Aluminium On MCX Settled Down -0.99%

Aluminium on MCX settled down -0.99% at 120.25 while other basemetals rose on Wednesday in response to a retreat in the U.S. dollar from its recent peaks. Aluminium prices dropped tracking weakness from LME Aluminium bucked the rising trend in metals, ending down 1 percent at $1,867.

Traders exited there long position after the news that China will launch a crackdown to curb illegal expansion of aluminium capacity in the world's top producer of the metal, the China Non-Ferrous Metals Industry Association said on Wednesday. While still expectation as high that prices will get supported by continued concern about a crackdown by the Chinese government on illegal and polluting smelters.

Prices were in positive territory during most of the last month session but edged back after data was released showing that overall aluminium output rose slightly last month both in top producer China and in the rest of the world. Yesterday dollar dipped versus a currency basket after touching a five-week peak on Tuesday, with a slump in oil prices to seven-month lows calling into question the impact of inflation on the pace of future interest rate hikes.

A weaker dollar makes dollar-priced metals cheaper for non-US investors. Market players will focus on US Unemployment Claims data due later in the day after the dollar failed to capitalize on upbeat housing data, as the National Association of Realtors said strong demand and inexpensive mortgages were driving up prices at an unsustainable rate, as sales of existing homes. Now technically market is getting support at 119.7 and below same could see a test of 119.1 level, And resistance is now likely to be seen at 121.3, a move above could see prices testing 122.3.

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Suhani Verma

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