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Nickel gains on weak dollar

  • Tuesday, November 2, 2010
  • Source:

  • Keywords:Nickel, ni
[Fellow]
Nickel prices rose in the beginning of the month due to demand supply gap and weak dollar as investors took no time dumping currency and switching their investments to riskier assets.
 
Afterwards, nickel remained weak as Chinese investors booked their profits at higher levels after returning from holidays. The downside rally continued due to recovery in dollar, overproduction by China supported by large inventories.
 
The prices will remain further under pressure due to recovery in dollar and on speculation that quantitative easing by US Fed may be less than expected. China's decision to raise production output of nickel in the coming year since it has more cost advantage than other regions may result in oversupply of the metal.
 
The weak global economic outlook, rising inventory, increasing output and declining demand from stainless steel industry may put downward pressure on prices. The report of Federal Reserve hurt market sentiments and raised concern over the pace of the global economic recovery. In addition, unlike all other base metals, nickel also witnessed some selling pressure at the end of the month.
 
Investors are eying upon the Fed meeting next month on the dimension of quantitative easing to boost US economy. The easing if more than expected, may support the prices. Nickel prices notched up decent gains in the beginning of the month and reached higher to test a level of INR 1120.7 per kilogram.
 
However, after testing the same, the metal has stayed firmly in grip of bear camp and has been marred down to test the crucial support of INR 1010 per kilogram. This pivot level can hold the metal from falling further and possibly lead to a recoup from lower levels.
 
On the contrary any breach of the same would have bearish implications, and pilot a descend in the metal towards INR 940920 kilogram mark
 
  • [Editor:editor]

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