Zinc on MCX settled down -1.43% at 151.45 dropped as investors booked profit knocked the prices from previous day high ahead of the US FOMC announcement while LME Zinc a day before closed strongly at $2,300 but failed to hold at this level – it was last at $2,285, down $15.
Meanwhile Chinese zinc smelters are increasingly turning towards North Korea as a source of concentrates supply rather than traditional overseas partners while treatment charges (TCs) in the international market remain soft, market observers claimed. In other central bank news, The Bank of Japan shifted key policies to target interest rates instead of its money-printing program, and recommitted to reaching its elusive 2 percent inflation goal as quickly as possible.
But as indicators improve from the world's top metals user, China, it appears more likely that January marked a floor for prices. In the week ahead, investors will be looking to the U.S. data on initial jobless claims and existing home sales.
And European Central Bank President Mario Draghi is to speak at an event in Frankfurt. Technically market is under long liquidation as market has witnessed drop in open interest by -21.56% to settled at 7100 while prices down -2.2 rupee, now Zinc is getting support at 150.5 and below same could see a test of 149.5 level, and resistance is now likely to be seen at 153, a move above could see prices testing 154.5.
--Zinc trading range for the day is 149.5-154.5.
--Zinc prices dropped on profit booking before a key U.S. Federal Reserve policy meeting.
--Federal Reserve left its policy interest rate unchanged to await more evidence of progress toward its goals
--Global economic growth will flounder this year and next at rates not seen since the financial crisis as the march of globalisation grinds to a halt, the OECD warned
Courtesy: Kedia Commodities