New Delhi, July 5
After experiencing a significant bullish run, approaching the psychological threshold of $10,000, the copper price is poised to rally to Rs 980-Rs 1,020 per kg on the domestic front and $10,800- $11,000 per metric tonne on the London Metal Exchange (LME) in the near term, a report said on Saturday.
Favourable conditions, including a balance between surplus projections and persistent demand concerns, a decline in the US dollar, and expectations around rate cuts, are leading the upward trend path ahead for copper, according to the report by Motilal Oswal Financial Services.
“The US Dollar Index has retreated significantly, to its lowest level in three years, as Treasury yields have moderated and expectations for rate cuts and lower growth expectations. The combination of a softer dollar and rising risk appetite among investors is creating an environment favourable for further price appreciation," the report stated.
There is a shortage of Copper stocks, and this is causing strong backwardation in futures prices. The LME cash–3M spread has widened past $100, which shows a shortage of copper for immediate delivery.
"Commodity trading advisors and systematic funds have reversed their bets as stronger demand and lower inventories have made them rethink the positions," said Navneet Damani, Group Senior VP–Commodity Research, Motilal Oswal Financial Services.