Commodity Trading Tips for Aluminium by Kedia Commodity

Ajay Kumar Kedia 30 July 2013

Aluminium yesterday settled up 0.24% at 104.45 as support seen after the US National Association of Realtors announced Monday that pending home sales index fell 0.4% MoM to 110.9 in June, better than the forecasted 1% decline. However, markets are cautious ahead of the US Federal Reserve meeting due later this week. Market caution will leave aluminum prices moving in a narrow range. The market was cautious before the US Federal Reserve announces its interest rate decision. Annualized US pending home sales in June was 10.9%, lower than both expectations and May, while monthly rate dropped by 0.4%, compared to a growth of 6.7% in May. Dallas Fed's manufacturing index for July recorded 11.4, much lower than 17.1 expected, and this weighed down US stocks. The Shanghai Composite Index opened low and dropped below 2,000 as audit of local government debt was started, which triggered investor concerns that local debt problem will cause financial risks. China's tax income from January through June 2013 totaled RMB 5.926 trillion, up 7.9% YoY, but the growth is much slower than the 29.6% and 9.8% in 2011 and 2012, reflecting China' s sluggish economy in 1H this year. Declines in coal and non-ferrous metals industries were the largest. Due to tight liquidity at the end of the month, 7-day government bond repurchasing was quoted at 5%, with small banks aggressively receiving capital and large banks suspending loans, which weighed on domestic financial markets. Now Aluminium is getting support at 104.00 and below same could see a test of 103.50 level, And resistance is now likely to be seen at 104.70, a move above could see prices testing 104.90.