Zinc yesterday traded with the negative node and settled -1.29% down at 100.85 as no positive result was achieved at the euro zone finance ministers' meeting, and market concerned further tight monetary policy from China, with sluggish sentiment reported.
Obama laid out a new package that aims to cut the federal deficit by around USD 4 trillion, pushing up the US dollar and weighing down the euro. European stock indexes were down by over 2%, while the US equity market opened low but rebounded later to pare losses by 1%.
Crude oil and gold prices both slumped, and LME base metal prices closed with losses across the board, down over 2%, with LME copper prices even hitting a new intra-year low. Obama’s deficit cut plan was in line with market expectation, but the plan was opposed by both parties in Congress.
Close attention should be paid to latest movement of deficit cut plan. The NAHB announced that the US house builders confidence was down in Sept, and the US housing market index was still at level. The NAHB made an announcement that NAHB/Wells Fargo HMI was down 1 point to 14 in Sept, while market previous estimation was 15.
LME zinc prices slipped gradually slip on the above news and prices declined below USD 2,100/mt, with prices finally closing at USD 2,111/mt, down USD 51/mt.
For today's session market is looking to take support at 100, a break below could see a test of 99.2 and where as resistance is now likely to be seen at 101.6, a move above could see prices testing 102.3.
Trading Ideas:
Zinc trading range is 99.2-102.3.
Zinc prices slipped as EU finance ministers failed to offer a specific plan to halt Greece's debt crisis after meeting.
Economic data from US shows that homebuilders' confidence in September dipped, and hsg market index remained low.
LME zinc prices declined below USD 2,100/mt, with prices finally closing at USD 2,111/mt, down USD 51/mt.
Courtesy: Kedia Commodities
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