Reflecting the rally in gold prices, the base metals have surged in recent weeks on the back of reasons responsible for the rise in gold and oil prices.
The base metals prices including those of copper, aluminium, lead, zinc and nickel have risen in recent days as the value of greenback subsided and the industrial demand rose. Chicago-based MF Global recently raised the medium-term support – the lowest price possible – and the resistance – the highest price possible – for all the base metals traded at commodities exchanges.
"Base metals prices extend edits rally with dollar falling to a 14-month low," MF Global said. The dollar has fallen in recent weeks even as companies posted a rise in earnings and the rate of joblessness reduced in the US.
MF Global raised both the support and resistance levels for copper. While the agency raised the support prices for the metal to $5,810 (Dh2,128) a tonne, it enhanced the resistance to $6,550 a tonne. "A close above $6,350 [a tonne] will turn the chart very constructive and may take price higher towards $6,550 [a tonne],'' said analysts at MF Global.
Besides copper, MF Global raised the support and resistance levels for aluminium, lead, zinc and nickel. The agency raised the support level for aluminium to $1,790 a tonne from $ 1,740 a tonne. It raised the resistance level for aluminium to $1,980 a tonne from $ 1,950 a tonne.
The highest rise was perhaps reported for nickel in the case of which support level was raised by $3,000 a tonne. Resistance level for the metal was raised from $18,130 a tonne to $19,000 and tonne. "As against expectations nickel price has broken above resistance at $18,130 and is up to a key resistance level at $19,500. Would have to see a sustained close above $19,500 that for the uptrend to continue," MF Global said.
Lead and Zinc reported similar rise in prices. The support level of lead was raised to $2,100 a tonne from $2,000 a tonne. Resistance for the heavy has been raised to $2,415 a tonne. The support level for zinc was raised to $1,900 a tonne from $1,810 a tonne and the resistance level was raised to $2,100 a tonne. "With price closing above $ 1,950 a tonne, the chart has made a strong breakout making way (for a resistance price of) $2,100 a tonne.
The report of a buoyancy in the base metals markets comes as oil and gold the two heavily correlated drivers of commodities markets have risen significantly. Gold remain perched at $1,050 an ounce after having touched a historic high. Oil rose 0.84 per cent yesterday to $72.29 a barrel.
