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Weekly Commodity: Aluminum outperformed other industrial metals

SMC | 21 May, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary


Market appeared nervous on what was happening in US and this also stimulated volatility in commodities counter. US President Donald Trump asked the FBI to end a probe into his former security adviser. However, tension in US created doubt over the implementation of Trump policies. Dollar index dipped down and bullion counter surged on safe haven buying. The dollar started the week on the defensive after U.S. economic data came in shy of expectations and another missile test by North Korea at the weekend underpinned the perceived safe-haven yen. Industrial metal prices, except aluminum and copper, dragged down for the same above mentioned reason. Aluminum outperformed other industrial metals. Higher demand in China, led by the country's growing car sales and better-than-expected construction activity, helped improve aluminum's demand environment. As China is restricting its output of the metal, aluminum prices are moving. The move is part of the country's Winter 2017 Air Quality Pollution Prevention Plan. As a part of the plan, producers in 28 cities are reducing their aluminum capacity and production by over 30 percent. Back at home, sharp depreciation in rupee, made commodities more volatile in Indian market. Gold prices reached to its resistance of $1260 in COMEX on weaker-than-expected economic data from the U.S. and a missile test by North Korea over the weekend pressured the dollar. Silver too traded near its resistance of $17.1. LME copper was trading with limited gain, after more evidence that China's economy encountered a soft patch in April. Crude oil prices bounced higher after oil ministers from Saudi Arabia and Russia said that the joint deal to cut crude production from the global market would be extended into next year. Natural gas prices saw some profit booking at higher levels after a three week upside. Nevertheless the overall weather forecast for the US is conducive to slightly stronger than normal natural gas use through the coming week.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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