Zinc on MCX settled down -2.58% at 179.60 as funds cut bets on higher prices as supply concerns faded. Also pressure seen after President Donald Trump's failure to push through a healthcare reform bill prompted investors to question the extent to which he can deliver on growth policies that have been priced in since his election.
The market focus is on New Orleans, warehouses' on-warrant stocks have dropped to 183,800 tonnes after a further 21,300 tonnes of cancellations or metal earmarked for delivery. On-warrant zinc stocks metal available to the market have fallen 42 percent this year to the lowest levels since November 2008. Noranda Income Fund said that zinc production at a Quebec plant, which was hit by a strike, was at 50-60 percent of normal operating levels.
The company said in February that the plant's 371 unionized workers, represented by the United Steelworkers of America, walked off the job after the two sides failed to agree on changes to a proposed pension plan in a new collective bargaining agreement. Now in the week ahead, investors will be continuing to monitor political developments in the U.S., as Trump’s promised tax reforms come into focus.
Expectations that the Trump administration would spur growth and inflation through fiscal stimulus pushed the dollar to 14-year highs in the weeks after the election. But the greenback has weakened in recent week as it became apparent that the White House would have difficulty in delivering on its legislative agenda.
Market watchers will also be watching U.S. economic reports, including figures on personal income and spending and appearances by a number of Fed officials. Technically now Zinc is getting support at 177 and below same could see a test of 174.2 level, And resistance is now likely to be seen at 182.7, a move above could see prices testing 185.6.