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Copper May Remain Lower, Selling Recommended

ByCommodityOnline
Published 03/21/2014, 05:56 AM
Updated 05/14/2017, 06:45 AM
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LME Copper
Copper prices at the LME settled lower yesterday at $6430, down by $123 from its previous close. It traded along similar lines in India for the April futures, which ended at Rs 400.20. There was a broad-based sell off in most of the assets and so, copper also traded down. Besides, China’s weakness is continuing, which is basically keeping the commodity subdued. Therefore, despite a huge fall in prices, we are not seeing any major short covering or recovery in prices. This morning at the LME, copper prices were trading marginally lower while the prices in Shanghai are trading steady. As the day progresses, we believe that copper may remain lower and we continue to hold a bearish view on the commodity. However, the equity markets are trading marginally positive this morning in Asia and, the effect of the Fed’s stance on cutting down its asset purchase programme fading might not permit a huge fall in prices. Therefore, we recommend selling the commodity for a minimal price target for the day.

News: Copper is poised for a fourth weekly decline after the Federal Reserve signalled it would raise interest rates, hurting the demand outlook for the metal. Fed officials forecast that the benchmark interest rate would rise to at least 1% at the end of 2015 from close to zero now. Economic growth in China slowed this quarter, according to a survey published by New York-based CBB International. The two nations are the biggest users of copper. Therefore, we believe that structurally, the commodity is still in a bearish mode.

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