Fresh Round Of Selling In Copper Prices Break Supports - Dec 18, 2008

Fresh bout of selling has been witnessed in today's Copper trades. Fresh levels of supports were broken by Copper on MCX today and further shrinking from here looks probable. On one hand Dollar is trading at two month lows against the EURO and on the other hand inventory position has been all the more worrisome for the demand in coming days. Prices tend to move in opposite direction of Dollar. MCX Copper is at Rs 146.20 per kg currently as against Rs 149.90 per kg on 17th Dec 2008.

Expectations were for the prices to move towards 145 levels and Copper has already registered a low of 145.65. From the current levels prices can move towards 142 and 140 levels. Resistances for the contract are at 147.30 levels.

Supports for Copper have been coming from the selling in Dollar against the EURO which tends to make the commodities attractive. Traders have continued to punish the greenback following unprecedented rate cut by the FOMC to lower its key interest rate to a target range of 0 to 0.25%. The dollar plunged to a fresh 13-year low against the yen of 87.16 last night. Yen is currently quoting at 88.08. Dollar is at 1.4444 against the EURO.

Inventory pile up has continued in LME warehouses where stocks have so far reached 321900 tonnes with gains of 3275 tonnes last night. LME Copper three month forwards were at $ 3041 per tonne last night.

Earlier in the month Chinese production data of Copper showed a rise of 12% in November on an M-o-M basis. On a Y-o-Y basis production still fell short by 2.3 percent from year ago amid a swift slowdown in industrial output from China to its slowest pace in at least nine years in November.