MCX Zinc under long liquidation; Resistance seen at 186
Commodity Online | December 02 2019
UPDATED 09:50:29 IST

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Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 5.57% to settled at 2727 while prices down 0.2 rupees.

Now MCX Zinc is getting support at 184.4 and below same could see a test of 183.5 levels, and resistance is now likely to be seen at 186, a move above could see prices testing 186.7.

Zinc prices traded in range after data pointed to a weekly decline in domestic social inventories of refined zinc. However, there remain downside risks in prices as US-China trade uncertainties boost safe-haven sentiment.

Inventories of zinc ingot across Shanghai-bonded areas rose for a second straight week this week, as cargoes under bills of lading arrived. Data showed that Shanghai bonded zinc stocks increased 1,500 mt from a week earlier to 80,900 mt as of Friday November 29. The stocks increased 5,100 mt in the past fortnight.

Social inventories of refined zinc across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei stood at 135,300 mt as of November 29, down 6,000 mt from Friday November 22 and 5,300 mt from Monday November 25, showed data. Shanghai contributed to the decline in overall stocks with a decline of over 7,000 mt on the week, as continued weakness in zinc prices kept downstream consumers keen to make purchases.

Shipments to downstream consumers who used to source from the Ningbo market in Zhejiang, also helped lower zinc stocks in Shanghai. Meanwhile, the Federal Reserve’s summary of economic conditions —showed the central bank saw the economy expanding modestly between October and mid-November. “Outlooks generally remained positive with some contacts expecting the current pace of growth to continue into next year,” the Beige Book said.

Trading Ideas:
--Zinc trading range for the day is 183.5-186.7.
--Zinc prices traded in range after data pointed to a weekly decline in domestic social inventories of refined zinc.
--However, there remain downside risks in prices as US-China trade uncertainties boost safe-haven sentiment.
--Inventories of zinc ingot across Shanghai-bonded areas rose for a second straight week this week, as cargoes under bills of lading arrived.

Courtesy: Kedia Commodities

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