Zinc On MCX Settled Up 0.16% At 159

Zinc on MCX settled up 0.16% at 159 recovered from the day's low as support seen after the data from the ILZSG showed the global zinc market deepened its deficit to 92,400 tonnes in April from a revised deficit of 72,700 tonnes in March. While prices traded with weakness in early session of Wednesday, with investors cautious ahead of the outcome of a two-day meeting where the US Fed is expected to hike interest rates and give clues on its policy outlook for the rest of the year.

The global zinc market deepened its deficit to 92,400 tonnes in April from a revised deficit of 72,700 tonnes in March, data from the ILZSG showed. In the first four months of the year, the zinc market was in a deficit of 112,000 tonnes versus a deficit of 20,000 tonnes in the same period last year. Mine output rose to 4,269,000 tonnes, up 7 percent from the first four months of last year.

ILZSG said zinc stocks at consumers, producers and in exchange warehouses fell to 1,260,400 tonnes in April from 1,355,100 tonnes in the previous month. Yesterday the Federal Reserve raised interest rates for the second time in three months and said it would begin cutting its holdings of bonds and other securities this year, signaling its confidence in a growing U.S. economy and strengthening job market.

While China's economy generally remained on solid footing in May, but tighter monetary policy, a cooling housing market and slowing investment reinforced views that it will gradually lose momentum in coming months. Now technically market is under short covering and getting support at 158.3 and below same could see a test of 157.4 level, And resistance is now likely to be seen at 160.3, a move above could see prices testing 161.4.

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Suhani Verma

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