After a quiet premarket on Wednesday that saw the dreaded June options expire, aluminium tumbled lower. The whole LME complex was lower on a lack of directional stock movements and a lack of news generally. Traders appeared to be taking their cue from falling equities indices, coming off on talk of inflation and interest rate hikes. As the light metal broke the 100- and 10-day moving averages prices dropped quickly in the am sessions from 2799 to 2755 and after a bounce from there to 2783 in the afternoon, they sank to 2748 in the aftermarket.
Nearby spreads were fractionally easier throughout, while forward backwardations softened by $0.50-$1.00/mth mostly, though Nov'07-Jan'08 fell from 19.00b to 8.00b. The WC report from the LME remained clear.
On Thursday morning prices again bottomed at 2748 before lifting to a high currently of 2774. Cliff Green Consultancy had pegged initial technical support c. 2740 and locals reported light fund buying interest at the week-old lows. A clear break below 2735 could trigger falls towards the 2660 area, the trading strategists warned. Last at 2763 on average turnover of 1,800 lots.
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