Zinc On MCX Settled Down -0.72%

Zinc on MCX settled down -0.72% at 180.35 as weighed down by falls in steel prices. While prices still holding above 180 level mark as the market worried about falling stocks in exchange warehouses, shortages and expectations of stronger demand from top consumer China. Also worries about supplies on the LME market are highlighted by the discount for cash over the 3-month forward, which has narrowed to near zero from around $20 a tonne in mid-June.

Yesterday china posted stronger-than-expected June trade figures on Thursday, 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. 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 -1.17% to settled at 8703 while prices down -1.3 rupees, now Zinc is getting support at 179.2 and below same could see a test of 177.9 level, And resistance is now likely to be seen at 182.6, a move above could see prices testing 184.7.

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Suhani Verma

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