Technically Zinc market is getting support at 167.1 and below same could see a test of 165 levels and resistance is now likely to be seen at 172.6, a move above could see prices testing 176.
Zinc on MCX settled down -2.14% at 169 tracking weakness from LME zinc fell further after a rebound, due to limited upward momentum, and settled the night 1.78% lower at $2,321/mt. Also sentiments remain down as LME zinc inventories have climbed 74 percent since the beginning of March to 229,675 tonnes.
As risk aversion sentiment is unlikely to ease in the short run, expectations of production resumption after environmental curbs also weighed on the price. Despite growing signs of physical tightness across the base metals complex, a negative macroeconomic backdrop continues to trump fundamentals.
The upside momentum remains capped, with buyers reluctant to establish their dominance due to the simmering trade tensions between the US and China. Concerns over a fresh set of US tariffs targeting $200 billion worth of Chinese goods, due to come into effect last week, and Chinese authorities’ vows to retaliate against any further tariffs continue to undermine market confidence.
As such, global risk sentiment remains clouded by fear and uncertainty. Meanwhile China will respond if the United States takes any new steps on trade, the foreign ministry said on Monday, after U.S. President Donald Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States.
Base metals dipped across the board as LME lead led the losses and closed 2.21% lower. LME zinc slumped 1.78%, nickel lost 1.57%, aluminium fell 1.3%, and SHFE nickel went down 1.27%, zinc declined 1.18%, and aluminium slid 1.02%. Now Market participants should monitor data including the US producer price index (PPI) for August, and its EIA weekly crude inventory data.
--Zinc trading range for the day is 165-176.
-- Zinc dropped amid concern that an escalating trade war between the U.S. and China will erode demand.
--China's consumer price index (CPI), a main gauge of inflation, rose 2.3% year on year in August, compared with 2.1% for July.
--Eurozone investor confidence deteriorated unexpectedly in September, survey data from think tank Sentix showed.
Courtesy: Kedia Commodities