The nickel market has witnessed a temporary surge in prices, raising questions about the sustainability of this relief rally. In the first half of 2024, the London Metal Exchange (LME) nickel prices have shown an upward trend, with analysts predicting a target of $20,000 per tonne before a potential decline in the latter half of the year.
In a recent analysis, experts have been cautious about remaining overly pessimistic, suggesting that a short-term rally was likely to occur before any downward correction. The current price movement indicates that the 50 monthly moving average (MMA) could serve as a strong resistance point, potentially leading to a decrease in prices to levels below the 100 MMA.
Despite the current rally, the market remains wary of the medium-term outlook, with weekly momentum indicators hinting at a possible bullish divergence. However, any rise in prices is expected to attract fresh selling pressure, especially if the LME nickel price approaches the $20,000-per-tonne mark.
The macroeconomic conditions also play a crucial role in the nickel market's dynamics. The anticipated relief rally emerged in the second half of the first quarter of 2024, allowing prices to aim for the psychological threshold of $20,000 per tonne. Nevertheless, the market is prepared for a potential downturn in the second half of the year, reflecting the ongoing challenges and uncertainties within the global economic landscape.
