Copper On MCX Settled Down -3.68% At 362.25

Copper on MCX settled down -3.68% at 362.25 as supply fears were eased by a large rise in stocks and worries over Chinese demand pulled down prices. Pressure seen as copper on the London Metal Exchange closed down 3.5 percent at $5,600 a tonne, on course for its biggest fall since September 2015. On Tuesday it had touched $5,820, its highest since April 10. Wednesday’s losses continued after the Federal Reserve decided to maintain its current interest rate. The fed also shrugged off the weak US Q1 GDP reading as “transitory”. It was widely expected that the Fed would hold steady on rates on Wednesday. Had the Fed shocked markets with a rate hike, copper would have likely seen even steeper losses. To note, the Fed’s reaction to the weak Q1 GDP reading bodes well for copper, an economically sensitive metal. Most of copper’s downside could simply be a result of the recent rally which is being seen as an overreaction.

There was even the talk that the jump could have been the result of a “fat finger” trade. The one fundamental support was a rally of thousands of workers at Freeport-McMoRan’s Grasberg mine in Indonesia ahead of a planned month-long strike but the price response was seen as “too dramatic”. Meanwhile, on the political front, investors looked ahead to a televised French election debate, between pro-EU candidate Emmanuel Macron and far-right candidate Marine Le Pen. According to the latest polls, pro-EU candidate Emmanuel Macron holds a healthy lead, about 20 percentage points, over far-right candidate Marine Le Pen. Now technically market is getting support at 358 and below same could see a test of 353.6 level, And resistance is now likely to be seen at 370.7, a move above could see prices testing 379. 
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Suhani Verma

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