As reported by www.commodityonline.com - Copper prices touched a high of $7089 on the LME yesterday backed by dollar weakness, fund interest and a rise in equities. Rise in risk appetite has raised demand for higher-yielding and riskier investment assets. The red metal’s inventories gained 2475 tonnes yesterday but the markets ignored this rise in inventories and continued to gain as the Philippine Associated Smelting and Refining Corp (PASAR) declared force majeure on its copper deliveries after a boiler leak at its smelter, which is expected to cut production by 20% from December.
Factors that could help to provide an upside to base metals:
• Expansion in manufacturing activity in the US in November for a fourth straight month
• China’s manufacturing expanded at the fastest pace since April 2004. The purchasing managers index rose a seasonally adjusted 55.7 from 55.4.
• China’s GDP is expected to expand 10.5% this quarter.
• Weakness in the dollar could make base metals look attractive for holders of other currencies.
Copper – Copper prices are sideways with immediate support for MCX February contract seen at Rs.324.70. Further below, crucial support is seen at 320.70 levels.
Whereas resistance is seen at Rs.331.40 levels & further upwards at Rs. 333.70 levels.
Zinc – Zinc prices are sideways with immediate support seen at Rs.106.35 levels for MCX December contract whereas crucial support is seen at Rs.103.90 level. Short-term resistance is seen at Rs.110.50 whereas major resistance is seen at Rs 112.10 levels.