on-year in July to a 14-month high of 410,680 metric tons, which market attributed to bargain hunting and arbitrage on the difference in prices between the LME and Shanghai Futures Exchange. The country is the world's largest consumer of the red metal. Then on Friday, Chinese authorities reported that industrial production accelerated 9.7% year-on-year in July. Expectations had been for 8.9%, which would have been unchanged from June. Earlier in the week, European economic data also showed improvement, Briggs added. Further, the U. S. dollar had a softer tone in recent days, which can help demand for commodities generally by making them less expensive in other currencies. Technically market is getting support at 441.60 and below same could see a test of 441.10 level, And resistance is now likely to be seen at 442.70, a move above could see prices testing 443.20.