Commodity Radar: Copper prices cool off after Monday’s sharp rally. Time to buy on dips for 16% potential gains, says Religare expert
Copper prices fell sharply on Tuesday following a strong Monday rally amid profit taking by the investors. The MCX October copper futures fell 2.4% to hit a low of Rs 979 per kilogram, taking cues from international prices which saw deeper cuts.
The copper contracts were trading at Rs 991.35 per kg, down 1.2% around 2 pm while those on COMEX were 3.1% lower around $4.98.
Expectations of copper shortages due to supply disruptions in Indonesia, Chile and the Democratic Republic of Congo, prospects of U.S. interest rate cuts and a weaker dollar helped propel prices to a 16-month high at $11,000 a ton last week in the international market, Reuters reported.
Commenting on the current trends, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that global supply shocks are driving copper prices up, especially after production issues at major mines like Codelco (Chile) and Grasberg (Indonesia).
“Inventories on major exchanges are falling, making the market more sensitive to disruptions. The transition to green energy, rapid EV adoption, and infrastructure upgrades are boosting copper demand. China’s recent output contraction is reducing supply while demand remains resilient. Copper’s long-term supply deficit forecasts and persistent geopolitical tensions are keeping the bias upward. Fund flows are increasingly bullish, with institutional long positions rising globally,” Mishra said.
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Technical view
Decoding the daily charts, Mishra said that the MCX copper is showing strong bullish momentum, highlighted by the sharp rally from around Rs 860 per kg to a recent high of Rs 1,026 per kg. “Technical indicators remain bullish with moving average crossovers and a high RSI suggesting the trend is overbought but strong. Any dip towards support zones may be treated as a fresh buying opportunity, but profit booking near resistance levels is advisable in the short term. Momentum and supply concerns favor a buy-on-dips strategy while monitoring volatility,” Mishra said.
He sees immediate resistance near Rs 1,030, and a sustained move above this could open the way to Rs 1,080 and Rs 1,150.
Major support is at Rs 950 and then Rs 920.
Copper Daily chart
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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