Commodity Radar: Copper charts display solid buildup of longs. Buy on dips for up to 4% near-term gains

Domestic copper prices jumped 1.6% intraday to hit the day’s high of Rs 1,334.70 on Tuesday, taking cues from international red metal prices that hit a fresh record high after concerns over supply surfaced following fresh mine disruptions.

The strike at Capstone Copper’s Mantoverde copper and gold mine in northern Chile fuelled the supply concerns, Reuters reported. Moreover, China’s Tongling Nonferrous Metals Group on Sunday reported a delay in the launch of its Ecuadorian mine’s second phase.

The three-month LME copper contracts were trading around 12,991, up 4.19%, while those on the COMEX hovered around $6.0820, up 1.78%.

Copper prices have been making fresh records on a consistent basis, rallying over 60% in the past one year.

Commenting on copper’s stellar performance, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that copper continues to be the hot commodity for investors, just like gold and silver.

The MCX January futures are down from an all-time high of Rs 1,392.
“Increasing concerns that the Trump administration could introduce new tariffs on refined metals, hence divert shipments into the US. This indicates emerging short supplies at the major trading hubs such as London and Shanghai. The market is currently supported also by the robust global demand outlook, particularly from power grid upgrades, renewable energy projects, and data centre expansion,” Mishra said.“Last but not the least, a high possibility of the US Federal Reserve delivering further interest rate cuts this year has reinforced risk-on sentiment across financial markets,” he added.

Technically, the weekly charts indicate a solid buildup of longs, Mishra said, though he does not rule out a short-term pullback possibility. In his view, the medium-term trend remains positive.

For this month, the market appears to have established a base around the Rs 1,200–1,225 region.

Mishra recommends a buy-on-dips strategy near the support region of Rs 1,300–1,305 with a strict stop loss below Rs 1,248 and a target price of Rs 1,365–1,375. It is important to note that a decisive close below 1,250–1,248 can push prices towards the Rs 1,200–1,210 level.

Also read: Commodity Radar: US-Venezuela tensions lift gold, but charts signal consolidation. Buy or sell?

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)