Commodity Trading Tips for Copper by KediaCommodity

Ajay Kumar Kedia 11 June 2014

Copper Copper settled up 0.4% at 400.85 as markets have digested the probe into metals financing irregularities at the China’s Port of Qingdao. While Chinese authorities continued to investigate whether companies used the same copper, aluminum and iron ore stocks as collateral for multiple loans. Concerns about fraud in commodities markets spread to a second Chinese port of Penglai on Monday after authorities already began conducting a probe into allegations of fraud in the port of Qingdao last week. Copper is used as collateral by companies and investors in China, in an effort to work around strict lending standards enforced by Beijing. Meanwhile, official data released earlier showed that the annual rate of consumer price inflation in China ticked up to a four-month high of 2.5% in May while producer price inflation slowed. Also China’s PPI fell 1.4% year on year in May, while its CPI edged up to a four-month high of 2.5%. These two indices both outperformed expectations and April’s figures, in a sign that China’s economy is stabilizing, stimulated by a raft of pro-growth measures. Meanwhile, market concerns over the country’s weakening demand for base metals also decreased, giving a boost to copper prices . Nonetheless, the World Bank cut its outlook for China’s 2014 economic growth to 7.6% from 7.7%, and downgraded its forecast for economic growth in developing countries to 4.8% from 5.3%. Technically market is under short covering as market has witnessed drop in open interest by -2.21% to settled at 24941 while prices up 1.6 rupee, now Copper is getting support at 398.3 and below same could see a test of 395.7 level, And resistance is now likely to be seen at 402.3, a move above could see prices testing 403.7.