Copper hit by profit-taking

Copper is in the red today as traders lock in their gains after two days of advances.

Copper is trading at 296 cents per pound, down 1.3% on the day, as trader close out their long positions after the advances made over the past two trading sessions.

Last week copper dropped to its lowest level in 44 months, partially due to weak manufacturing figures from China. In recent days there has been speculation that the People’s Bank of China will inject cash into the domestic banking system to make it easier for banks to lend to each other and so it will trickle down to businesses. China is the largest importer of copper in the world, accounting for 40% of global copper imports.

The Chinese central bank has not announced a stimulus package yet, but if they were to do so we could see copper head towards the recent highs of 301 cents per pound. At the moment the 200-hour moving average is providing support at 295 cents per pound.

High grade copper chart

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