Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 20 May 2013

Aluminium yesterday traded with the negative node and settled -0.2% down at 101.15 as the positive data from US zone helped send the US dollar index up to 84, weighing on commodity prices. Aluminum demand is strong despite record-high inventories of the metal, and will be further buoyed in coming years by increased usage in the automotive and aerospace industries, where it is winning ground over steel and copper in a bid to lightweight vehicles and products. The University of Michigan preliminary index of consumer sentiment rose to 83.7 in May, a six-year high. Meanwhile, the Conference Board Leading Economic Index for the US also increased 0.6% in April, a five-year high. News reports that China’s President Xi Jinping personally presided over the drafting of reform plan to boost the economy. The reform plan will avoid new stimulus policies due to concerns over the deterioration of local government debt and real estate prices rallies. Disappointing economic data announced earlier caused some investment banks to cut the 2013 GDP estimate in the world’s second largest economy. Last Friday, China’s stock market closed up 1.38%, the highest since late March, helping support metals prices. The National Bureau of Statistics announced Saturday that housing prices in over 95% of medium and large cities rose in April MoM, resulting from rising land prices. In yesterday's trading session aluminium has touched the low of 101.05 after opening at 101.4, and finally settled at 101.15. For today's session market is looking to take support at 101, a break below could see a test of 100.9 and where as resistance is now likely to be seen at 101.4, a move above could see prices testing 101.6.