Going short in Base Metals is a good option in current scenario

by Commodity Online

This week opened with extra caution for Base Metal traders as its prices traded at higher levels. But the tight situation is likely to loose its upside momentum and may fall on profit booking. Traders are advised to go short at higher levels with proper stop loss.

Base metals traded steady to higher on Friday of last week. However, on weekly basis, metals ended lower previous week. Metals rose from intraday low on Friday following strength in Global equity markets on the back of resignation by Egyptian president Hosni Mubarak.

The metal is likely to decide its direction in this week from economic indicators from US and China.

Copper last traded at LME was USD 10080 a tonne. While Lead and Nickel on LME traded at USD 2592 per tonne and USD 28630 per tonne respectively. At LME, Aluminium last traded at 2513 a tonne.

The U.S. Dollar went up recently which affected demand of dollar-denominated commodities adversely by making it more expensive for the other currency holders.

Metals are likely to continue cues from the USD and other major currencies movements and global equity markets.

China is the major consumer of metal and market is wanting strong demand from China to give a thrust to base metal and lift further.

China’s liquidity tightening move to curb inflation may adversely affect the metal’s demand while copper may affect severely as copper is a metal widely used in building construction, power generation and electronic products. If inflation rises further, the more tightening measures are likely from the China in the coming few months.

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