By Shyamal Mehta, Commodity Online
Base metals prices are trading at 12-14 weeks high and likely to continue their upward rally on economic optimism.
Base metals continued their rally on Friday despite weak US GDP growth slowed in second quarter rose at a rate of 2.5% which was below market expectation of 2.5% increase against a previous quarter growth of 3.7%. Copper is very much closely linked with growth prospects due to its mainly used in industry and construction.
Weak China’s manufacturing and US GDP data shows sell signal for base metals but investors are diverting their eyes to China, the world’s largest raw materials consumer who is a driver of base metals prices and likely to continue its lead for the coming years. We can see 3-5 % more upside in base metal prices in the next few weeks.
Nowadays, base metal complex is rising on chart-based buying and taking cues from global equity and currency markets.
Aluminium went up by approximately four percent in last week on the back of short covering. Aluminium prices are likely to test 110 rupees per kg by the end of Dec this year.
MCX Aug Copper future prices extend gains up by 1.4 percent after touching a 14 week high of 343. Copper may test 360 levels again in the next few weeks. Possible monetary tightening measures in China is being eased because of strong global equity markets and so Chinese demand of base metals may pick up.
Nickel prices also went up with other base metals on firm demand from stainless steel industries. Nickel prices last traded at 997.8 per kg up by 19 rupees from previous close of 978.8.
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