SHANGHAI, Aug. 22 (SMM) –Last Friday, LME copper prices gained some buying force and reached a high USD 8,885/mt during the trading session, due to a weak US dollar, supply disruption problems in Chile and since investors became optimistic towards China copper demand in the second half of this year when Shanghai Futures Exchange copper inventory data showed its first decline in four weeks. However, as US equity markets slumped further due to cautious investment, LME copper prices narrowed the gains at the tail of trading, and finally closed at USD 8,810/mt, slightly up USD 50/mt. It's worth noticing that although LME copper prices closed higher last Friday, it was still the third consecutive week for the prices to decline. Meanwhile, a series of disappointing economic data in the US and European credit issues will continue to disturb investors over global economic recovery, which will propel them to rush to safe-haven such as gold, which has reached to a new high USD 1,878/oz.
During Monday's Asian trading hours, the US dollar index is expected to recover slightly from last Friday's losses, with support at the 5-day moving average. Both crude oil prices and copper prices on the Comex tended to fall in today's morning business, and gold prices moved towards USD 1,900/oz, both of which are negative for copper prices. Coupled with resistance at the 5 and 10-day moving averages, LME copper prices are expected to move between USD 8,730-8,850/mt during today's Asian trading hours. In domestic markets, Chinese stock markets will continue to open lower due to impacts from US stock markets. Therefore, SHFE three-month copper contract price trends will not be optimistic after the opening, while SHFE 1111 copper contract prices will move in the RMB 65,500-66,500/mt range.