SHANGHAI, Sept. 7 (SMM) –The weaker-than-expected second-quarter GDP was announced overnight in the Euro-zone area, causing the euro to escalate its declines. In this context, investors were worried the European debt crisis would worsen and became skeptical about the EU leader’s capabilities in solving the deteriorating debt crisis, and panic sentiment propelled them to buy in US dollar for safe-haven, helping the US dollar index extend the gains and reach a high 76 points. However, stock markets in Europe and the US all closed down, and LME copper prices were also pressured downward. Meanwhile, some short investors opened new positions following copper price declines, forcing LME copper prices to fall down below USD 9,000/mt and test the support at USD 8,900/mt. But LME copper prices regained support and rallied slightly at the tail of trading, with prices closing at USD 8,950/mt, nearly flat with the previous trading day.
The US ISM Non-manufacturing Index announced on the prior day evening was better than expected, but will have a limited impact on LME copper prices. The US dollar index will edge down after meeting resistance at 76 points following a strong close on the previous trading day, while the euro will fluctuate weakly due to the European debt woes. Comex copper prices tended to rally this morning, but short investor’s strength and the resistance at the moving averages can not be neglected. In this context, LME copper prices are expected to move between USD 8,930 -9,030/mt. Chinese stock markets will remain weak. SHFE copper prices will open slightly higher, and then the long and short investors will struggle at RMB 67,000/mt, and SHFE 1111 copper contract prices will move in the RMB 66,700 -67,700/mt range.