Copper trading outlook: futures gain on China stimulus hopes, US data eyed

Copper rose on Monday, resisting a drop in oil prices to new multi-year lows, as downbeat figures from China last week raised hopes of additional stimulus measures and as data later today might show a rebound in US industrial production.

Comex copper for delivery in March rose by 0.31% to $2.9430 per pound by 9:46 GMT, having shifted in a daily range of $2.9470-$2.9220. The industrial metal rose 0.45% on Friday to $2.9340 a pound, settling the week 1% higher.

Copper held ground despite oil falling to new lows amid hopes that the Peoples Bank of China will introduce additional monetary stimulus measures after last weeks continued signs of economic slowdown. According to a report by the PBOC, cited by Reuters, Chinas economic expansion might slow to 7.1% next year from an expected 7.4% this year.

However, Chinas statistics bureau may revise up its 2013 and 2014 GDP estimates, which would allow Premier Li Keqiang to reach this years 7.5% growth objective. The National Bureau of Statistics third national economic census follows a year of interviews and data gathering from millions of businesses and, according to Bloomberg, may include an upward revision of 2013 GDP by 1% to 3%, while this years economic expansion may receive a boost of 0.1% to 0.3%.

Meanwhile, data later in the day may show that manufacturing activity in the New York region grew at a faster pace in December, while nationwide industrial production expanded by 0.7% in November, reversing a 0.1% contraction in October.

In other news, Rio Tinto and BHP Billiton received a green light for a $6-billion copper mine in Arizona after US Congress allowed them to swap land with the government.

The swap, which was first proposed nine years ago, was opposed by environmental and native American groups. The massive Resolution copper mine, which has already swallowed $1 billion in investments, will have a capacity of more than 1 billion pounds per year, ranking it first in North America and one of the biggest in the world. The project plan is yet to be approved by the government.

Meanwhile, workers at the Peruvian copper and zinc mine Antamina will start work today after ending a strike that began last Wednesday. The strike, the second in the last month, was prompted by demands for better working conditions and a greater profit share.

Pivot points

According to Binary Tribunes daily analysis, the March contracts central pivot point stands at $2.9277. If it breaks its first resistance level at $2.9468, next barrier will be at $2.9597. In case the second key resistance is broken, the industrial metal may attempt to advance to $2.9788.

If the contract manages to breach the S1 level at $2.9148, it will next see support at $2.8957. With this second key support broken, movement to the downside may extend to $2.8828.