Copper prices jumped to Rs 694.15 per kg on April 8 as participants increased their long positions as seen by the open interest. The base metal traded in the green in the evening session after a gap-up start tracking the positive global trend.
The non-ferrous metal has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on the daily chart. The Relative Strength Index (RSI) is at 60.15 which indicates bullish momentum in prices.
Industrial metals have been trading firm over the last few session with gains across the board. Weakening US dollar and anticipation of rising metal demand from the US after its recent proposal of infrastructure plans supported the price sentiments.
Investor interest in copper has waned, with the net long position in LME copper down to 22 percent of open interest from 62 percent at the end of February.
Copper inventories in LME approved warehouses surged to 150,325 tonnes compared with 74,200 tonnes at the end of February. Stocks have also jumped at ShFE warehouses which may cap the upside.
The Yangshan copper premium is at its lowest at $54/tonne since November, indicating to weakening demand for imports into China. The premium reflects the amount buyers are willing to pay above LME copper price for physical delivery.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX April Copper is trading with positive bias since morning and prices are sustaining above 50-SMA. On the upside, intraday resistance is at Rs 693-696 levels which when breached with adequate volume would lead to price s to test psychological levels of Rs 700 in the upcoming sessions.
The US dollar declined to 92.11, down 0.39 percent in the evening session against the rival currencies.
MCX METLDEX increased 141 points, or 0.98 percent, at 14,498 at 19:29. The index tracks the real-time performance of key base metals.
In the futures market, copper for April delivery touched an intraday high of Rs 696.40 and a low of Rs 691 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 657.85 and a high of Rs 732.70.
Copper delivery for April jumped Rs 4.80, or 0.70 percent, to Rs 694.15 per kg at 19:30 hours with a business turnover of 3,253 lots. The same for May contract gained Rs 4.50, or 0.65 percent to Rs 694.50 per kg with a turnover of 243 lots.
The value of April and May’s contracts traded so far is Rs 1,291.87 crore and Rs 28.98 crore, respectively.
MCX Copper is likely to trade with positive bias for the session with supports placed at Rs 691-687 whereas resistance is at Rs 699-703, said Motilal Oswal. The brokerage firm advised its clients to buy near support for the day.
Geojit Financial Services Limited said, “Sentiments stay positive and could stretch gains. However, such moves may find resistance near Rs 697. Inability to clear the same may call for profit booking.”
At 1406 (GMT), the red metal price was up 0.55 percent, quoting at $8,981 per tonne in London.
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