Copper
Copper prices traded weak at Rs 655.60 per kg on March 25 tracking a negative global trend and a firm dollar.
The non-ferrous metal has been trading higher than 50, 100 and 200 days’ moving averages but lower than 20 and 5 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 42.88 which indicates bearish momentum in prices.
Base metal prices have been pressurised by worries related to extended lockdown in Europe amid signs of the third wave in the region along with potential tax hikes in the US and an increase in US-China tensions.
The LME net speculative long was at 33 percent of open interest compared to a multi-year high of 62 percent touched last month.
Copper Inventories at LME accredited warehouses have jumped to 129,950 tonnes, the highest since December, compared to 74,000 tonnes on February 3. This has eased concerns over supply availability.
According to the International Copper Study Group (ICSG), the global refined copper market was in a 589,000-tonne deficit in the first 11 months of 2020 compared with a 427,000-tonne deficit in the same period a year earlier.
Neha Qureshi, Technical Research Analyst at Reliance Securities said, “LME Copper has given a breakdown of Rising Channel formation and is trading below 21-Daily Moving Average which is placed at $ 9,018 levels including for Bearish trend to continue up to $ 8,690-$ 8,555 levels. Resistance is at $ 8900-$ 9020 levels.”
“MCX Copper April is trading on a negative note below Rs 665 levels indicating further downside fall up to Rs 659-655 levels. Resistance is at Rs 667-681 levels.” She advised her clients to sell April Copper at Rs 665 with a stop loss of Rs 668 and for a target of Rs 659.
The US dollar jumped to 92.59 or up 0.06 percent in the evening session against the rival currencies on safe-haven appeal.
MCX METLDEX dropped 91 points, or 0.66 percent, at 13,666 at 16:43. The index tracks the real-time performance of key base metals.
In the futures market, copper for March delivery touched an intraday high of Rs 661.90 and a low of Rs 652 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 585.70 and a high of Rs 737.
Copper delivery for March slipped Rs 7.85, or 1.18 percent, to Rs 655.25 per kg at 16:45 hours with a business turnover of 614 lots. The same for April contract fell Rs 6.80, or 1.02 percent to Rs 661.95 per kg with a turnover of 3,221 lots.
The value of March and April’s contracts traded so far is Rs 88.45 crore and Rs 1,052.42 crore, respectively.
MCX Copper is expected to trade in a bearish trend with resistance at Rs 667 level and intermediate resistance at Rs 664 level, said Motilal Oswal. The brokerage firm advised its clients to sell on rallies targeting lower support at Rs 659-656 zone.
At 1139 (GMT), the red metal price inched lower 1.19 percent, quoting at $ 8,781.75 per tonne in London.
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