Technically Zinc market is under short covering as market has witnessed drop in open interest by 3.76% to settled at 1613 while prices up 0.4 rupees.
Now MCX Zinc is getting support at 269.8 and below same could see a test of 267.4 levels, and resistance is now likely to be seen at 273.9, a move above could see prices testing 275.6.
Zinc yesterday settled up by 0.15% at 272.15 with nominal gains as falling zinc prices have revived the downstream sector, who started restocking.
However upside seen limited as a mid-size zinc smelter will commence production as planned in November, potentially pushing up zinc supply.
The closely watched conversation between Chinese President Xi Jinping and U.S.President Joe Biden yielded no immediate outcomes but struck a positive tone and was seen as a chance to improve relations.
In the Eurozone, the president of European Central Bank Lagarde reiterated dovish stance that a tight monetary policy will throttle the economic recovery in Europe, supporting US dollar index.
Persistent supply chain bottlenecks and soaring energy costs are slowing euro zone growth and will keep inflation high for even longer than had been thought, European Central Bank President Christine Lagarde said.
The ECB has banked on a rapid decline in inflation next year but policymakers are now openly admitting that their forecasts, already revised up several times, are still too low, as stress in the global economy takes a toll.
But Lagarde continued to push back on calls and market bets for tighter policy, repeating the ECB’s message that conditions for higher interest rates are unlikely to be met next year as inflation is still seen back below the bank’s 2% target farther out.
Trading Ideas:
–Zinc trading range for the day is 267.4-275.6.
–Zinc ended with nominal gains as falling zinc prices have revived the downstream sector, who started restocking.
–However upside seen limited as a mid-size zinc smelter will commence production as planned in November, potentially pushing up zinc supply.
–The total zinc ingot inventories across seven major markets in China totalled 135,200 mt, up 3,900 mt.
Courtesy: Kedia Commodities
Source: Comodity Online
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