Copper yesterday settled down -0.51% at 417.50 declining on the back of weak Chinese manufacturing data, while gold was also trading close to six-week highs. The preliminary reading of China’s HSBC manufacturing purchasing managers’ index fell to 47.7 in July, from a final reading of 48.2 last month. While Copper supported after China’s premiere said Tuesday that economic growth must remain above 7%. Last week’s China’s central bank said it was removing the lower limit on interest rates for banks, to help spur growth. However, LME copper recovered some earlier losses as US durable goods orders in June rose more than expected. Greece has met requirement for the next tranche of bailout funds, pushing the euro up. US economic data released overnight were mixed. Durable goods orders rose more than expected by 4.2% in June, but initial jobless claims in the week ending July 20 were worse than expected. Goldman Sachs cut its forecast for US Q2 GDP growth following these figures, weighing LME base metals prices down. However, Hilsenrath said in an article that the US Fed may keep current bond-buying program in place during the July meeting. This raised expectations that the Fed will maintain QE3 for the immediate term, helping base metals rally. In China, funds outstanding for foreign exchange pointed to negative growth in June and interest rates in the market is rising as the month comes to an end. Cloudy monetary policy is jittering investors. Markets are now expecting the PBOC to launch reverse repurchase now that the PBOC has not launched repurchase for six consecutive months. Technically market is getting support at 414.10 and below same could see a test of 410.70 level, And resistance is now likely to be seen at 420.10, a move above could see prices testing 422.70.

Trading Ideas:

Copper trading range for the day is 410.8-422.8.

Copper seen under pressure from concerns that a slowing Chinese economy may dent demand amid ample global supplies.

Better than expected industrial growth data in EU and housing data from US only partially offset concerns about the slowdown in China.

Durable goods orders rose more than expected by 4.2% in June, but initial jobless claims in the week ending July 20 were worse than expected.