Bearish Momentum in Commodities Market Last Week, One Commodity Above Support Level – Aluminium

Global Commodity Market Wrap-Up

Last week, the metals market faced strong bearish momentum ahead of key macroeconomic updates, with both precious and base metals under pressure. Gold declined by 2.51% as demand for safe-haven assets weakened, while silver plunged 16.04%, reflecting heightened investor uncertainty. Base metals mirrored this trend—copper dropped 10.56%, lead fell 6.37%, and zinc slid 6.89%—as global economic concerns weighed on sentiment. The widespread losses across the sector underscore growing market caution, with geopolitical tensions and monetary policy uncertainty expected to drive further volatility in the near term.

Last week, natural gas prices declined by 5.61% amid supply constraints and easing seasonal demand. Crude oil posted a sharp drop of 10.63%, pressured by market uncertainty and shifting investor sentiment. In the agricultural space, U.S. sugar prices slipped 0.63%, aligning with a broader downtrend across soft commodities. These movements highlight the ongoing supply-demand imbalances and increased volatility across energy and agricultural markets. With global economic instability, supply disruptions, and changing consumption patterns, investors remain cautious, and similar fluctuations are likely to continue in the near term.

Global commodity prices retreated from recent resistance levels, driven by global economic and geopolitical factors. Precious metals are holding above key support zones, suggesting potential for a bullish reversal if favorable conditions emerge. In the energy space, natural gas remains highly volatile within a wide trading range, while crude oil shows signs of weakening after testing resistance. Agricultural commodities are stabilizing near recent lows, supported by industry-specific factors. The current market landscape reflects a blend of resilience and uncertainty, prompting investors to remain cautious as they navigate shifting dynamics and assess emerging risks and opportunities.

The upcoming Micro and Macroeconomic events that may impact on market sentiments include an update Consumer Credit, Crude Oil Inventories, FOMC Meeting Minutes, Core CPI and PPI.

Having understood the global commodities’ performance over the past week, taking cues from major global economic events, and based on technical analysis, noted below is the recommendation with the generic insights, entry price, target prices, and stop-loss Aluminium May Future (LME: CMALK25) for the next 2-4-week duration:

Aluminium May Future (LME: CMALK25)

Price Action and Technical Indicator Analysis:  May Aluminium futures are trading above a key horizontal support level, hinting at a potential rebound despite recent bearish candlestick patterns and a sharp 11% decline. This support zone, clearly visible on the daily chart, suggests the possibility of short covering and a recovery. The Relative Strength Index (RSI) stands at 15.70, indicating extremely oversold conditions and increasing the likelihood of a technical bounce. However, the 21-period and 50-period Simple Moving Averages (SMAs) now pose short-term resistance. With technical signals pointing to a possible upside, traders should watch resistance levels closely as they may cap further gains in the near term.

Now the next crucial resistance levels appear to be at USD 2450.00 and USD 2500.00, and prices may test these levels in the coming periods (2-4 weeks).

As per the above-mentioned price action and technical indicators analysis, Aluminium May Future (LME: CMALK25) is looking technically well-placed for a ‘Buy’ rating. Investment decisions should be made depending on an individual’s appetite for downside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. Technical summary of the ‘Buy’ recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, WASDE report, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact commodities’ prices:

Futures Contract Specifications

Disclaimers

Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.80:1.00), however, returns are generated within a 2-4 weeks’ time frame. This may be looked at by Individuals with sufficient risk appetite looking for returns within short investment duration. The investment recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the commodities has not been considered in the decision-making process. Other factors which could impact commodity prices include market risks, regulatory risks, interest rates risk, currency risks, and social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: Individuals can consider exiting from the commodity if the Target Price mentioned as per the Technical Analysis has been achieved and subject to the factors discussed above.

Note 3: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the commodity. Commodity with high volumes is more liquid compared to the lesser ones. Liquidity in commodity helps in easier and faster execution of the order. 

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or Selling interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or Selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Risk Reward Ratio: The risk reward ratio is the difference between an entry point to a stop loss and profit level. This report is based on ~80% Stop Loss of the Target 1 from the entry point.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is April 07, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note: Trading decisions require a thorough analysis by individuals. Technical reports, in general, chart out metrics that may be assessed by individuals before any commodity evaluation. The above are illustrative analytical factors used for evaluating the commodity; other parameters can be looked at along with additional risks per side.