Copper on MCX settled down -0.37% at 385.35 traded with weakness as fresh selling seen in yesterday's session and prices slipped on Wednesday to a one-month low on selling triggered by a higher dollar, lower imports of the metal by top consumer China and rising inventories. Growing expectations the U.S. Federal Reserve will hike rates next week have boosted the U.S. currency which could mean weaker demand.
Copper prices have been dragged down by a surge in exchange inventories that has fanned concern about demand strength in Asia. LME copper stocks have jumped by one-third in the past week to the highest since late January at about 262,000 tonnes. However, mine disruptions in Chile, Peru and Indonesia are still supporting prices, with the prospect of labour unrest expected to carve deeper into supply deficits forecast for this year.
For today trades are expected to be weak as some nervous profit-taking ahead of next week’s FOMC meeting and a somewhat disappointing speech last week from US president Donald Trump. Other markets are also on a back footing, so some light risk-off seems to be unfolding.
That said, the Chinese trade data was bullish, stronger imports into China suggests the recovery is gaining momentum and that can only be good for metal demand. Technically market is getting support at 383.7 and below same could see a test of 381.8 level, And resistance is now likely to be seen at 388.7, a move above could see prices testing 391.8.