Zinc yesterday traded with the positive node and settled 0.84% up at 101.75 Since results for Spanish and French government bond auctions turned out to be above market expectations, and US initial jobless claims for last week dived to a four-year-lowest, LME Zinc prices overnight showed a strong trend and stood above the USD 2,000/mt mark influenced by positive news.
LME zinc prices moved between USD 2,025-2,035/mt and closed at USD 2,033/mt.
A slew of positive news came from market overnight. It was reported that China’s central bank allow five major banks to increase new loans in Q1 2012 by 5% YoY, which means that China’s bank requirement reserve ratio may be cut further, boosting prospect for basemetal demand.
In addition, Spanish government bond auction was better than market expectation.
Meanwhile, France raised EUR 9.5 through debt auction after S&P cut its credit rating last Friday, improving market sentient to great extent.
In response, the euro was pushed higher and the US dollar fell to test 80.
Later, the US announced that its initial jobless claim fell to four year low, and home starts for December fell to 4.1%, but operating rate at single home up 4.4%, an indication that the US housing market is bottoming out, boosting the US equity market to close with gains.
Inspired by a slew of positive news, LME prices remained upward momentum which will lend fundamental support for LME prices.
For today's session market is looking to take support at 101, a break below could see a test of 100.2 and where as resistance is now likely to be seen at 102.4, a move above could see prices testing 103.
Trading Ideas:
Zinc trading range is 100.2-103.
Zinc jumped near to 1% as euro strengthened, and the upbeat economic data from the US boosted market sentiment.
Market concern eased to certain extent, but cautious attitude is still needed.
Zinc daily stocks at Shanghai exchange came down by 174 tonnes
Courtesy: Kedia Commodities
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