DBT Bureau
Pune, 4 Dec 2025
Aluminium prices climbed 1.33% to ₹278.25, supported by tightening supply conditions and expectations of firmer demand. Market sentiment improved amid reports that Chinese smelters are approaching government-imposed capacity ceilings, limiting additional output. Inventories at the Shanghai Futures Exchange dropped 6.82% from last Friday, reinforcing the supply-tightness narrative. On the global front, primary aluminium production in October rose only 0.6% y/y to 6.294 million tonnes, indicating restrained supply growth. Japanese port stocks fell 3.6% in October to 329,100 tonnes, while production disruptions—from Iceland’s Grundartangi smelter to Alcoa’s closure of the Kwinana refinery—added to supply pressure. Century Aluminium’s output cuts further tightened the market. Trade data from China painted a robust demand picture: October imports of unwrought aluminium and products rose 10.4% y/y to 350,000 tonnes, following a strong 35.4% surge in September. Total imports for Jan–Oct reached 3.36 million tonnes, up 6.1% y/y. Exports in July also climbed to 542,000 tonnes, signalling strong global order flows. Outlook-wise, investment banks remain divided. Goldman Sachs cut its long-term price view to $2,350/t for Q4 2026, citing expectations of a modest surplus, while ANZ raised its near-term target to $2,900/t on improving manufacturing and construction demand. Fresh buying is visible with open interest rising 1.73% to 3,416. Aluminium has support at ₹276.6, below which ₹274.9 may be tested. Resistance stands at ₹279.4, and a breakout above this could push prices toward ₹280.5.
Market Analysis:
- Aluminium trading range for the day is ₹274.9- ₹280.5.
- Aluminium prices gained amid concerns that Chinese smelters are nearing government-imposed capacity limits, constraining supply.
- China’s Nov Alumina output falls 4.44% mom as environmental curbs cut northern operations
- Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange dropped 6.82% from last Friday.
Gold edged 0.54% higher to ₹130,462, supported by persistent expectations of a December Federal Reserve rate cut, with markets pricing in nearly a 90% probability of a 25-bps reduction. Softer US economic data reinforced the dovish outlook, while speculation that Kevin Hassett may replace Jerome Powell as the next Fed chair added to rate-cut optimism. Investors now await the delayed September PCE report for further guidance. US Treasury yields also eased slightly following a global bond sell-off, offering additional support to bullion prices. Central bank demand remained a strong pillar, with a net 53 tonnes added in October, the highest monthly increase since November 2024. Poland and Brazil led purchases, while China extended its buying streak to 12 consecutive months, lifting its reserves to 2,304 tonnes. Russia was the only major seller, trimming 3 tonnes. However, high global prices weighed on retail demand across Asia. In India, wedding-season buying remained muted, with dealers offering discounts up to $18/oz. In China, the removal of VAT exemptions on gold purchases dampened appetite, leading to mixed premiums and discounts. Meanwhile, Singapore and Hong Kong saw modest premiums in the physical market. Technically, gold is in short covering, with open interest falling 2.21% to 13,011. Support lies at ₹129,910, with further downside risk to ₹129,365, while resistance is at ₹131,200, and a breakout could push prices toward ₹131,945.
Market Analysis:
- Gold trading range for the day is ₹129365- ₹131945.
- Gold rose as investors held on to expectations of a December Federal Reserve rate cut.
- Private businesses in the US cut 32K jobs in November 2025, following an upwardly revised 47K gain in October.
- Central banks added a net 53 tonnes of Gold to reserves in October, marking the strongest monthly increase since November 2024.
Source: Kedia Stocks & Commodities Research Pvt. Ltd.
