Nickel settled down -1.15% at 865.1 after data showing slowing expansion in China's nonmanufacturing sectors renewed worries about demand. Pressure seen tracking drop in LME nickel prices which opened at USD 14,000/mt, with the high end of the price range USD 14,000/mt, and finding support at USD 13,800/mt. Finally, LME nickel prices closed at USD 13,870/mt, down USD 125/mt from the previous trading day. Last Friday, LME base metals prices weakened across the board due to the lack of positive news. The US Federal Reserve (Fed) officials statements caused market expectations that the Fed will scale back QE3 to grow. The US dollar index rose most significantly in nine weeks, standing above the 300 moving average. The arson at China's consulate general in San Francisco and heavy snow in northeast US also stimulate investors to purchase the US dollar as safe haven, and causing selloffs of high risk assets. As a result, LME nickel prices closed the day down USD 125/mt. While Bernanke said the U. S. economy should continue to improve in 2014, but reiterated that monetary policy will remain "highly accommodative" for as long as needed. However, the broadly stronger U. S. dollar held gold's gains in check. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was last up 0.40% to 81.04. Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies. Now Nickel is getting support at 860.8 and below same could see a test of 856.4 level, And resistance is now likely to be seen at 872.3, a move above could see prices testing 879.4.

Trading Ideas:

Nickel trading range for the day is 856.4-879.4.

Nickel ended lower after data showing slowing expansion in China's nonmanufacturing sectors renewed worries about demand

Ben Bernanke said the US economy may grow fasters and the president of Philadelphia Fed warned about upside risk for interest rate

In China, the December PMI in non-manufacturing sectors dropped to a four-month low of 54.6.