On MCX Settled Up 1.9% At 174.05 - Ways2Capital

On MCX settled up 1.9% at 174.05 on fresh buying and tracking LME Zinc which ended 3.3 percent higher at $2,640, having touched its highest since May 31 earlier at $2,642, bolstered by the weaker dollar and concerns over tightening supplies, with LME stocks at their lowest since January 2009. Investors sought to balance concerns about tightening supplies with uncertainty over Chinese demand. 

A steady stream of news has encouraged the bulls recently, including a talk of a market deficit, an expected strike in major producer Peru and declining inventories. But monetary tightening in China has stoked worries about the appetite for industrial metals in its biggest market.

Zinc prices also got support as the market focused on falling stocks in LME warehouses, which at 304,000 tonnes are down nearly 30 percent since January. On Tuesday, Boston Fed President Eric Rosengren said low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously while Bill Dudley, head of the New York Federal Reserve, a day earlier, downplayed the recent slowdown in inflation, warning that halting rate increases at this point would be dangerous.

Technically market is under fresh buying as market has witnessed gain in open interest by 6.52% to settled at 5668 while prices up 3.25 rupees, now Zinc is getting support at 170.5 and below same could see a test of 166.9 level, And resistance is now likely to be seen at 176.3, a move above could see prices testing 178.5.

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Suhani Verma

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