Home Forex News Copper Extends Gains On Supportive Economic Cues

Copper Extends Gains On Supportive Economic Cues

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COMEX Copper soared to fresh seven year high of $3.50 per pound on upbeat global manufacturing outlook yesterday. The Institute for Supply Management or ISM said its US manufacturing PMI dropped to 57.5 in November from 59.3 in October, with a reading above 50 indicating growth in the manufacturing sector. China’s manufacturing sector logged its strongest growth in a decade in November to indicate a sustained recovery from the Covid-19 outbreak, survey data from IHS Markit showed. The Caixin manufacturing PMI rose to 54.9 in November from 53.6 in October. This was the highest score since November 2010. Eurozone final factory PMI fell to 53.8 in November from 54.8 in October, data from IHS Markit showed Tuesday. Manufacturing sector expanded for the fifth successive month in November despite new lockdown measures.

On a broad note, global economic cues were supportive too as the Organization for Economic Cooperation and Development (OECD) said it expects the global economy to contract 4.2% this year. That reflects an upward revision from an estimate made in September that pointed to a 4.5% fall in real GDP. Looking ahead, the group said worldwide economic growth would average 4% over the next two years. It expects real GDP growth to hit 4.2% in 2021 — trimmed from a September forecast of 5% — and 3.7% in 2022.

Copper prices hit their highest since 2013 on Tuesday

Copper prices hit their highest since 2013 on Tuesday as data showed manufacturing expanding rapidly in Europe, the United States and Asia in November, and coronavirus vaccines turned investors increasingly bullish about the economic outlook. Factory activity in China, the biggest metals user, accelerated at the fastest pace in a decade. Copper has recovered from a low of $4,371 hit in March and has surged by around $1,000 just in the past four weeks as governments pumped money into markets and speculators bought into the rally. Canadian miner Lundin Mining Corp said its 2021 copper production would increase 25% to between 275,000 tonnes and 299,000 tonnes and its zinc output would also rise.

TREND : BULLISH

Time                                      :        02/12/2020

Pivot                                     :      3.4520

Technical View                     :        LONG ABOVE 3.4719

Target                                   :        3.4919, 3.5252, 3.5574

Technical View                      :       SHORT BELOW 3.4372

Target                                   :        3.4224, 3.3912, 3.3569

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