Gold Silver Reports ~ Copper MCX settled up 0.3% at 335.50 ended flat on Tuesday as a weaker dollar balanced persistent concerns over demand in top metals consumer China and uncertainty ahead of the U.S. Federal Reserve’s policy meeting.
♦ Support seen on ECB as investor optimism spread in the wake of the last week’s European Central Bank’s (ECB) announcement that it plans more economic stimulus. ECB reduced the rate on cash parked overnight by banks by 10 basis points to minus 0.4% and lowered its benchmark rate to zero. Bond purchases were increased to €80bn a month from €60bn, and corporate bonds will now be eligible.
♦ The ECB’s stimulus measures failed to weaken the euro and ended at 1.1156$ against the US dollar. The dollar rose against a basket of currencies by end of last week, bolstered by an increased appetite for riskier assets following unexpected action from the European and Chinese central banks and ended at 96.172. On the whole commodities rallied amid currency volatility. Last week Copper MCX soared on Friday, climbing 0.95%, to finish the trading session at $2.241 a pound.
♦ In spite of this modest untick, rates of the red metal did not manage to advance over the course of the prior trading week, settling 1.01% lower reversing their best weekly performance since December 2011, being mainly influenced by renewed jitters about the state of Chinese economy, which remains in the middle of a persistent slowdown that will most likely require Beijing to move forward with more support in the foreseeable future.
♦ In the meantime, rates of Copper MCX have rebounded already around 8% since the beginning of the year. Technically now Copper MCX is getting support at 330.9 and below same could see a test of 328.50 level, and resistance is now likely to be seen at 337.9, a move above could see rates testing 340.50. ~ Neal Bhai Reports