Copper yesterday traded with the positive node and settled 0.66% up at 414.7 as better-than-expected U.S. retail sales and encouraging French and German economic growth data offset concerns about the health of the broader euro-zone region. Gains though were tempered by strength in the U.S. dollar as signs of an tentative improvement in the U.S. economy reduced expectations the Federal Reserve could soon launch a third round of bond buying, or quantitative easing, to help the world's largest economy. Even after Tuesday's data, investors hope the central bank will renew bond purchases for a third round of quantitative easing to support the economy. China is also expected to step up its response to slowing growth after two rounds of interest rate cuts. Stimulus could come in the form of more infrastructure projects, which are seen raising demand for base metals and energy. Chile, the world's top copper producer, lowered its 2012 average copper price outlook to $3.52 per pound from a previous estimate of $3.85, and sees prices slipping to $3.48 next year. Copper prices have shed 12 percent since the beginning of May on mounting fears of deteriorating economic outlooks in top metals consumer China, the euro zone and the United States. Some investors have hoped to see the Federal Reserve prop up the economy with more easy money this summer after a stream of weak data raised concerns about U.S. growth. In yesterday's trading session copper has touched the low of 410.65 after opening at 412.1, and finally settled at 414.7. For today's session market is looking to take support at 411.7, a break below could see a test of 408.6 and where as resistance is now likely to be seen at 416.8, a move above could see prices testing 418.8.
Trading Ideas:
Copper trading range for the day is 408.6-418.8.
Copper gains after release of better-than-expected U.S. retail sales and encouraging German data
Chile lowered its 2012 average copper price outlook to $3.52 per pound from a previous estimate of $3.85
Refined copper output of China dropped 6.8% in July from the record high production of previous month
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