2024-01-19 11:56:41
Copper prices rose in London on Friday as technical factors and lower available stocks supported the recovery from the previous session’s six-week low, although gains are likely to be limited by cautious trading at the approach of the Chinese New Year.
Three-month copper on the London Metal Exchange (LME) rose 0.6% to $8,359 per metric tonne by 1129 GMT, heading for a 0.2% weekly gain to end three weeks of declines . It hit $8,245 on Thursday, its lowest level since December 6.
“In the immediate term, risk markets and some of our metals are showing technical signs of oversold with short-term buy signals,” said Al Munro of broker Marex, adding that gains may not be sustained at during the next sessions.
Copper stocks on hold in LME-registered warehouses fell to a four-month low following further cancellations, daily LME data showed.
“Official exchange stocks are much lighter than historically in similar bearish macro situations across the majority of the complex,” Munro said.
On the technical side, copper faces resistance from the 200-day and 50-day moving averages at $8,373 and $8,402 respectively, while the 100-day moving average supports it at $8,288.
In China, the main consumer of metals, Beijing has asked heavily indebted local governments to delay or stop some state-funded infrastructure projects, according to sources, as the country struggles to contain debt risks while trying to stimulate the economy.
“People are starting to anticipate financial stimulus (from China) which will support (metals) prices,” said one trader.
Meanwhile, the dollar is heading for a second weekly gain, making dollar metals more expensive for buyers using other currencies.
In other metals, LME aluminum rose 0.1% to $2,166.5 a tonne following hitting its lowest level since Dec. 14 at $2,159.5. Zinc rose 0.2% to $2,467.5, lead rose 0.6% to $2,089.5 and nickel rose 0.5% to $16,235.
Tin rose 0.9% to $25,575 following hitting its highest level since Dec. 28 at $25,665. (Reporting by Polina Devitt in London, additional reporting by Mai Nguyen in Hanoi, editing by David Goodman)
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