Copper Edges Higher on China’s Upbeat PPI and Goldman Sachs Forecasts

Copper futures opened higher on Monday, jumping by nearly 1.2% compared to the last close before paring some gains to trade around 1.26670. The rally in early Asian trading hours was spurred by last week’s strong Chinese economic figures and latest market outlook by Goldman Sachs which pointed to a more “bullish” environment for the metal next year.

According to the National Bureau of Statistics, producer prices in China, the world’s top metals consumer, rose to its highest level in five years in November in the wake of rising industrial commodities. China’s producer price inflation advanced 1.2% on a monthly basis and 3.3% year on year last month, the fastest pace since late 2011. Upbeat readings for other areas such as the United States and Europe also contributed to copper’s demand outlook.

In a note dated on Sunday, Goldman Sachs stated that “The improvement in demand growth was much stronger than we had anticipated and appears likely to absorb much of the ‘wall of supply’ that we had expected would drive prices lower during 2H16 and early 2017,”. Therefore, the supply-demand balances for the commodity may become more bullish at least to mid-2017.

The investment bank forecast a copper deficit of around 180,000 tons for 2017, contrasting to earlier estimates of a 360,000-tonne supply surplus. The metal’s price for the next three months, six months, and 12 months were also anticipated higher to $5,800, $6,200 and $5,600 a tonne, respectively from $5,000, $4,800 and $4,800.

copper

Fig: COPPER H4 Technical Chart

Copper seemed to have broken out of the 38.2% resistance at 2.6660 but the metal failed to sustain its bullish strength. The price action has been moving in a shrinking range formed by higher lows and lower highs. The prices reversed lower after hitting the upper boundary and are about to face a couple of moving averages. The short-term MA20 is expected to be a solid support that will sends the price higher.

Trade suggestion

Buy Limit at 2.6600, Take profit at 2.6800, Stop loss at 2.6500

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

5 Comments

commenter

Can An Empath And Narcissist Work

December 12, 2016  /  Reply

Informative post, this is. It is always nice to come across a post that is useful.

http://diceview.com/10-stages-of-a-relationship-between-an-empath-and-a-narcissist/

commenter

10 Tips On How To Avoid Marriage Relationship Problems

December 12, 2016  /  Reply

I have read through your article and i was satisfied of the good information that you have contributed in your article! Thanks a lot for that beneficial article!

http://diceview.com/10-tips-on-how-to-avoid-marriage-relationship-problems/

commenter

Basic Dating Tips

December 12, 2016  /  Reply

I was studying some of your articles on this internet site and I think this website is real informative ! Keep posting.

http://diceview.com/10-top-tips-on-love-and-dating-advice/

commenter

10 Levels Of Intimacy In Relationships

December 12, 2016  /  Reply

I love anything & everything that is written well… yeah you got some good content going on there for sure.

http://diceview.com/10-stages-of-intimacy-in-a-relationship/

commenter

3 Things Not To Talk About On A First Date

December 12, 2016  /  Reply

I am really satisfied with this posting that you have given us. This is really nice work done by you. Thank you and looking for more posts.

http://diceview.com/15-things-you-should-never-say-to-a-man-on-the-first-date/

Leave a Reply

Your email address will not be published. Required fields are marked *