Gold Silver Reports – Aluminium on MCX settled down -2.3% at 103.95 held around 4-week lows on Tuesday after a weaker dollar and renewed jitters about Chinese economic growth tarnished demand for commodities.
The dollar has held near its highest this month, after Federal Reserve officials expressed support for two rate hikes this year, despite a run of softer data. A stronger dollar makes commodities more expensive for buyers paying with other currencies.
LME aluminium ended down 2.3 percent to $1,561 a tonne as China’s exports and imports fell more than expected in April, underlining weak demand at home and abroad. Meanwhile from data side the United States added the fewest number of jobs in seven months in April, with the employment slowdown coming against the backdrop of weak economic growth, subdued productivity and corporate profits.
The news prompted some financial institutions to lower interest rate expectations for this year to a single increase rather than two. But that was offset by New York Fed President William Dudley saying it is reasonable to expect the U.S. central bank will raise rates twice in 2016. Dudley’s comments were partly responsible for a rise in the U.S. currency, which serves to make dollar-denominated commodities more expensive for non-U.S. firms.
In the week ahead, investors will continue to focus on U.S. economic reports to gauge if the world’s largest economy is strong enough to withstand further rate hikes in 2016, with Friday’s retail sales data in the spotlight. In addition, there are more than a half-dozen Fed speakers on tap as traders search for more clues on the timing of the next U.S. rate hike. Technically now Aluminium is getting support at 104 and below same could see a test of 102 level, and resistance is now likely to be seen at 106, a move above could see prices testing 107. – Neal Bhai Reports