Commodity Trading Tips for Zinc by Kedia Commodity

Ajay Kumar Kedia 30 July 2013

zinc Zinc yesterday settled up 0.28% at 108.25 steadied after falling to its lowest level as the dollar fell but further gains were capped by uncertainty about growth in top consumer China. Investors are watching for official data this week from China that gauges activity in its vast manufacturing sector. Last week an initial reading from HSBC showed factory activity at its slowest in 11 months in July. LME zinc prices closed with declines, while slowing industrial margins and inspections of local debt also triggered concerns over China's demand for metals. This, when combined with the onset of low demand season for zinc, investor buying interest was low. Menawhile US June pending home sales fell short of expectations and May, and Dallas Fed's manufacturing index for July topped expectations but was below June's levels, which is considered to support monetary easing polices. The market was cautious before the US Federal Reserve announces its interest rate decision. Annualized US pending home sales in June was 10.9%, lower than both expectations and May, while monthly rate dropped by 0.4%, compared to a growth of 6.7% in May. That is because mortgage interest rates began to rise since May, which affected home sales in June, while contracts signed also decreased due to low inventories. Dallas Fed's manufacturing index for July recorded 11.4, much lower than 17.1 expected, and this weighed down US stocks. Technically market is under short covering as market has witnessed drop in open interest by -4.05% to settled at 3342 while prices up 0.3 rupee, now Zinc is getting support at 107.60 and below same could see a test of 106.90 level, And resistance is now likely to be seen at 108.60, a move above could see prices testing 109.00.