Copper was little changed on Wednesday after rising for four straight days as investors avoided entering big positions ahead of the conclusion of FOMCs two-day policy meeting later today. The industrial metal drew support by a drop in output in Indonesia, while industrial production in Japan rose by the most in nine months.
Comex copper for delivery in December traded at $3.0915 per pound at 09:58 GMT, down 0.05%, having shifted between a two-week high of $3.0995 and $3.0780 during the day. The industrial metal gained 0.95% on Tuesday to $3.0930, the highest since mid-September, which was its fourth straight daily gain.
A government official said on Tuesday that Indonesias Grasberg copper mine, one of the worlds largest, is running at two-thirds of capacity due to a strike, while a union leader said the workers had been suspended.
A Freeport-McMoRan Inc. union official said on Monday that workers at the Grasberg mine will hold a one-month strike, starting November 6th, due to management issues related to a fatal accident.
Meanwhile, workers at the biggest copper mine in Peru, Antamina, which is owned by BHP Billiton, Glencore Xstrata, Mitsubishi and Teck, will walk out indefinitely as of November 10th, Reuters reported on Friday. This would bring offline a total capacity of 30 000 tons per month.
The metal also drew support on the demand side after industrial profits in China rose by an annualized 0.4% in September, partially offsetting a 0.6% decline in August.
On Wednesday, preliminary data by Japan’s Ministry of Economy, Trade and Industry showed that the Asian country’s industrial production expanded by a better-than-expected 2.7% in September on a monthly basis, reversing a 1.9% contraction in August. This was the fastest pace of industry output growth since January.
The metal also drew support by upbeat consumer confidence in the US, which rose to a seven-year high in October, and by a weaker dollar.
The greenback slid after US durable goods orders unexpectedly slid in September, while a separate report showed that house prices in 20 US cities rose less than expected both on monthly and annual basis, giving the Fed more room for monetary easing as inflation remains moderate.
The US dollar index for settlement in December traded at 85.480 at 9:56 GMT, up 0.01%, moving within the range of 85.515 and 85.390 during the day. The US currency gauge slid 0.1% on Tuesday to 85.473.
Investors across the globe awaited the conclusion of FOMC’s seventh meeting this year, broadly expected to bring Fed’s unprecedented bond-buying program to an end. However, policy makers have previously stressed out that they are in no hurry to begin raising interest rates as a strong dollar and weaker global economic growth posed risks to the US economy’s recovery. Market players will focus on FOMC’s after-meeting statement for clues of an interest rate hike timetable, as well as the Federal Reserve’s opinion regarding the global economy’s state.
Pivot points
According to Binary Tribune’s daily analysis, December copper’s central pivot point on the Comex stands $3.0815. If the contract breaks its first resistance level at $3.1075, next barrier will be at $3.1220. In case the second key resistance is broken, the industrial metal may attempt to advance to $3.1480.
If the contract manages to breach the first key support at $3.0670, it may come to test $3.0410. With this second key support broken, movement to the downside may extend to $3.0670.
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