Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 19.07% to settled at 2711 while prices down 1.55 rupees.
Now MCX Zinc is getting support at 185.5 and below same could see a test of 183.6 level, And resistance is now likely to be seen at 188.7, a move above could see prices testing 190.
Zinc on MCX settled down 0.82% at 187.15 on long liquidation while prices recovered some earlier losses tracking bounce from LME Zinc which closed at $2,610/mt as support seen from low inventories sustains, weakening consumption by year-end could limit upside room for zinc prices.
Last night most base metals ended in negative territory whereby LME nickel slumped over 3%, aluminium dropped 1.6%, copper slid some 1% and zinc lost 0.4% while lead gained 0.4%.
The US dollar weakened against major peers on Thursday as US Treasury yields tumbled and traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and heightened market volatility.
The dollar has been under pressure this week as an inversion in part of the US yield curve raised a red flag for a potential recession. While Fed policymakers are still widely expected to raise interest rates again at their December 18-19 meeting, but the market focus is on how many rate hikes will follow in 2019.
Separately, data showed private employers hired fewer workers than expected in November, pointing to a moderation in the pace of job growth.
Now a day ahead Economic data slated for release today include China’s November foreign exchange reserves, the eurozone’s third-quarter GDP growth and US November nonfarm payrolls report, the University of Michigan’s December consumer confidence index and October wholesale inventories.
--Zinc trading range for the day is 183.6-190.
--Zinc dropped as worries over weak demand caused by Sino-U.S. trade tensions persisted.
--China's factory activity grew slightly in November, though new export orders extended their decline in a further blow to the sector already hurt by the Sino-U.S. trade frictions.
--The premium for cash LME zinc over the three-month price soared to $113 a tonne, the highest since 1997.
Courtesy: Kedia Commodities