Zinc On MCX Settled Up 0.11%

Zinc on MCX settled up 0.11% at 180.45 amid expectations the metal's fundamentals had turned a corner, thanks to a robust outlook for Chinese steel. Since last month China's steel rebar prices are the highest in more than three years. 

Demand for rebar got a boost from China's infrastructure spending this year, fattening margins among producers. Support also seen after the update from Macquarie which expects a 650,000-tonne zinc shortfall this year and sees prices breaching $3,000 a tonne by the fourth quarter.

A rebounding U.S. dollar has placed downward pressure on the metals this week. The recent string of negative data releases have little bearing on underlying inflation, the minutes of the June 13-14 Federal Open Market Committee (FOMC) meeting revealed Wednesday. The Federal Reserve, which voted to raise interest rates last month, expects to forge ahead as planned. This means at least one more rate hike before the end of the year.

A hawkish central bank has failed to lift the dollar, but that could soon change should the economic data show signs of recovery. Now Investors keeping track of economic data will closely monitor nonfarm payrolls on Friday. The monthly report is expected to show the creation of 180,000 jobs last month, which is a substantial improvement over the 138,000 increase reported in May.

Technically market is under fresh buying as market has witnessed gain in open interest by 0.31% to settled at 8324 while prices up 0.2 rupees, now Zinc is getting support at 178.6 and below same could see a test of 176.8 level, And resistance is now likely to be seen at 182, a move above could see prices testing 183.6.

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Suhani Verma

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