SHANGHAI, Oct. 28 (SMM) –Markets Thursday continued to absorb the positive news that European leaders reached a deal to solve the region's debt crisis, while investor risk appetites were improving. In response, the US dollar index fell below 75 due to aggressive sell-offs, but crude oil and gold prices surged. Later, data released by the US Commerce Department revealed that the US preliminary Gross Domestic Product (GDP) increased at an annual rate of 2.5% in 3Q because of an increase in consumer and enterprise spendings, registering the biggest growth since 3Q 2010. The data also showed the US initial jobless claims fell continuously to 402,000 in the week ending October 22nd, easing investor concerns that the US economy was slipping into recession and helping US equity markets close 3% higher. As a result, LME copper prices advanced all the way and easily increased above USD 8,000/mt, which also triggered short-covering in this round of copper price gains. Finally, LME copper prices closed at a recent daily high of USD 8,194/mt, up nearly 6%, and an increase of more than 15% for the week and recouping the declines in more than one month.
As market sentiment gradually improves and worries over European debt crisis alleviate, the Euro will fluctuate at high levels, which will help LME copper prices maintain strong rising momentum. However, the US dollar will probably make technical corrections following significant declines on the prior day, restricting LME copper rising momentum. Therefore, LME copper prices are expected to move between USD 8,150 -8,280/mt during today's Asian trading hours. Chinese stock markets will challenge the resistance at the 60-day moving average of 2,500 points after opening higher. SHFE copper prices will move at high levels after a high open, then touch the shorts' stop-loss limit at RMB 60,000/mt, and have possibility to touch the upper trading limit, while SHFE 1201 copper contract prices will fluctuate in the RMB 60,000 -61,000/mt range.