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Copper Has Retraced Some of its Move Up in Recent Days, Silver Lower after a Marginal Break of Key Resistance

  • Copper has retraced some of its move up in recent days
  • Silver lower after a marginal break of key resistance

COPPER Technicals

In our last note we commented on how the move up had some room to continue, as there was still some distance to be covered before the market reached the February 2017 highs.

This level of the February highs, around 2.82, has now been eclipsed and the move has continued to prices last seen in Q2 2015. The February 2017 highs could now be looked for as a potential support level in a move lower.

A second ascending trend-line shows how the most recent upswing has gathered pace, while the market has retraced some of its move up in recent days.

China data

Earlier this week the Caixin China manufacturing PMI, a private survey of China’s factory activity, rose to four-month high of 51.1 in July, from 50.4 in June. However, the country’s official manufacturing PMI fell to 51.4 in July from 51.7 in June.

In a release last Monday the IMF raised its 2017 growth forecast for China to 6.7%, a 0.1% increase from its April forecast. This comes after the previous week’s Q2 GDP print, which beat expectations with growth at 6.9%.

Warehouse data

LME copper stocks recorded a net outflow for a third consecutive week, ending with inventory levels down 3% for the week ending 28 July from the close of the previous week.

SILVER Technicals

The market has traded lower after a marginal break above the key resistance of the June 29th high around 16.90. A move higher than this level will show a higher high after the market has put in a series of lower highs and lower lows in recent months and could potentially indicate a change in the trend.

In a move down, support might be found around the June 21 low near 16.34, while below that the 8 May comes in at around 16.05

Silver Coin Sales

American Eagle 1oz silver coin sales in July rose to 2,270,000 ounces from 986,000 ounces in June and up from 1,370,000 ounces sold in July 2016, according to data released by the US mint. This data suggests that investment demand in the form of physical bullion coins has recovered from the low levels seen in June 2017 and is also higher than during the same period in 2016.

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