Aluminium prices rose to a 14-month high. Prices rose as other base metals rose due to pressure on the dollar, supply issues and Chinese demand.
Both PMI gauges in China surprised the March releases, suggesting that manufacturing activity in the country responded somewhat to a series of stimulus and economic support. measures by Beijing.
Prices were also supported by looming supply concerns, with the Aluminium Corp of China underscoring that the country’s bauxite security still remains uncertain due to its dependency on Guinea, which has been subject to disruptions following an explosion in a key fuel depository.
Additionally, smelters in Yunnan, China’s fourth-largest aluminium-producing region, remained subject to production curbs due to the annual dry season.
Adding to this, the rally was supported by a weaker dollar that fell to its lowest since March 21 after weekly U.S. jobless claims rose to a two-month high. A weaker U.S. currency makes dollar-priced metals cheaper for buyers holding other currencies.
Federal Reserve Chair Jerome Powell affirmed that his outlook on lowering interest rates this year remained unchanged and will continue to be guided by economic data.
But another Fed official said the first-rate cut would not come until the fourth quarter.
Meanwhile, euro zone inflation fell unexpectedly last month, solidifying the case for the European Central Bank to start lowering borrowing costs.
Technical Outlook – Aluminium:
Aluminium prices rose – will it continue Aluminium prices rose 1.87% intraday yesterday. After the start of the week, prices rose more than 6.50%, the biggest gain since January 2023.
Prices rose to 223.70 yesterday and reached 222.85.
The chart above showed a break of a long-term consolidation. Prices also formed a long bullish candlestick, both of which indicate strong buying activity. Furthermore, prices are trading well above the short-term moving average.
On the upside, massive resistance at 224.50 is above it, prices may test the next resistance at 228-230.00
On the other hand, there is major support at 218.00 below it. pullback to 214.50-211.00
However, after the recent sudden uptrend, prices may consolidate in the 218-223.50 range before the next uptrend. Hence, should wait for a fresh breakout.
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
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