Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 24 December 2013

Aluminium settled down -1.8% at 106.55 suffered losses on Monday due to poor market fundamentals, drawing no support from rising US shares and a weaker US dollar. While South Korea has bought a total of 6,000 tonnes of aluminium for June arrival via tenders closed on Monday, the state-run Public Procurement Service said. Meanwhile the US economic reports released overnight basically were positive, while the International Monetary Fund (IMF) raised the forecast for the US economic growth. As market confidence towards the US economy improved, the US shares rebounded to fresh highs, fueling confidence among longs in metals markets. Also the US consumer spending in November grew at the highest rate of 0.5% MoM since this June, above October's 0.3% and the estimated 0.4%. The price index for personal consumption expenditures improved from 0.7% to 0.9% YoY, while the US core personal consumption expenditures (PCE) maintained at 1.1% YoY. The final University of Michigan Consumer Sentiment Index for December settled at 82.5, while the current economic conditions jumped to 98.6, the highest level since July 2007. The US strong consumer sentiment was in line with the rise in consumer spending, which shored up the US growing economy. As a result, the IMF overnight raised growth prospect for the US economic growth in 2014, while the US shares also set fresh highs. Trading activity should slow down as the Christmas Day holiday draws near, while LME prices will lack impetus to rise further due to tight cash flows. Technically market is getting support at 105.9 and below same could see a test of 105.1 level, And resistance is now likely to be seen at 108, a move above could see prices testing 109.3.