GLOBAL MARKETS
Copper closed marginally up for the fortnight, as the dollar slumped & gold prices climbed to a record, a sign that accelerating inflation remains a concern to investors closing the week at INR 290.80 for the Nov contract.
Chinese import numbers were a good surprise, coming in higher than people were expecting. Copper's move is really dollar-related. BMP Billiton halted extraction at its Spence copper mine in Chile after workers went on strike, but the mine is fairly small so the strike is not likely to impact prices much. Also, with workers at Escondida in Chile having accepted an early wage offer from BMP Billiton, the impact of the Spence strike was further muted.
Factor to watch out during coming fortnight i.e. from 16th Nov 09 to 30th Nov 09 Everyone is so negative on the dollar that we could get a temporary bounce the other way. A weaker dollar makes metals priced in the currency cheaper for users of other monies.
An acceptance by the workers at Escondida would be good news for BMP Billiton, as it would avoid a possible strike at the mine & also make further negotiations for the collective contract at its Spence mine easier.
We still have to wait for the breakdown of the numbers of imports of unwrought copper & products later in the month to determine if purchases of the refined metal really did jump, & if so, this may cause domestic supplies to swell, pressuring prices lower.
Price Outlook Trend remains upwards & closing above Rs 299 shall see prices heading towards Rs 323. Immediate support is seen near Rs 285 levels.
Courtesy: National Collateral Management Services Ltd
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