Zinc On MCX Settled Down -0.21%

Zinc on MCX settled down -0.21% at 169.90 while prices were little changed with holidays in the U.S., U.K. and China slowing trading activity around the world. Trading volumes were likely to remain light with U.S. markets closed Monday for Memorial Day while the U.K. is also shuttered for a public holiday.

Market players are looking ahead to this week's U.S. employment report on Friday for further signs of the Federal Reserve's likely rate hike trajectory through the end of the year. Besides the monthly jobs report, this week's holiday-shortened calendar also features U.S. data on manufacturing and service sector growth, consumer confidence, auto sales, personal spending, core PCE inflation, as well as monthly trade figures.

Zinc downside seems to be limited as stockpiles are at multi-year lows. Two major mines shut down last year, but demand remains relentless. The supply squeeze is on, and it's painfully tight. China is going through record amounts of zinc, and America plans to spend billions on infrastructure and military defense build-ups mean that zinc-more than at any time in history-is the number one go-to metal. Zinc will decide the fate of progress.

It will define the economic future, and it will even shape the military capabilities of the world's superpowers. Already in 2016, zinc smelting demand outpaced mine production, and end use demand outpaced smelting production and mine production combined. Now technically market is getting support at 169.5 and below same could see a test of 169 level, And resistance is now likely to be seen at 170.5, a move above could see prices testing 171.

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Suhani Verma

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