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Friday, June 2, 2023

MCX Zinc likely to trade in a range between 181.7-187.7

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Technically, MCX Zinc is getting support at 183.2 and below same could see a test of 181.7 levels and resistance is now likely to be seen at 186.2, a move above could see prices testing 187.7.

Zinc on MCX settled down 0.3% at 184.75 tracking weakness from LME zinc prices which slipped 0.6 percent to $2,565 under long liquidation as China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to 6.6 percent, the lowest in nearly three decades.

While with support measures expected to take time to kick in, many believe conditions are likely to get worse before they get better, and see a further slowing to 6.3 percent this year. Sentiments remain firm as the global zinc market deficit widened to 96,600 tonnes last November from a revised deficit of 52,000 tonnes in October, data from the ILZSG showed on Monday.

Last night the greenback continued its bullish momentum to start the week, as the US dollar index overnight climbed to the highest since January 4 at 96.43.

Meanwhile China said on Monday that its economy expanded 6.6% in 2018, meeting expectations but slower than 6.8% in 2017. According to the NBS, GDP was about 90.03 trillion yuan last year, up 6.6% from a year earlier, exceeding the government’s growth target of 6.5%.

The NBS said that the economy grew reasonably and maintained overall stability. For the fourth quarter of 2018, GDP growth came in at 6.4%, in line with expectations. Now a day ahead Economic data slated for release today include January’s ZEW economic sentiment for the eurozone and Germany, as well as US existing home sales in the US for December.  

Trading Ideas:
–Zinc trading range for the day is 181.7-187.7.
–Zinc pared gains on profit booking after prices seen supported by increase in zinc ingot stocks in China and abroad is less than expected.
–U.S. President Donald Trump said there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs on Chinese imports.
–The US industrial production finished the year on a strong note, rising 0.3% in December after a revised 0.4% gain in November.

Courtesy: Kedia Commodities

Source: Commodityonline.com

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