The shorters may be rubbing their hands with glee now but it won't be long until they are burned...
From kitcometals.com
DJ Comex Copper Review: Down But Off Overnight Lows NEW YORK (Dow Jones)--Comex copper settled lower Monday at the New York Mercantile Exchange but did recover from a more than two-week low reached during overnight trade.
Most-active July copper settled at $3.4615, down 75 points on the day, after trading as low as $3.2760 per pound in after-hours trade.
Traders said the profit-taking mode remained a key factor in copper's lower close, but many believe the bullish uptrend remains intact despite the recent correction.
Traders at Triland Metals said copper was caught in a nervous two-way trade but the precious metals' ability to continue a rally off of lows and the decline of the U.S. dollar from its session highs encouraged support for copper.
Analysts from Barclays Capital in London said the stronger-than-expected U.S. Consumer Price Index reading from last week and expectations of further interest rate hikes was the main trigger for fund profit-taking in the industrial metals markets, taking Comex copper down 18.9% from its May 11 high of $4.04 to Monday's low of $3.2760.
"We believe this means that weak longs are now getting out helping to create a strong platform for the overall uptrend to re-establish yet again, once the current market nervousness settles," said the Barclays analysts.
They add that demand could deteriorate a great deal before harming the underlying fundamentals, characterized by low inventories and continued large risks to strong supply growth.
Settlements (ranges include overnight and day sessions): May (HGK06) $3.6400; down 0.30c; Range $3.5400-$3.6700 Jul (HGN06) $3.4615; down 0.75c; Range $3.2760-$3.5050
-By Alison Guerriere Ciaccio; Dow Jones Newswires; 201-938-5959; [email protected]
