Reuters reported that London and Shanghai copper prices hit their highest in nearly 7 weeks cheered by news that China is seeking more effective policies to ensure stable economic growth.
Concerns about the budget talks in Washington were temporarily shelved as risk appetite returned spearheaded by Shanghai shares that had rallied nearly 3% in their biggest 1 day rise since the end of September.
Xi Jinping chief of state television quoted Chinese Communist Party said that China will make policies more targeted and effective in 2013 to help with the economic recovery. Risk appetite is back. Some stop loss buying helped fuel the rise in copper. The general sentiment is that the US fiscal problems will probably just be kicked down the road, and we may even see a short term rally."
Traders said that the USD 8,100 level is seen as a key resistance on copper's ascent. Talks to avoid the US fiscal cliff USD 600 worth of tax hikes and spending to take effect early next year, remained at a stalemate, although Republican lawmakers unity against President Mr Barack Obama's stance on higher tax rates for the wealthiest Americans showed signs of strain.
Three month copper on the London Metal Exchange rose to USD 8,074.75 per tonne its highest since October 19th 2012 before easing to USD 8,055 by 0704 GMT. The most-traded March copper contract on the Shanghai Futures Exchange gained more than 1 percent to a near 7 week high of CNY 57,970 earlier in the day and closed at CNY 57,760.
Technical analysis suggested that LME copper will form a top at around USD 8,046 while Shanghai copper's gains are limited at CNY 58,480.
