MCX Copper under fresh buying; Support seen at 511.6
Commodity Online | August 07 2020
UPDATED 10:10:46 IST

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Technically Copper market is under fresh buying as market has witnessed gain in open interest by 9.06% to settled at 3490 while prices up 4.2 rupees.

Now MCX Copper is getting support at 511.6 and below same could see a test of 507.3 levels, and resistance is now likely to be seen at 518.3, a move above could see prices testing 520.7.

Copper yesterday settled up by 0.82% at 515.95 as demand in top consumer China strengthened and investors worried about coronavirus-hit supply overseas.

Prices also seen supported as expectations of stronger economic growth and demand due to central bank and government stimulus, a lower dollar and sliding stocks boosted sentiment.

Chile's largest copper mines boosted output in June, according to government statistics, even as the coronavirus outbreak hit. The Chilean Copper Commission (Cochilco) reported that Codelco, the world's top copper producer, raised production by 2.5% from June 2019, to 131,900 tonnes.

BHP's Escondida mine, the largest copper deposit in the world, increased production by 1.6% year-on-year, to 105,800 tons. Copper stocks in LME registered warehouses at 122,450 tonnes are at their lowest since the middle of January and down more than 50% since May.

Also reinforcing the idea of a tight LME market are cancelled warrants – metal earmarked for delivery – at nearly 60% of total copper stocks. However, the narrowing premium for the cash over the three-month copper contract suggests the flow of metal leaving LME warehouses may soon come to an end.

China's factory activity expanding at the fastest pace in nearly a decade in July has supported prices of industrial metals in recent days, as has an improvement in manufacturing activity in the euro zone and the United States.

Trading Ideas:
--Copper trading range for the day is 507.3-520.7.
--Copper prices gained as demand in top consumer China strengthened and investors worried about coronavirus-hit supply overseas.
--Copper stocks in LME registered warehouses at 122,450 tonnes are at their lowest since the middle of January and down more than 50% since May.
--Chile's largest copper mines boosted output in June, according to government statistics, even as the coronavirus outbreak hit.

Courtesy: Kedia Commodities

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