Last Updated : July 30, 2010 15:50
Base metals regain on signs of demand
Copper prices have fallen 23% from their April highs but have since made tentative moves higher in the month of July along with other industrial metals on signs of strong demand and expectations for growth in China, and reached to its highest level in three months.
The higher expectations of China’s growth and the International Energy Agency (IEA) announcement for China as world's largest energy consumer leaving behind the U.S were the major driving force.
The global copper demand was robust despite the bumpy economic recovery as cautioned by Federal Reserve Chairman Ben Bernanke's. Moreover, the consistent drop in copper stocks in LME for the month of July so far, suggested stronger demand for the metal than estimated and price is expected to remain in the upper range.
Despite China’s sharp decline in imports during June, demand for cable from wire makers boosted production rates because of a revival in power grid investment, further justify for the consistent demand of red metal in coming weeks.
The past rise in copper prices have also proven that the physical markets of copper are stronger than economic indication in the US. Copper prices have perked up this month by around 12% after being in oversold territory for a long span of time. The counter was able to build ground at levels of around Rs291293/kg and has thus soared higher to even trade above its 50 and 200 Day EMA.
In the initial days of the month, the counter was logged in a range with red metal displaying lack of strength to surpass the level of Rs316/kg, but after having crossed that level, there was no looking back for the counter and it zoomed higher to touch a recent high of Rs334.80/kg, a level which was last seen in the month of April.
Going forward, there can be some selling pressure in the counter which might result in prices descending from current levels. However, as per the overall scenario, there is enough room in the counter to even test the level of Rs359/kg which is still the high for the year. Supporting the same fact, is the breakout from the trend line depicted in daily charts, which is indicative of continuation of upward momentum in coming days as well.
Courtesy: Religare Commodities Get Trading Tips that suits your kind of investment
MCX CARDAMOM 15 May 2012
contract was trading at
Rs 705 , up Rs. 15 . What's your view on it?
