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Copper yesterday settled up by 0.57% at 747.95 as fears that the omicron variant would derail economic growth receded and President Biden said the US will not go back to lockdown. In China, the copper inventory in the bonded zone dropped 2,200 mt to 171,700 mt from last Friday, marking the 11th consecutive week of decline.
A South African study confirmed again the omicron variant is less severe than previous strains, albeit more infectious. Higher supplies and softer demand are expected to cool copper prices next year after a dizzying climb to record highs this year, but the metal’s central role in the energy transition will keep sentiment positive. Expectations of slower demand growth in China and rising supplies from operations such as Anglo American (LON:AAL)’s Quellaveco mine in Peru are likely to keep prices subdued next year.
The macro front conveyed considerable bullish news today. The US consumer confidence index for December rose; the annualized US GDP growth in the third quarter was revised to 2.3% according to US Department of Commerce, slightly better than the estimate; the second-hand house sales for the third consecutive month in November; a study carried out by the Imperial Engineering, London showed that the hospitalization risks of omicron COVID variant were 40-50% lower than that of Delta, all of which supported copper prices.
Technically market is under fresh buying as the market has witnessed a gain in open interest by 19.11% to settled at 3734 while prices up 4.25 rupees, now Copper is getting support at 742.4 and below same could see a test of 736.7 levels, and resistance is now likely to be seen at 751.4, a move above could see prices testing 754.7.
Trading Ideas:
# Copper trading range for the day is 736.7-754.7.
# Copper prices rose as fears that the omicron variant would derail economic growth receded and President Biden said the US will not go back to lockdown.
# However, the spreading COVID variants kept the market participants on edge, and they were again worrying about the progress of economic recovery.
# In China, the copper inventory in the bonded zone dropped 2,200 mt to 171,700 mt from last Friday, marking the 11th consecutive week of decline.