Copper yesterday settled down -1.21% at 403.80 giving up it's all earlier gains on hopes the Fed will maintain its bond purchases for longer and after data showed that profit growth at Chinese industrial companies accelerated in May. Pressure mounted as short-term liquidity risks remain and China's economic growth missed forecasts, causing the Shanghai Index to close down for seven consecutive days and hit a 4-1/2-year low. The US revised down 1Q GDP growth, easing concerns that the US Fed will wind down monetary stimulus soon. Rebound in consumer spending in May and decline in initial jobless claims last week suggest the US economy is on track to modest growth. Several Fed officials' remarks helped ease market worries, pushing US and European stocks up. Copper remained weak as some investors closed positions ahead of mid-year liquidity crunch. Initial jobless claims in the US in the week ending June 22 fell to 346,000. Personal income and spending in the US in May both grew more than expected, pushing the US dollar index above 83. However, William Dudley said investors had overreacted to Bernanke's speech, claiming that the Fed will not taper off debt-buying program until US economy recovers as the FOMC expects and that there is still a long way to go before the Fed hikes interest rate. Their remarks helped appease market concerns, pushing the US dollar index and US 10-year government bond yields down while helping S&P's 500 Index record the biggest three-day gain since January. In China, the stance of the PBOC over the past couple of days helped alleviate worries over liquidity crunch. Market is getting support at 401.70 and below same could see a test of 399.60 level, resistance is now likely to be seen at 407.60, a move above could see prices testing 411.40.

Trading Ideas:

Copper trading range for the day is 399.7-411.5.

Copper ended with losses as oversupply concerns weighed on prices despite worries over China's credit crunch eased.

Copper is expected to remain under pressure from slowing growth in China and expectations of a bigger global surplus.

The market was supported by talk of output disruptions, but now producers are ramping up supplies at a time when there is excess supply.