Current nickel volatility as a result of profit taking Stainless Espresso 1200x630 1

5 June 2024 – Nickel is once again extremely volatile. Is price volatility due to classic profit-taking by investing market players? In our opinion, there is a lot to be said for it. But why is that the case? And the FED is expected to announce its current stance on interest rates in the United States today.

Current nickel volatility as a result of profit taking?

It is common knowledge that we often disagree with so-called experts who have never traded a gram of stainless steel. Today, however, we must explain what is happening to the nickel price.

To begin with, our opinion and assessment in yesterday’s article (LME nickel stocks artificially high?) has not changed. This also brings us to an important point: it is an opinion and assessment based on the data and facts available to us. And of course it does not constitute professional financial advice.

But what is going on with nickel right now?

LME nickel prices have fallen since the peak in mid-May 2024. Even though nothing has actually changed fundamentally. One of the reasons for this is that there is a change in contracts in the middle of the month, which always has an impact on base metal prices.

If you now also look at the LME COTRs of the past few weeks, it is easy to see that investors have reduced their long positions in order to probably take advantage of a new re-entry level in the near future. This is classic profit taking by investing players on the base metals market and not by consuming players.

US interest rate decision today, Wednesday

When Jerome Powell, Chair of the Federal Reserve of the United States, gives his regular speech today, June 5, most analysts and investors expect the US key interest rate to remain stable.

By contrast, the European Central Bank (ECB) is expected to make its first slight interest rate cut tomorrow, Thursday.

The decisions of the major central banks are likely to have already been priced into exchange rates.

Some investment investors are therefore likely to have used the upcoming decisions to reduce or adjust some of their positions, although not to get out of commodity stocks completely.

We hope that this brief summary helps you to understand the current movements on the commodities market a little better. We would like to reiterate that this is our opinion and does not claim to be legally binding advice.

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