Copper prices in the international market traded higher on Monday, with the LME copper prices recovering some losses, as market sentiment steadied amid ongoing geopolitical tensions in the Middle East due to the Israel-Iran war.
On the London Metal Exchange (LME), copper was up 0.34% at $9,677.5 per ton. Copper prices on the Shanghai Futures Exchange (SHFE) gained 0.19% to 78,550 yuan per metric ton.
On MCX, copper prices traded higher. MCX copper rate gained 0.19% to ₹877.60 per kg. Copper prices opened higher at ₹876.85 as against its previous close of ₹875.90.
LME copper prices gained, while SHFE copper prices recovered early losses despite cautiousness among investors due to the Middle East tensions and the release of a slew of economic data from China, the world’s largest consumer of copper.
Mixed economic data from China reinforced market caution, while escalating tensions between Israel and Iran further dampened investor sentiment, analysts said. China’s retail sales in May exceeded expectations, while industrial production came in below forecasts.
The ongoing conflict between Israel and Iran intensified over the weekend, with both countries targeting each other’s energy infrastructure. This has driven oil prices higher, amplifying inflationary pressures.
“Copper prices have been in a consolidation phase. However, bias for LME copper prices remains positive led by US-China trade tensions and lower inventories. Thus, investors can apply a ‘buy on dips’ strategy for copper,” said Ajay Kedia, Director, Kedia Advisory.
In light of these developments, the US Federal Reserve is expected to maintain a cautious stance, with markets widely anticipating that interest rates will be held steady at Wednesday’s policy meeting. Currently, investors see little to no chance of a rate cut in July.
On the technical front, the gold-copper ratio is at elevated levels, and is showing signs of easing, Kedia noted.
A drop in gold-copper ratio will further be supportive for the copper prices going ahead, he added. It indicates that copper may outperform gold.
Copper Price Outlook
According to Ajay Kedia, support for LME copper price is placed at its 200-Day Moving Average (DMA) of $9,375 level, while resistance is seen at $9,850 level.
“MCX copper prices may find support at ₹846 and resistance at ₹960 level. The trend may remain positive for copper prices,” Kedia said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
