Zinc On MCX Settled Down -0.09% At 166.80


Zinc on MCX settled down -0.09% at 166.80 tracking weakness from LME zinc which was overall down 3.75% at $2,525.50/tonne on the London Metals Exchange foreshadowing another bad day but sentiments improved as the U.S. dollar lost ground against the euro in the wake of the French election, making commodities more affordable for buyers paying with other currencies. Lastweek Zinc led an across-the board rise in Shanghai base metals futures on Friday on the back of robust gains in overnight London trading and buoyant equity markets. While traders are still bullish since the update that producer Glencore boosted prices when it announced in October 2015 that it was cutting output because the price was too low. Zinc production in 2016 fell 24 percent to 1.09 million tonnes. The Swiss-based firm suspended operations at Lady Loretta in Australia and Iscaycruz in Peru while reducing output at George Fisher and McArthur River in Australia and at various operations in Kazakhstan. The group said in February it would bring zinc production back in stages in order not to damage prices.
 
It forecast 2017 output would rise 9 percent to 1.19 million tonnes. Meanwhile dollar index is consolidating around 99 after its gap lower on Monday, the index breached a major support line underpinning the lows from December and February for the second time yesterday, the first time was on March 27.

The base metals are, at best, consolidating after recent weakness, although prices continues to fall. So for now the better sentiment following round one of the French election has not flowed into the base metals and as such, they remain vulnerable. Now technically market is getting support at 165.7 and below same could see a test of 164.7 level, And resistance is now likely to be seen at 167.9, a move above could see prices testing 169.1. 
 

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Suhani Verma

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