MCX Zinc under short covering; Resistance seen at 193.8

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Technically Zinc market is under short covering as market has witnessed drop in open interest by -17.56% to settled at 4604 while prices up 2.5 rupees.

Now MCX Zinc is getting support at 191.5 and below same could see a of 190 levels, and resistance is now likely to be seen at 193.8, a move above could see prices testing 194.6.

Zinc on MCX settled up 1.31% at 192.85 after U.S. and Chinese negotiators opened a new round of talks, raising hopes of resolving a year-long trade war. The U.S.- confrontation has pushed metals prices sharply lower as expect weaker economic growth and metals demand.

U.S. and Chinese trade officials held a constructive phone conversation, White House economic adviser Larry Kudlow said, marking a new round of talks. Kudlow said the talks went well. Federal Reserve Chairman Jerome Powell ’s prepared remarks suggest he is comfortable with market pricing of an interest rate cut at the end of July.

This was an opportunity to push back against those expectations if he wanted to, and he did just the opposite. Metals and mining company Nyrstar said it was extending force majeure at its Port Pirie lead and zinc smelter in until the last week of July, from the second week of this month as previously planned.

Investors awaited comments from US Federal Reserve Chairman Jerome Powell for possible clues on the central bank’s next move on interest rates. Disappointing China producer price inflation and global growth concerns will dampen risk appetite. The Chinese government is confident that economic growth can remain within a range of 6-6.5%, Finance Minister Liu Kun said.

Trading Ideas:
–Zinc trading range for the day is 190-194.6.
–Zinc gained after U.S. and Chinese negotiators opened a new round of talks, raising hopes of resolving a year-long trade war.
–Metals and mining company Nyrstar said it was extending force majeure at its Port Pirie lead and zinc smelter in Australia until the last week of July.
–U.S. and Chinese trade officials held a constructive phone conversation, White House economic adviser Larry Kudlow said, marking a new round of talks.

Courtesy: Kedia Commodities

Source: Commodityonline.com