Commodity Trading Tips for Copper by KediaCommodity

Ajay Kumar Kedia 25 July 2014

Copper Copper settled up 1.94% at 435.45 as prices continued to digest upbeat data from China, and improving economic figures from the US also created impetus for commodity prices. Although the Markit's preliminary US manufacturing PMI missed forecast in July and June's new home sales sank to a three-month low, initial jobless claims last week dropped to the lowest since February 2006. In other news, world's largest copper producer Codelco confirmed that it had to cancel some orders and buy copper from physical markets as construction progress at one of its new mines turned out slower than expected. Meanwhile Goldman Sachs said it expects copper to underperform other base metal prices over the next 12 months, citing the red metal's heavy exposure to China's property sector, which it expects to remain bearish this year and next. The bank also said copper has entered a once-in-20-year supply cycle, which started in the second half of 2012 and is set to last through to 2016/17, following a decade of high capital expenditure investment in the industry, raising trend supply growth to about 4-5 percent from about 2 percent over the past decade. Goldman lowered its 2015 average copper price forecast to $6,400 per tonne from $6,600, in a note to clients dated July 23. The investment bank also cut its 2016 outlook to $6,600 per tonne from $7,000 partly due to expectations of lower marginal production costs. Technically market is under fresh buying as market has witnessed gain in open interest by 0.25% to settled at 10549 while prices up 8.3 rupee, now Copper is getting support at 430.1 and below same could see a test of 424.8 level, And resistance is now likely to be seen at 438.2, a move above could see prices testing 441.