Nickel market under fresh selling; Support seen at 913.5
MCX Copper likely to trade between 411.9-428.3 levels
MCX Natural Gas may trade in a range between 184.8-192.6
Crude Oil market under short covering; Support seen at 4608
Silver market under fresh selling; Support seen at 38256
Zinc on MCX settled up 1.29% at 173 gained on short covering as support seen after LME zinc prices halted its downward trend while sentiments still remain weak with pressure from a rising US dollar.
Zinc prices are likely to gain some support from shrinking social inventories across Shanghai, Guangdong and Tianjin. We expect the contract to strengthen today given LME zinc’s strong performance.
Last night the US dollar index gained 0.48% to close at 94.96 on Federal Reserve Board chairman Jerome Powell’s remarks that back more rate increases as the economy is growing “considerably stronger”. Robust data from the US industrial production and home builder confidence also provided support.
Base metals saw mixed trading on the impact of trade war and slower growth of China’s economy. LME aluminium lost 1.5%, copper and nickel edged down, while zinc rebounded over 1%, and lead and tin gained slightly. Copper and zinc touched a low in nearly a year overnight.
Nickel and aluminium dipped to the lowest levels in four months. Meanwhile the US industrial production rose 0.6% last month after falling 0.5% in May. This was buoyed by a sharp rebound in manufacturing and further gains in mining output, the latest sign of robust economic growth in the second quarter.
Mining production increased 1.2% in June, adding to the 2.2% rise in May. Technically market is under short covering as market has witnessed drop in open interest by 16.48% to settled at 7665 while prices up 2.2 rupees, now Zinc is getting support at 171.1 and below same could see a test of 169.1 level, And resistance is now likely to be seen at 174.9, a move above could see prices testing 176.7.
Trading Ideas:
–Zinc trading range for the day is 169.1-176.7.
–Zinc recovered on short covering after prices remained under pressure amid worries over Washington-Beijing trade war curbing demand.
–China’s economy expanded at a slower pace in the second quarter as Beijing’s efforts to contain debt hurt activity.
–Zinc social inventory in Shanghai, Guangdong and Tianjin fell 1,400 mt over the weekend to 97,900 mt amid limited arrivals.
Courtesy: Kedia Commodities
Source: Commodityonline.com
