COPPER NEWS UPDATED 22.08.2012:- LONDON: Copper marched to a one-month peak on Tuesday, testing the top of its recent range on optimism that the European Central Bank is drawing up a strategy to tackle the euro zone debt crisis, although some investors were wary about further gains.
The euro rallied to a seven-week high versus the dollar as talk of ECB action to ease Spanish and Italian borrowing costs resurfaced, even though the central bank tried to quash such speculation on Monday.
A strong euro makes dollar-priced copper cheaper for European investors. More gains in copper were likely to be limited by the intractable euro zone debt crisis, slower growth in top metal consumer China and a stuttering recovery in the United States, the world's largest economy, some analysts said.
"You've got hopes about the ECB again ... but the general trend hasn't changed much from July, we're still fairly rangebound," s aid Citi analyst David Wilson. "Markets are nervous about taking outright positions in either direction."
Three-month copper on the London Metal Exchange jumped 2.1 per cent to close at $7,610 per tonne after touching a session peak of $7,632, the highest since July 20. Copper dropped 1.1 per cent in the previous session.
The market tested the top of a range of $7,300 to $7,600 it has held over the past month. Analyst Edward Meir at INTL FCStone pegged key resistance at $7,620. "A two-day closing break above that mark would be significant," he said in a note.
Market volumes have been thin in recent weeks and Monday's open interest in copper fell to 229,844, its lowest since early 2007.
Markets took heart from coverage by British newspaper The Daily Telegraph, which said it could confirm weekend reports that ECB experts were examining plans to effectively cap Spanish and Italian yields, even if the bank has so far denied the speculation.
In China meanwhile, risk assets including copper received a modest boost after local media reported the Chinese city Chongqing was planning to invest $236 billion in seven major industries.
Import data from the world's top consumer, meanwhile, showed a marginal rise for July, with shipments of refined copper into China at 254,339 tonnes versus 250,097 tonnes in June.
"For now, with no clear trading direction, LME copper will be stuck within a range of $7,200-$7,800. But downside risks will increase over the longer term as Chinese consumer demand remains weak with no sign of improvement in global economics," said Andy Du, derivatives director at Orient Futures.
Chief Executive Ivan Glasenberg of Glencore saw potential for stronger demand in China towards the end of the year.
"I think we've got to watch China carefully to see what type of stimulus they will or won't put into place... personally I believe you will see more infrastructure spending in the second half," he told a conference call after the commodity trade house released interim results. (Neal Bhai 9999974733)
The euro rallied to a seven-week high versus the dollar as talk of ECB action to ease Spanish and Italian borrowing costs resurfaced, even though the central bank tried to quash such speculation on Monday.
A strong euro makes dollar-priced copper cheaper for European investors. More gains in copper were likely to be limited by the intractable euro zone debt crisis, slower growth in top metal consumer China and a stuttering recovery in the United States, the world's largest economy, some analysts said.
"You've got hopes about the ECB again ... but the general trend hasn't changed much from July, we're still fairly rangebound," s aid Citi analyst David Wilson. "Markets are nervous about taking outright positions in either direction."
Three-month copper on the London Metal Exchange jumped 2.1 per cent to close at $7,610 per tonne after touching a session peak of $7,632, the highest since July 20. Copper dropped 1.1 per cent in the previous session.
The market tested the top of a range of $7,300 to $7,600 it has held over the past month. Analyst Edward Meir at INTL FCStone pegged key resistance at $7,620. "A two-day closing break above that mark would be significant," he said in a note.
Market volumes have been thin in recent weeks and Monday's open interest in copper fell to 229,844, its lowest since early 2007.
Markets took heart from coverage by British newspaper The Daily Telegraph, which said it could confirm weekend reports that ECB experts were examining plans to effectively cap Spanish and Italian yields, even if the bank has so far denied the speculation.
In China meanwhile, risk assets including copper received a modest boost after local media reported the Chinese city Chongqing was planning to invest $236 billion in seven major industries.
Import data from the world's top consumer, meanwhile, showed a marginal rise for July, with shipments of refined copper into China at 254,339 tonnes versus 250,097 tonnes in June.
"For now, with no clear trading direction, LME copper will be stuck within a range of $7,200-$7,800. But downside risks will increase over the longer term as Chinese consumer demand remains weak with no sign of improvement in global economics," said Andy Du, derivatives director at Orient Futures.
Chief Executive Ivan Glasenberg of Glencore saw potential for stronger demand in China towards the end of the year.
"I think we've got to watch China carefully to see what type of stimulus they will or won't put into place... personally I believe you will see more infrastructure spending in the second half," he told a conference call after the commodity trade house released interim results. (Neal Bhai 9999974733)
No comments:
Post a Comment
If you have any doubts, Please let me know