Copper settled down -0.60% at 433.95 as inventories expanded amid signs of lower demand for the metal as loan collateral in China. Prices also seen pressure after Eurostat said the euro zone’s industrial output fell 1.1% in May, the biggest fall since September 2012, but the indicator was still up 0.5% from a year ago. On the other hand, the financial report of the Citigroup and news on several acquisitions were welcomed by the markets, allowing US shares to rise further. Meanwhile, European Central Bank President Mario Draghi reiterated at a quarterly policy meeting that the ECB will introduce quantitative easing (QE) if need be.

The International Monetary Fund agreed to this move, citing that it will help pull out the euro zone from the current economic downturn. Russian President Vladimir Putin reached an agreement with German Chancellor Angela Merkel in Brazil, calling for a new round of negotiation over the Ukraine crisis. Putin condemned the Ukrainian government forces over their attack in Russian territory, killing one. Conflicts between the Kiev army and pro-Russian rebels were escalating since Ukrainian President Petro Poroshenko discontinued ceasefire on July 1.

LME three-month copper tested a low of USD 7,116/mt and closed down USD 32/mt at USD 7,128/mt. The cash-to-three-month copper spread flipped into a USD 1/mt contango. Investors are expected to be cautious on Tuesday before the release of US Federal Reserve Chair Janet Yellen’s testimony and China’s economic data. Technically market is under fresh selling as market has witnessed gain in open interest by 2.38% to settled at 9712 while prices down -2.6 rupee, now Copper is getting support at 432.6 and below same could see a test of 431.3 level, And resistance is now likely to be seen at 436.1, a move above could see prices testing 438.3.

Trading Ideas:

Copper trading range for the day is 431.3-438.3.

Copper dropped as inventories expanded amid signs of lower demand for the metal as loan collateral in China

European Central Bank President Mario Draghi reiterated at a quarterly policy meeting that the ECB will introduce quantitative easing (QE) if need be.

China’s imports of unwrought copper and copper products fell in June to the lowest since April 2013, data showed