Yesterday, metals had volatile movement with market participants could not decide which way to go, as some are waiting for Chinese monetary policy while on other side stronger euro supporting buying in base metals.
MCX Copper prices rose above 400 level and on London, above $8800, extending previous gains supported by Chinese buying amid firmer euro, discounting potential Chinese policy tightening. Other metals, nickel, aluminium, lead and zinc witnessed some sideways to negative movement.
Investors paused after last week's rally, reading caution into Federal Reserve chairman Ben Bernanke's tepid assessment of the U.S. economic recovery.
China's central bank may raise interest rates this weekend to enshrine its shift to a "prudent" monetary policy in the face of rising inflation, an official newspaper reported on Tuesday.
Workers at the world's No.3 copper mine agreed to end the longest-ever strike at a major private mine in the top producing country.
The short-term traders took cues from the fact that 80% of LME warehouses was with a single holder. UK based Telegraph reported that the American investment bank JP Morgan is the mystery trader that grabbed more than half the copper on the London Metal Exchange.
The news that JP Morgan is about to launch a physically backed Exchange-Traded Fund (ETF) and it has major portion of LME warehouse stocks increased the spot premiums for Copper.
Base Metals View: Base metals prices expected to trade with sideways to positive following weaker dollar against the euro. In metal complex, copper looks strong, where as in nickel and aluminium buying on dips is advisable. Selling is expected in lead and zinc from higher levels.
