Aluminium futures weaken on global cues

LME aluminium may seek a support in a zone of $1,611-$1,618 per tonne, before rising again. The zone has been formed by the 150 percent and the 161.8 percent Fibonacci projection levels of an uptrend from the Aug. 26 low of $1,525.50, based on the rise from the Aug. 24 low of $1,506 to the Aug. 25 high of $1,563.

A trendline from $1,525.50 will provide a support in the zone as well. The uptrend may extend to $1,686 eventually, as revealed by a Fibonacci retracement analysis on the fall from the May 6 high of $1,977 to of $1,506.

Amid weak global cues, aluminium prices in Indian market edged lower by 0.14 per cent to INR 107.90 per kg in futures trade yesterday after traders reduced their exposure. Besides, subdued demand in the domestic spot market weighed. At Multi Commodity Exchange (MCX), aluminium for delivery in current month eased 15 paise or 0.14 per cent to INR 107.90 per kg in a business turnover of 97 lots. Also, the metal for delivery in October contracts fell by a similar margin to trade at INR 108.95 per kg in seven lots.

Analysts said the weakness in aluminium at futures trade is mostly in line with a weak trend base metals at the London Metal Exchange (LME) and muted demand at domestic spot markets.

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