Aluminium settled up 0.91% at 110.75 finished higher on demand hopes after European car sales rose for the ninth consecutive month in May and as China’s Premier Li Keqiang said he is confident that China will meet its economic growth target of 7.5% this year. Three-month aluminum on the London Metal Exchange opened at USD 1,850.5/mt on Wednesday before rising to USD 1,878/mt as the US Federal Reserve stayed the course on rates. The light metal closed the day up USD 18/mt at USD 1,878/mt. The US Federal Reserve kept its benchmark interest rate unchanged at 0-0.25% and curtailed bond purchases to USD 35 billion per month from USD 45 billion at the mid-day interest rate meeting, which dovetailed with market expectations. The US Fed indicated that US inflation is expected to rise to the 2.0% target with a rebound in the country’s economic growth and improving labor market. However, the Fed unexpectedly cut its outlook for US 2014 economic growth from 2.8%-3.0% to 2.1%-2.3% and announced to maintain a low interest rate in the long run, weighing down the US dollar. Moreover, the Chinese Premier Li Keqiang stated during a visit to Britain that the central government would ensure a GDP growth at or above 7.5% this year to create sufficient jobs, while keeping CPI below 3.5%. Data from the NBS showed that prices for new residential real estate in only 15 cities among 70 major medium and large cities rose in May, the smallest number since May 2012. Technically market is under fresh buying and getting support at 109.5 and below same could see a test of 108.2 level, And resistance is now likely to be seen at 111.7, a move above could see prices testing 112.6.

Trading Ideas:

Aluminium trading range for the day is 108.2-112.6.

Aluminium gains as support seen after China’s Premier said he is confident that China will meet its economic growth target of 7.5% this year.

The market will continue to absorb positive effects from Premier Li’s statement and the Fed’s interest rate decision

Aluminium daily stocks at Shanghai exchange came down by 5546 tonnes.