On Monday, Brent crude settled a bit lower although the price of the front-month futures contract (ICE) was seen as high as at 112.3 USD per barrel level in intraday trading. The rally ended after the release of the US ISM manufacturing index. After two consecutive months of expansion, the index unexpectedly fell back into contraction. In November, the manufacturing ISM fell from 51.7 to 49.5, while only a marginal drop in the headline index was expected (to 51.4).
Aluminium outperformed the rest of the base metals complex on Monday and thus extended previous gains. The price of the metal was evaluated at 2120 USD per ton (USD/t), i.e. just shy below resistance at 2125 USD/t (see the chart).
In our view, the recent gains could have been hardly driven by the fundamentals which remain rather weak. We do not exclude further increase in the price of the metal in sessions ahead, but our outlook for the first half of the next year remains negative. We expect the average price of aluminium (3M) to return below 2000 USD/t in 2012H1.
The price of gold fell in five out of seven most recent sessions and yesterday closed at 1715 USD per troy ounce (USD/toz) level. Recent appreciation of the rupee along with fall in the price of gold spurred, according to dealers quoted by Reuters, some buying in India.
Today in early trading, gold is seen at 1705 USD/toz. Technically, the next support is at 1700 USD/toz.