London, Aug 21 (Reuters) – Aluminum prices retreated on Wednesday as investors booked profits from an eight-session rally and technical resistance capped gains.
Losses in the most traded three-month contract for aluminum on the London Metal Exchange narrowed in the afternoon as the US dollar fell to its lowest since December, supporting greenback-priced metals.
Aluminum was down 1% at $2,478 per metric ton as of 1600 GMT, after falling as much as 2% to $2,452.50 earlier.
The dollar came under pressure after US employers added far fewer jobs than originally reported in the year through March, raising concerns over the health of the labor market as a first rate cut was expected in September.
Eyes are on Federal Reserve chair Jerome Powell’s scheduled comments this Friday for clues on easing interest rates, which could bring down costs of holding metals, Ole Hansen, head of commodity strategy at Saxo Bank said.
Funds are repositioning as aluminum prices edge away from the $2,500 technical barrier, Hansen added.
In terms of fundamentals, raw material supplies remained tight for aluminium, as the rainy season disrupted bauxite shipments from Guinea. Ex-China production cuts also lowered global supplies.
Copper ticked up 0.4% to $9,236 a ton, with further gains capped by a five-year-high stockpile in warehouses monitored by the LME. An increase in metals inventory is viewed by the market as a sign of weak consumption.
Among other metals, lead climbed 1.5% to $2,085, after touching a three-week high of $2,089.50 following a drop in LME inventory in Asia. Lead stocks had shrunk by 21% to 185,500 metric tons since the start of August.
Zinc increased 1.4% to $2,843.5, while tin gained 1.3% to $32,598 and nickel lost 1.1% to $16,850. (Reporting by Julian Luk; Editing by Emelia Sithole-Matarise, Barbara Lewis, Shounak Dasgupta and Rod Nickel)
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