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Copper is up 4% since the beginning of the month and it traded above 319 cents per pound at the start of the week, but has now drifted below the 315 cents per pound level as traders take their profits.
The last HSBC manufacturing report for came in at a five-month high; the official manufacturing report from Beijing is due out on Sunday, and the consensus is for an increase in May to 50.7.
As Alastair McCaig stated, there is growing speculation that the People’s Bank of China will introduce a stimulus package in the coming weeks. China is the largest importer of copper in the world, so confirmation of the stimulus package could drive the metal above the 320 cents per pound mark, which it has struggled with recently. The metal has found support at the 100-day moving average of 310 cents per pound.