Weekly Outlook on Copper - 01 December 2023

Copper prices saw a modest 0.33% gain, reaching 722 on Thursday, as worries about a slowdown in Chinese manufacturing loomed large. The November's NBS Manufacturing PMI slipped to 49.4, the second consecutive monthly decline, heightened concerns, emphasizing the need for additional government support to fortify China's economic growth. The NBS Non-Manufacturing PMI at 50.2, reflecting the 11th month of service sector expansion, hinted at a softer pace.

The Composite PMI Output Index at 50.4, its lowest since December 2022, signaled a factory activity contraction for the second straight month. The challenges highlighted in the Chinese economy, coupled with a persistent struggle to maintain a robust post-pandemic recovery, raised expectations for further government stimulus. China has implemented measures such as increased bond sales for infrastructure investment and interest rate cuts to support economic activity. On the supply front, Chile reported a 4.4% YoY decline in copper output for October, reaching 464,311 metric tons, according to the INE statistics agency.

Technically, On the COMEX division, copper prices held a 0.70% gain on Friday, signaling a bullish momentum after a falling wedge pattern breakout on the weekly chart. The ascent above the 200 weeks SMA adds weight to the positive outlook. Immediate support is at $3.72, while resistance levels stand at $3.98 and $4.02.

Meanwhile, MCX Copper prices traded flat, hovering above a Symmetrical Triangle pattern but below the 200-days SMA. With an RSI reading above 60 and prices above the Ichimoku Cloud, a bullish setup for the long term is indicated. Support lies around Rs.715 and 709, with resistance likely at Rs.732 and 738. Traders are advised to stay vigilant about developments in China's copper imports, labor strikes, and potential supply disruptions for insights into future price movements.

Hence, traders are advised to focus on OPEC meeting and U.S. PMI data along with the technical levels as these numbers could have a notable impact on the oil prices. 

Important Key Levels:

​