Copper yesterday settled up 0.66% at 403.45 rallied sharply bouncing off the lowest level after China's central bank sought to reassure investors that liquidity would be kept at an appropriate level to support growth. Copper prices fell by as much as -1.9% earlier in the session to hit a daily low of 393.30, amid growing fears over a cash crunch in the Chinese financial system. But prices recovered after Ling Tao, a deputy director of the Shanghai branch of the People's Bank of China, said that the central bank will guide interest rates to a "reasonable range". Tao also said that interbank liquidity overall is abundant and risk is largely under control. The central bank will continue to closely monitor liquidity changes and will make an effort to stabilize market expectations, he added. China is the world's largest copper consumer, accounting for almost 40% of world consumption last year. Copper found additional support after Federal Reserve officials played down fears over an imminent end to the central bank's stimulus program. Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, said the central bank was committed to continuing its bond purchase program until the US unemployment rate falls further. Dallas Fed President Richard Fisher also downplayed market jitters over tapering as overdone. Prices of the industrial metal have been under heavy selling pressure in recent sessions as a combination of concerns over a deepening slowdown in China and fears over an end to the Federal Reserve's asset purchase program weighed. Technically market is getting support at 395.50 and below same could see a test of 387.50 level, And resistance is now likely to be seen at 409.10, a move above could see prices testing 414.80.
Copper trading range for the day is 387.6-414.9.
Copper gained after China's central bank sought to reassure investors that liquidity would be kept at an appropriate level to support growth.
Copper found additional support after Fed officials played down fears over an imminent end to the central bank's stimulus program
Copper earlier seen under pressure on worries that China's central bank was engineering a tightening of cash in a bid to rein in excessive credit growth