MCX Copper Tarnished By Sharp Sell Off

MCX Copper declined on account of heavy sell off that crushed prices towards three week lows. Volumes increased sharply higher as the traders took short positions after the key supports got broken.

(prHWY.com) February 20, 2013 - Indore, India -- MCX Copper declined on account of heavy sell off that crushed prices towards three week lows. Volumes increased sharply higher as the traders took short positions after the key supports got broken. Throughout last week the prices bounced from its supports of Rs 442 per kg. The breach of that level last night brought heavy correction as the domestic prices tested a low of Rs 436.7 per kg. Volumes of Copper increased to 110280 kg on 19 Feb against 76490 kg a day before. LME Copper tried to recover from the days low and ended at $ 8105 per tonne, down $ 6. The prices are again down by 0.25% at $ 8084 per tonne on Wednesday.

US Dollar declined on Tuesday after the weak numbers on home builder's confidence. The greenback settled at 1.3386 against the Euro, down 35 pips. Greenback is now seen trading at 1.3408 on early Asian trades. Indian Rupee was trading at 54.11, up marginally from 54.19 last night. US home builder confidence was down for the first time in ten months as per the report from National Association of Builders.

BHP Billiton in its half year ending report of 31 Dec 2012 has said that Copper supply growth in the very near term is expected to result in a more balanced market, despite numerous project delays and curtailments. The longer term outlook for the copper price will continue to be underpinned by operating and capital cost pressure associated with rising strip ratios and grade decline at existing operations and a scarcity of advanced, high quality development opportunities.

The global economy is expected to strengthen over the next 12 months, providing support for commodities demand and pricing. The longer term outlook remains robust, although supply is now better placed to keep pace with demand for some commodities.

MCX Copper closed at Rs 437.3 per kg, down 1.1%. The most active contract is likely to find resistances at Rs 440 per kg. Supports for the contract are at Rs 435-434 per kg. The markets are panicking after the hearsay's that China can introduce fresh set of measures to cool down its property market in the country.

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