The base metals pack gained on Wednesday, maintaining their northwards journey since the last two weeks. Base metal prices took cues from the positive sentiments in the financial markets coupled with positive economic data from US, the world’s largest economy. However, metal prices were off their intra-highs after the DX strengthened in the evening session. The DX closed at 80.98 against a basket of currencies on Wednesday.
Copper prices touched a 4-month high of $7520/tonne on the LME stage yesterday, but later closed at $7460/tonne towards the end of the session. The strength in the DX capped further gains in the red metal prices. Copper inventories declined by 125 tonnes to reach 413,950 tonnes on Wednesday. However, this positive sentiment was faded away by a simultaneous decline in cancelled warrants- the metal booked for removal from the LME warehouse. Cancelled warrants decline by 1200 tonnes on Wednesday.
Nickel prices rose on the LME stage on Wednesday day after hitting an intra-day low of $21,375/tonne to close at $21,700/tonne. Nickel inventories declined by 288 tonnes to reach 117,870 tonnes yesterday.
Aluminum prices gained on LME yesterday, hitting an intra-day high of $224/tonne, the highest since May 4 before closing at $2230/tonne. Aluminum gained on LME yesterday despite of increase in the inventory level. This was the second consecutive increase in LME aluminium inventories.
OUTLOOK
On the macro-economic front, the US authorities are expected to announce economic data on unemployment claims and natural gas storage today. Economic data yesterday was a relief after constant poor economic updates from the world’s largest economy increased concerns amongst the investors.
Base metal prices will take cues from the sentiments in the financial markets coupled with the movement in the DX today. Financial markets are expected to trade with a positive bias today and this factor will lead to lower demand for the DX. The weakness in the DX will be a major supportive factor for base metal prices.
Copper
Copper prices will trade with a positive bias today with immediate support for MCX August contract seen at Rs.341.50 Further below; crucial support is seen at 338.00 levels.
Whereas resistance is seen at Rs. 348.00 levels & further upwards at Rs. 350.50 levels.
Zinc
Zinc prices will also trade with a positive bias today with immediate support seen at Rs.95.30 level for MCX August contract whereas crucial support is seen at Rs.93.60 level. Short-term resistance is seen at Rs.98.40 whereas major resistance is seen at Rs 99.75 levels.
