The prices of copper were higher on Tuesday as funds trimmed their bets to the downside after China – the world’s top consumer of industrial metals – took steps to boost its housing and stock markets ahead of manufacturing data.
The reference copper in the London Metal Exchange (LME) it was up 0.9% at $8,428 a metric ton as of 1031 GMT.
China halved the stamp duty on stock trading, while the country’s exchanges have cut margin requirements.
Turning to the housing market, the Chinese central bank announced a series of guidelines to relax rules on residential home loans, in an effort to boost loan applications and home purchases.
Markets are awaiting the Purchasing Managers’ Surveys (PMI) from the Chinese manufacturing sector, one of the main drivers of demand for industrial metals, to be released on Thursday and Friday. Expectations point to a fifth month of contraction.
In the United States, data on Gross Domestic Product (GDP), inflation and non-farm payrolls, to be released later this week, are likely to provide clues about US interest rates and the direction of the dollar, one of the drivers in the short term of the prices of industrial metals.
A weaker US currency makes it cheaper raw Materials that are priced in dollars for holders of other currencies, which could boost demand, while a stronger dollar could dampen it. That relationship is used by funds to generate buy and sell signals from numerical trading models.
From a technical point of view, the copper is facing strong upside resistance at the 100-day moving average around $8,457.
Elsewhere, zinc prices hit a two-week high of US$2,448 a tonne on hopes of stronger demand from the construction sector for Chinawhich enters a seasonally strong period.
Prices for the metal used to galvanize steel later rose 2.5% to $2,443 a ton.
Among other industrial metals, aluminum was up 0.9% at $2,169, lead was flat at $2,161, tin was down 1.4% at $25,130 and nickel was down 0.3% at $20,735.
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
