Copper moved in a very wide range trading in both directions. The main driver of the metal has been China. The stocking of the metals by the country supported the prices in the starting of the month whereas the prices started to drop as this buying slowed down. The LME warehouse stocks have been declining constantly since a couple of days and on the other hand Shanghai warehouse stocks showed an increase indicating the amount of buying done by China. Stockpiles of copper monitored by the Shanghai Futures Exchange reached a 22-month-high of 68,536 tonnes in the month of June, almost four-times the level at the start of the year. Chinese buyers boosted imports to records in May to replenish stockpiles.
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A rise in the dollar and positive economic data being released across the globe which raised the hopes of recovery in the economy also provided support to the prices. However, in a very short span of time copper may remain under slight pressure due to slow seasonal demand as the usage of the metal slows during the summers. The tussle between bulls and bears continued throughout the month, with red metal swinging in both directions .It posted a high of Rs256.95/kg after a lapse of around 8 months, but bearish pattern was formed at higher levels, pinning down prices to lower levels of around Rs230/kg, which is acting as a crucial support for the counter and from where it has been able to regain some of its lost ground.
Any breach of the same in coming days would prompt selling spree in the counter, but till then the overall trend is tilted in favour of bulls, as it is sustaining above its 50 Day and 200 Day EMA and is also supported by the up trendline depicted in the Daily chart. The metal can strengthen further from here on, incase it manages to close above Rs250/kg and $5150/Mt in LME which is still resisting upside. On being able to crossover the hurdle, the counter can ascend higher towards elevated levels of around Rs262/kg and then even Rs270/kg.
Courtesy: Religare Commodities
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