Zinc On MCX Settled Up 3.58%

Zinc on MCX settled up 3.58% at 170.80 rallied tracking gains from LME Zinc hit a three-week high on longstanding concerns over potential supply constraints. LME Zinc 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.

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. 

Yesterday dollar dipped versus a currency basket after touching a five-week peak on Tuesday, with a slump in oil prices to seven-month lows calling into question the impact of inflation on the pace of future interest rate hikes.

A weaker dollar makes dollar-priced metals cheaper for non-US investors. Market players will focus on US Unemployment Claims data due later in the day after the dollar failed to capitalize on upbeat housing data, as the National Association of Realtors said strong demand and inexpensive mortgages were driving up prices at an unsustainable rate, as sales of existing homes.

Now technically market is under fresh buying as market has witnessed gain in open interest by 10.05% to settled at 5321 while prices up 5.9 rupees, now Zinc is getting support at 166.6 and below same could see a test of 162.5 level, And resistance is now likely to be seen at 172.9, a move above could see prices testing 175.1.

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Suhani Verma

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