MCX Copper prices were up on Friday, supported by weakness in the Indian rupee. The red metal is hovering near its all-time peak of Rs 1,055.25 set this week as supply concerns keep the appeal of this base metal intact.
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Around 11:50 AM today, the MCX December copper futures were trading at Rs 1,090.40, up by Rs 16.10 or 1.65% per kg.
The Indian rupee fell past the key psychological level of 90 to the dollar on Wednesday, extending an eight-month decline as dollar outflows for trade and investment and a rush by companies to hedge against further weakness pummelled the currency.
Meanwhile, the copper prices in the international markets retreated due to lower risk appetite, even as the investors locked in profits following a rally which took prices to record highs in the previous session.
The three-month LME copper contract was hovering around $11,145 a metric ton, down 0.95%.
That the planned Chinese smelter cuts and higher contract premiums from Chilean giant Codelco are keeping the copper metal near all-time peaks and triggering fresh supply worries.
“Prices are elevated not just because of the present term demand, but because the market participants are bracing for a future supply squeeze in the coming months. Additionally, a weaker US dollar, driven by strong expectations that the Federal Reserve will cut interest rates in December, is another tailwind, since dollar-priced metals look cheaper to buyers using other currencies,” he added.
Technical view
Mishra said that MCX copper has been gaining strength week-on-week, as observed from the higher high and higher low formation. The base metal is comfortably placed above the short-term moving average, which is a clear evidence of a robust bullish momentum, he added.
Copper has recently faced resistance around Rs 1,100, where the up move stalled, and it is now consolidating near the Rs 1,100-1,1112 zone.
Copper trading strategy
Positionally, as long as Copper holds above the Rs 1,060 support area, the trend is likely to stay positive for the next 4-6 trading sessions and a sustained move above Rs 1,097 could open the way toward Rs 1,100-1,112, while any dip below Rs 1,040 may weaken the momentum, albeit for a very short term.
Overall, the short-term outlook is bullish, with buying on dips favoured moving forward, Mishra said.
Disclaimer
This article is intended for educational purposes only. The views and opinions expressed are those of individual analysts or brokerage firms and do not represent the views of GoldSilverReports.com. Investors are strongly advised to consult certified financial experts before making any investment or trading decisions.
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