Base Metals Could Slide on Strong Dollar

NEW YORK (TheStreet) -- Base metals Thursday were trading marginally higher as inventories pushed down the metal complex. But positive economic data may strengthen the dollar leading base metals to trade lower. On Wednesday, base metals ended with modest losses as they were weighed down by the strengthening dollar index. Major economic data releases lined up for Thursday include initial jobless claims for the week ended Aug. 14. Jobless claims are estimated to come in at 478,000 as compared to 484,000 recorded in the previous week. The U.S. leading indicators for July are forecasted to swing to positive 0.1% as compared to negative 0.2% recorded in June. Copper Copper for three-month delivery gained 0.9% to $7,458 on the London Metal Exchange as declining stockpiles reflect a stronger demand for the metal. LME copper inventories were down 1,725 tonnes to 403,300 tonnes Wednesday. The metal faces support at $7,339 and resistance at $7,550. The biggest smelter of copper, China, has decided to shut down plants that violate environmental rules subsequent to the government's tightened regulations. Meanwhile, the latest figures by the World Bureau of Metal Statistics reveal that the copper market was in deficit of 80,000 tons in the first half of the year as compared to 160,000 tons deficit a year ago. However, during the first five months of 2010, the metal was at a surplus of 73,000 tons. Southern Copper SCCO, which closed at $30.05 in the previous trading session, finds support at $29.86 and resistance at $30.43. Meanwhile, Freeport-McMoRan Copper & Gold FCX closed at $73.22 with support and resistance at $72.22 and $74.03, respectively. Teck Resources TCK closed at $35 with support at $34.38 and resistance at $35.43. To read the rest, head over to TheStreet.com