Commodity Trading Tips for Copper by KediaCommodity

Ajay Kumar Kedia 12 June 2014

Copper Copper settled down -0.30% at 399.65 declined for the sixth time in seven sessions as a Chinese probe into financing transactions eroded demand prospects for deals using the metal as collateral. Officials are looking at whether metals stockpiled at Qingdao Port fell short of obligations used to secure loans, and are focusing on Decheng Mining, said two bankers assisting the inquiry. The probe may curb copper inventory financing, a source of demand. Prices of the red metal have been under heavy selling pressure in recent sessions and once again settled below 400 level mark as traders worried about the outcome of a Chinese investigation into commodities-fueled financing deals that could hurt demand for the industrial metal. Concerns about fraud in commodities markets spread to a second Chinese port of Penglai earlier this week after authorities 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. Prices also fell after the World Bank cut its estimate for 2014 global economic growth. The World Bank has cuts its world growth forecast from 3.2% to 2.8% this year, lowering its growth outlook for the US from 2.8% to 2.1% and China from 7.7% to 7.6%. The institution also cut its 2014 growth forecast for Brazil from 2.4% to 1.5%, and India from 6.2% to 5.5%. Technically market is under long liquidation as market has witnessed drop in open interest by -1.83% to settled at 24484 while prices down -1.2 rupee, now Copper is getting support at 397.7 and below same could see a test of 395.6 level, And resistance is now likely to be seen at 402.6, a move above could see prices testing 405.4.