Copper dumping again after the Bank holiday weekend

Tuesday, 7th May 2019 09:45 - by Rajan Dhall

Copper prices are once again under pressure as the US-China deal is rocked once again by US president Trump. Over the bank holiday weekend, Donald Trump released a series of tweets throwing the deal into doubt. One of the tweets also stated that the US may even add more tariffs on Chinese imports as soon as Friday. 

Copper futures contracts traded lower in Asia while our markets were closed, now the spot contract has fallen again today after the latest LME figures showed another increase to 230.075k a rise of 1,800 tonnes. 

Below is the daily candle chart for spot copper, you can see the price rose yesterday as China announced another 280 bln Yuan stimulus package and also cut the RRR ratio for small and medium-sized banks in another effort to boost the economy, but once again today copper sold off after the aforementioned LME inventory data was released. Regardless of how good the news and data was leading into the trade deal between China and the US $3 per pound could not be broken so this is the key resistance level for me. Now some bad news has hit the market $2.73/lb was tested and rejected. These support levels have the ability to be tested again but $2.53 looks to be the range low at the moment and if the deal gets more complicated or even called off I think that's the least we could expect from a sell-off. The share prices from the likes of Anglo American and Kaz Minerals are also selling off now and this means any holders should keep a close eye on macro news flow for some positive news from China and the US. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.