The better-than-expected retail sales kept the trade hooked on hopes of a consumption uptick, notwithstanding China’s factory output growth hitting a six-month low in May.
The June copper futures rose 0.4% to touch the day’s high of Rs 881 per kg.
The three-month benchmark LME Copper was hovering around $9,703, gaining 0.60%. LME copper inventories dropped by another 7,300 tons to 107,325, data showed on Monday. That was the weakest level in more than a year and down 60% over the past four months.
The expectation that the U.S. US President Donald Trump will impose tariffs on copper, as he has on aluminium and steel, has boosted U.S. copper prices and spurred flows of metal to the U.S. from elsewhere to take advantage of the premium, Reuters reported.
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Meanwhile, the most-traded copper contract on the Shanghai Futures Exchange rose 0.5% to 78,700 yuan a ton. U.S. Comex copper futures climbed 0.4% to $4.83 per lb, bringing the Comex premium over LME copper to $949 a ton, down from $969 on Friday.Also supporting base metals was a weaker dollar, making dollar-priced commodities less expensive for buyers using other currencies.Commenting on the current fundamentals, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that copper prices have been strengthening recently, supported by a combination of strong Chinese retail sales data and growing geopolitical tensions in the Middle East, particularly involving Iran and Israel.
“The improved retail numbers from China, the world’s largest copper consumer, signal a potential rebound in demand, adding upward pressure to prices. At the same time, ongoing tensions in the Middle East raise concerns about possible supply disruptions, further fueling the rally,” he added.
Technical View
Decoding the technical charts, Mishra said that the copper price is currently trading above both its 50-period and 100-period moving averages in the hourly chart, which signals continued strength.
“We can see higher lows and higher highs developing, reflecting a strong uptrend. Immediate support is placed near Rs 875, with a further strong base at Rs 865–Rs 870, a range which previously acted as resistance and is now turning into support. On the upside, the first hurdle for copper lies at Rs 887. If prices break above this resistance, we may see a further rally,” the analyst said.
Copper outlook and trading strategy
Mishra said that the overall outlook for copper is positive as long as it maintains its grip above its key support levels, with a potential for additional gains if momentum sustains.
One can initiate a long position at Rs 873-Rs 875 levels for the target price of Rs 887 and Rs 895, keeping a stop loss of Rs 864.
Also Read – Commodity Radar: Gold faces caution ahead of Fed meet, but bullish trend intact. Key entry levels to watch
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
