The most-traded July copper contract on the Shanghai Futures Exchange rose 0.8 percent to 46,060 yuan ($7,422.09) a tonne on Wednesday after weak US data revived concern about global economic growth, although expectations of policy support in China and the United States cushioned losses. ShFE nickel closed at its upward limit of 5 percent, boosted as shorts rushed to cover, while tin rallied 3.8 percent, both supporting LME prices.
A widening US trade deficit may help breathe new life into commodities prices because it will temper any drive by the Federal Reserve to raise interest rates soon, keeping pressure on the dollar, said Jonathan Barratt, Chief Investment Officer at Sydney's Ayers Alliance. "We have certainly turned the corner on the US dollar and commodities are looking better bid. The US trade deficit will add some more flavour to supporting commodities - a weaker dollar improves that, too," he added. "Copper is becoming very overbought at these levels and a softer spread, continuing increases in LME warehouse stocks and a quiet demand picture still represent headwinds," said broker Triland in a note, referring to the easing spread between cash and benchmark LME prices.
Comments
Comments are closed.