12 February 2016


Base Metals: Copper rose on Thursday as the dollar slipped, but fears for global growth sparked by worries about a potential financial crisis and uncertainty about demand in China curbed gains. Comments from the U.S. Federal Reserve's chairwoman, Janet Yellen, that tighter credit markets, volatile financial markets and uncertainty over Chinese economic growth have raised risks for the U.S. economy also undermined confidence. A lower U.S. currency makes dollar-denominated commodities cheaper for non-U.S. firms, a relationship used by funds to generate buy and sell signals using numerical models. China is the world's largest consumer of copper, accounting for nearly 50 percent of global copper demand estimates at 22 million tonnes this year. Traders said the absence of China in metals markets this week due to the Lunar New Year holiday meant lower volumes and liquidity and higher volatility. Goldman Sachs has cut its 3- and 6-month nickel price forecasts to $8,500 a tonne from $10,000 and the 12-month forecast to $8,500 from $11,000.
OUTLOOK: The above hourly chart of Nickel suggests that prices are making lower highs and lows. It is expected to recover till 545.50 levels. On the downside, immediate support is located at 520 levels.
Call: Buy around 528.40 levels with a stop loss placed below 520 levels for targets of 545.50 levels.

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