Base metals traded lower since morning on MCX due to firming up of Dollar against Euro and other major currencies ahead of US Federal Reserve meeting later in the day. The FOMC’s interest rate decision is due at 18:15 GMT. Almost all the metals ended in green on Monday except Aluminium. But, gains were limited because of FOMC meeting later tonight.
In the last few weeks, metal prices climbed sharply as global economy health fears seen easing out.
Metal prices are closely related with economic indicators due to its wide use in manufacturing, construction and other industrial applications.
Base metals are likely to consolidate with upward bias for the remaining days of this week. Analysts are expecting that Dollar likely to remain weak and fall in inventories on LME may boost base metals to rise further.
Base metals traded higher since last few weeks due to strong demand and tight supply. Base metals are seen trading sideways with upward bias for the next couple of weeks because of fall in inventories and China’s announcement to shutdown of outdated capacity at metal plants. Inspite of weaker economic data like weaker US payroll numbers on Friday, some indicators showed good metal demand.
Nickel touched multi week highs of 1055.7 on Monday. MCX Nickel future prices have gained by 16 percent in the last 18 days. Support for the metal is seen at 1020 below it prices can test 990 levels. While resistance levels are 1045 and 1070.
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