Aluminium gains on jitters ahead of U.S. jobs, OPEC

Aluminium along with other base metals rose on Friday, last week, as nervous investors bought back short ositions ahead of a U.S. jobs report and an OPEC meeting result. Prices of aluminium that have been plummeting since for last few months surged to week highs.

Analysts expect that data later on Friday will show U.S. job growth remained solid in November, which could pave the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade.

"People seem to be pre-positioning ahead of non-farm payrolls and OPEC, in case they throw up surprises," said Robin Bhar, head of metals research at Societe Generale in London. "We've already had one surprise (with the ECB) so the market is cautious and people are covering shorts, especially since it's Friday."

The European Central bank on Thursday shocked markets by cutting its deposit rate by just 0.1 percent and extending its government bond purchase programme by only six months, sending European shares to their biggest fall in three months and the euro on its biggest surge since March.

OPEC looked set to maintain its production policies on Friday, although the group's poorer members have been piling pressure on its wealthier members led by Saudi Arabia to curb supply.

Aluminium jumped 2.4 percent in official rings to $1,509 a tonne after touching $1,521, the strongest in a week.

Bhar said a strong U.S. jobs reading and resulting strong dollar could put a damper on the metals market. A firmer dollar weighs on metals priced in the U.S. currency, making them more expensive for buyers outside of the United States.

"The non-farm payrolls will pretty much determine whether we extend the short-covering rally or whether it's capped around current levels and we then see the bias return to the downside," he said.

Investors were also still concerned about demand in China.

"Demand is weak. The signals coming out of China suggest that you're not getting a pickup in infrastructure spend and a lot of people have been looking for that," said an analyst based in Melbourne.

An avalanche of data from China in the coming weeks is likely to show that the world's second-largest economy remains sluggish, reinforcing expectations Beijing will release more stimulus measures in the months ahead.