MCX Copper under short covering; Resistance seen at 511.2
Commodity Online | July 22 2020
UPDATED 10:10:11 IST

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MCX Copper under fresh buying; Support seen at 520

MCX Zinc under long liquidation; Resistance seen at 192.3

Technically Copper market is under short covering as market has witnessed drop in open interest by 12.9% to settled at 3821 while prices up 6.45 rupees.

Now MCX Copper is getting support at 505.3 and below same could see a test of 501.5 levels, and resistance is now likely to be seen at 511.2, a move above could see prices testing 513.3.

Copper yesterday settled up by 1.28% at 508.95 as the European Union leaders clinched a "historic" stimulus deal and as data from coronavirus vaccine trials boosted hopes for a swifter global economic recovery.

European Union leaders agreed on a massive stimulus plan for their economies at a pre-dawn meeting while early data from trials of three potential coronavirus vaccines showed positive results.

Gains, however, were capped by a steady rise in virus cases worldwide and lingering uncertainty over the final outcome of the vaccine trials. Refined domestic copper prices fell 2.1% to 51,375 yuan a tonne from a 25-month-high hit in the previous session.

A rebound in the economy of top metals consumer China and supply disruptions, mainly in the world's main producing region South America, has boosted prices.

But a surge in cases of the coronavirus has thrown into doubt any quick rebound in the global economy, hitting copper, which is also used as a bellwether for economic health. Large holdings of copper warrants have fuelled concern about nearby supplies on the LME market.

This can be seen in the premium for the cash over the three-month contract which was last at $11.30 a tonne, its highest May 2019. Also indicating tightness on the LME market are cancelled copper warrants – metal earmarked for delivery  at 40% of total stocks of 195,825 tonnes.

Trading Ideas:
--Copper trading range for the day is 501.5-513.3.
--Copper prices rose as the European Union leaders clinched a "historic" stimulus deal.
--Gains, however, were capped by a steady rise in virus cases worldwide and lingering uncertainty over the final outcome of the vaccine trials.
--Refined domestic copper prices fell 2.1% to 51,375 yuan a tonne from a 25-month-high hit in the previous session.

Courtesy: Kedia Commodities

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