We expect MCX Aluminium prices to trade higher in the near term.
Last week, precious metals prices remained lacklustre ahead of ECB and Fed economic policy.
Comex Gold prices traded down 0.2 percent last week while Comex Silver prices closed higher by 0.8 percent. Base metal complex witnessed some relief rally after the US-China showed positive signs towards a compromise on trade policy.
All the metals prices traded positive with 1 percent gains except Nickel which lost =2 percent after LME inventories rose by 6 percent in a single day. Energy complex remained mixed last week.
Aluminium prices have remained almost unchanged since the start of the year. This subdued performance was in relation to poor auto sales and weak Chinese economy. Chinese aluminium production has remained flat but due to the shutdown of outdated capacity, the market deficit will widen to 1 million tonne.
Shanghai aluminium prices are behaving relatively strongly as compared to the LME prices. Declining LME stocks currently below 1 million tonnes will also be acting as a supporting factor. Indonesia is also planning of expediting an export ban on bauxite, the raw material used to produce aluminium.
Next week’s, Fed dovish monetary easing may provide further support to the aluminium prices. We expect MCX Aluminium prices to trade higher towards Rs 147-150/kg in the near term. Currently, prices are trading at Rs 138/kg.
The author is Commodity Analyst at Narnolia Financial Advisors Ltd.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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