Aluminium prices surge to highest level since 2011 because of US Sanctions. The restriction has impacted the world’s second largest aluminium producer from Russia. United company Rusal also known as Rusal produces high quantity of aluminium year or year basis, the sanctions on Rusal has potential to affect large chunk of aluminium supply. This event has caused panic among aluminium investors and speculators – influenced them to buy large quantity of base metal in anticipation of shortage. Have a look at the Daily chart of Aluminium Price action.
Aluminium Price Action Analysis in Daily chart
During the Period of March, Prices broke the support zone resting at 135.80 – 136.60, Aluminium prices were trading with a bearish bias and market conditions were pretty normal. Even the breakout had slightly a bearish momentum. But the new event completely changed the scenario upside down! This is a good example of how fundamental events can override technicals.
Aluminium prices rose sharply after US Sanctions hit Rusal, world’s second largest aluminium producer. Volatility increased and Price action rallied heavily from 130 – 158 within less than 2 weeks. That’s almost 35% increase in the metal’s value. Geopolitics is once again taking the driver seat in Base metals, now onwards price movements will be influenced by Geopolitical game. Traders should watch the price action and keep an eye on geopolitical events related to US – Russia.
