Aluminium closed with a modest 0.07% increase at 204.95, driven by a rebound in aluminium stocks in LME-registered warehouses. However, the market faced pressure from hawkish comments by U.S. Federal Reserve Chair Jerome Powell, dispelling expectations of a peak in interest rates, coupled with rising exchange stocks. Powell and other Fed officials expressed uncertainty in tackling inflation and signalled readiness to tighten policy further if necessary. China's economic performance presented a mixed picture, with October seeing a slowdown in manufacturing and exports but unexpected growth in imports, including a 10-month high in copper imports.
Additionally, aluminium inventories in Shanghai Futures Exchange-monitored warehouses rose by 10% in a week. China's economic outlook faced challenges as domestic demand struggled, leading to deflation at the factory gate. Despite this, Chinese officials emphasized plans to open the economy, aiming to boost imports of commodities and services to nearly $17 trillion in the next five months.
Technically, the market underwent short covering with a -0.24% drop in open interest, settling at 2884. Aluminium prices increased by 0.15 rupees. Support for Aluminium is identified at 204.7, with a potential test of 204.5 if breached, while resistance is expected at 205.1, with a move above potentially testing 205.3.
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