Zinc On MCX Settled Down -0.45%

Zinc on MCX settled down -0.45% at 176.75 on some profit booking as traders are caution on current prices level as Zinc hit near three-month highs on Wednesday boosted by sharp falls in the dollar, signs of tighter supply and optimism over Chinese demand, although worries about U.S. economic growth capped the upside. Support also seen on falling stocks in LME warehouses, which are down nearly 30 percent since January to 304,000 tonnes, and on cancelled warrants at above 65 percent.

Yesterday LME Zinc ended down 0.5 percent at $2,734 a tonne, having hit its highest since early April at $2,764. Meanwhile according to a recent report by CRU on the zinc market outlook, there are many factors that indicate higher zinc prices in the near future. Some of these factors include: slowdowns in Chinese production of zinc, global supply being lower than demand resulting in a market deficit for four of the last five quarters and projections that the world metal market will remain in deficit through 2017-2018.

Pending home sales in the U.S. unexpectedly decreased for the third consecutive month in May, according to a report released by the National Association of Realtors. NAR said its pending home sales index fell by 0.8 percent to 108.5 in May from a downwardly revised 109.4 in April.

Technically market is under long liquidation as market has witnessed drop in open interest by -15.8% to settled at 4264 while prices down -0.8 rupees, now Zinc is getting support at 175.4 and below same could see a test of 174.1 level, And resistance is now likely to be seen at 178.2, a move above could see prices testing 179.7.

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Suhani Verma

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