Zinc On MCX Settled Down -0.41%

Zinc on MCX settled down -0.41% at 181.65 dropped on profit booking after prices rallied to their highest in more than three months on Wednesday as the market worried about falling stocks in exchange warehouses, shortages and expectations of stronger demand from top consumer China. Support seen after stocks of zinc in LME warehouses at 273,675 are down more 35 percent since the start of the year. Also Zinc inventories in warehouses monitored by the Shanghai Futures Exchange have plummeted more than 50 percent to below 67,000 tonnes since January.

While China accounts for nearly half of global demand estimated at around 15 million tonnes this year. Overall sentiments where positive for prices after the update that the International Lead and Zinc Study Group (ILZSG) said in April the zinc market was expected to see a deficit of 226,000 tonnes this year. While from US we have seen dollar came under some pressure following comments by Fed Governor Brainard.

Although she expressed a preference for starting to shrink the balance sheet soon, she was relatively cautious surrounding further increases in interest rates and comments suggested a preference to wait until December for hiking again in order to assess inflation developments. 

Technically market is under long liquidation as market has witnessed drop in open interest by -2.67% to settled at 8806 while prices down -0.75 rupees, now Zinc is getting support at 180.3 and below same could see a test of 179 level, And resistance is now likely to be seen at 184.1, a move above could see prices testing 186.6.

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Suhani Verma

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