Commodity Trading Tips for Copper by KediaCommodity

Ajay Kumar Kedia 19 August 2014

Copper Copper settled up 0.49% at 417.85 as traders built up stocks on fresh signs of economic recovery in US and a view that the sell-off was too heavy. However gains were capped after new home prices in top metal consumer China fell in July for the third month in a row. Investors are still jittery about developments in China, however. Foreign direct investment also dropped unexpected for the first time in 17 months, as manufacturing companies in Japan, Europe and the US cut spending. Prices were weighed down by news on Monday that price falls in new housing also spread to a record number of Chinese cities including Beijing, underlining a worsening property downturn that is increasingly dragging on the broader economy. Foreign direct investment in China also unexpectedly fell for the first time in 17 months compared with the same period a year earlier, as firms from Japan, Europe and the United States cut spending in the manufacturing sector. A recovery in copper prices that began in mid-March fizzled out as mines ramp up shipments and supplies swell. Suspected metals fraud in China has also curtailed traders' ability to get credit as banks have clamped down on risky lending practices, curbing demand for the metal. According to Chinese industry experts, the refined copper surplus in the country is expected to further widen in 2014 on the back of low demand from collateralized borrowing sector and construction industry. Technically market is under short covering as market has witnessed drop in open interest by -9.31% to settled at 13857 while prices up 2.05 rupee, now Copper is getting support at 416.1 and below same could see a test of 414.2 level, And resistance is now likely to be seen at 420.1, a move above could see prices testing 422.2.