Commodity Trading Tips for Zinc by KediaCommodity

Ajay Kumar Kedia 29 July 2013

zinc Zinc yesterday settled at 107.95 after University of Michigan's July CCI hit a record high since March 2007, boosting US stocks to rise across the board. But many investment banks were bearish towards base metals market, and JP Morgan announced it would exit commodity market, which triggered market apprehension. LME zinc prices opened at $1,879/mt, and then plummeted due to selling pressure, and finally closed at $1,949/mt, down $28/mt, or 1.49%. Base metals prices were affected by concerns over China's demand. The list of outdated capacity elimination in 19 industries was released, and the market was concerned slower Chinese economic growth and sliding manufacturing will reduce demand for base metals. Besides, investment banks are selling spot base metals, and JP Morgan announced last Friday it would seek for strategic substitute for spot commodity business, including selling and quitting spot commodity business, or implement strategic cooperation with those business, which pushed down base metals prices. University of Michigan's July CCI was 85.1, a record high since March 2007, but this did not boost the US dollar index as the market took a wait-and-see attitude if stimulus policies will be enhanced due to Japan's rising inflation data. The US dollar against JPY dropped by over 1%. European and US stocks were mixed, with US socks remaining strong. LME base metals prices mostly fell. Technically market is under short covering as market has witnessed drop in open interest by -0.74% to settled at 3483 while prices up 0.1 rupee, now Zinc is getting support at 107.8 and below same could see a test of 107.6 level, And resistance is now likely to be seen at 108.1, a move above could see prices testing 108.2.