Commodity Trading Tips for Zinc by Kedia Commodity

Ajay Kumar Kedia 5 August 2013

zinc Zinc yesterday settled at 113.15 as major economic data from many euro zone countries topped expectations, boosting market sentiment and pushed up zinc prices to continue rise. The number of US non-farm employment increased by 162,000, much lower than expected, which triggered speculations that the US Federal Reserve will taper off QE3. This, when combined with the falling US dollar index, pushed up LME zinc prices to break through all moving averages and touching 1,888/mt. But at the end of trading, LME zinc prices rolled back some gains, and finally closed at $1,867.5/mt, up $13.5/mt, or 0.73 %. US non-farm employment report, non-farm payrolls rose by
162,000 in July, lower than the 185,000 forecast and June's 195,000. Non-farm payrolls in June were revised down from a 195,000 increase to a 188,000 growth, and non-farm payrolls in May were also revised down from a 195,000 rise to a 176,000 increase. However, unemployment rate fell from 7.6% to 7.4%, the lowest since December 2008. Disappointing non-farm employment report alleviated worries that the Fed will begin to taper off QE3 in September. As a result, the US dollar index retreated from 82, lending support to base metals. On the other hand, factory orders in June missed forecasts, triggering concerns that a weaker US economy will eat into metal demand. While the PBOC said during its 2Q monetary policy report that lending to polluting and energy-intensive enterprises will be constrained. China's non-manufacturing PMI was 54.1 in July, capping forecasts and rising for the first time in four months, which will lift base metals prices only marginally. Technically market is getting support at 113.10 and below same could see a test of 112.80 level, And resistance is now likely to be seen at 113.30, a move above could see prices testing 113.40.