Commodity Trading Tips for Zinc by Kedia Commodity

Ajay Kumar Kedia 13 August 2013

zinc Zinc yesterday settled up 1.29% at 117.50 as positive effect from strong Chinese economic data began to wane as investors began to reconsider demand prospects from the world's second largest economy. Markets are cautious ahead of the upcoming US retail sales data scheduled for release tomorrow. US stocks were mixed and the US dollar index bounced back, putting downward pressure on commodity prices. It was reported that Chinese government had provided financial support to major domestic provinces and cities. The Agricultural Bank of China has signed a contract with Shanghai government that it will provide RMB 250 billion loans to the Disney Land and Free Trade Zone projects. The market expects other state-owned banks will also imitate the Agricultural Bank of China to secure the 7.5% economic growth target this year, boosting the market. But a rising US dollar index will prevent prices from rebounding. Investors have closely been looking out for U. S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases. Any improvement in the U. S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months. The Fed's stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar. Technically market is under short covering as market has witnessed drop in open interest by -7.13% to settled at 4272 while prices up 1.5 rupee, now Zinc is getting support at 115.9 and below same could see a test of 114.3 level, And resistance is now likely to be seen at 118.6, a move above could see prices testing 119.7.