Zinc On MCX Settled Down -0.5%

Zinc on MCX settled down -0.5% at 179.3 as warehouse inventories monitored by the Shanghai Futures Exchange jumped 16.2 percent from last Friday to 77,786 tonnes. Also, LME data showed a 28,500 tonne, or 41 percent, daily increase in "on-warrant" or available inventory. However, downside seen limited helped by encouraging economic reports from top consumer China and as weak U.S. consumer prices and retail sales data dimmed chances of another rate rise this year.

China's fiscal spending jumped 19.1 percent in June from a year earlier, quickening sharply from a 9.2 percent rise in May and signaling government efforts to cushion a gradual slowdown in the world's second-largest economy. China posted stronger-than-expected June trade figures, bolstered by firm global demand for Chinese goods and robust appetite for construction materials at home, but local curbs on lending could weigh on imports later this year.

Zinc prices have moved sharply higher over the past month, spurred by tight supply amid tougher Chinese environmental regulations. Inflows of imported zinc in Shanghai will decline in July due mainly to import losses. About 8,000 tonnes of imported zinc will flow to Shanghai in the week. TCs of domestic zinc concentrate increased in July in some regions of China. US data showed the rate of inflation over the past 12 months slowed to 1.6% in June from 1.9% in the prior month, and it is down from a five-year high of 2.7% just five months ago.

In a separate report the Depart of Commerce said retail sales dipped by 0.2% in June, missing forecasts of a 0.2% increase. Technically now Zinc is getting support at 177.8 and below same could see a test of 176.2 level, And resistance is now likely to be seen at 180.7, a move above could see prices testing 182.

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Suhani Verma

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