Copper prices closed 0.34% higher at 731.95, boosted by optimism over policy support in China, the world’s largest consumer of the metal. By drastically reducing bank reserves and adding almost $140 billion to the banking system.
The Chinese central bank demonstrated its strong support for the nation’s precarious economy. Positive market sentiment was also bolstered by news of a 2 trillion yuan stability fund that would be used to buy shares onshore via the Hong Kong exchange link.
However, mixed macroeconomic data from around the world limited the potential for additional price rallies. And the slowing growth in the physical consumption of nonferrous metals.
Notwithstanding these obstacles. Worries that the long-term supply of copper would fall short of its essential role in electrification kept prices supported. The global refined copper market deficit increased from 48,000 metric tonnes in October to 119,000 metric tonnes in November. According to the International Copper Study Group (ICSG).
In November, global consumption of refined copper reached 2.38 million metric tonnes, surpassing the output of 2.26 million metric tonnes.
Technically speaking, the market showed indications of new buying, as open interest increased by 2.18% to 4643 and the price increased by 2.45 rupees. Support for copper is at 728.1; a breach there might trigger a test of 724.2. Resistance on the upside is expect to be at 734.2. And a breakthrough there could open the door for testing 736.4.