Commodity Trading Tips for Zinc by KediaCommodity

Ajay Kumar Kedia 13 May 2014

Zinc Zinc settled up 1.6% at 123.95 as metals continued to digest a series of new policies in China’s capital market, launched over the weekend, while encouraging US economic reports also overshadowed the escalating Ukraine crisis. In this context, stocks across the world rose, and base metals all rallied. In China, base metal gained driven by the new rules to promote healthy development of capital market issued by the State Council. In other news, China’s total financing fell by another 12% in April following March’s 19% decline, but M2 increased 13.2% year-on-year last month. New RMB lending dropped about 30% on the month in April, and was RMB 105.3 billion lower than expected. In Ukraine, nearly 90% of voters in the country’s Donetsk region believed the area should declare independence from Ukraine in a referendum held by pro-Russian separatists, raising expectation that the region may join Russia in the future. Russia welcomed the vote and said it respects the will of the population in the area. The EU, however, considered the vote illegal, and said it might impose further sanctions on Russia. Since lastweek Zinc moved in tandem with aluminum prices, losing 0.66% last week. At the same time, the metal still may witness some support pertaining to signs of solid demand. Last year, global markets unexpectedly swung to a deficit, while stocks at the LME continued to decline. Now LME storage is down almost 30% year-to-date. Technically market is under short covering as market has witnessed drop in open interest by -1.74% to settled at 1694 while prices up 1.95 rupee, now Zinc is getting support at 122.3 and below same could see a test of 120.7 level, And resistance is now likely to be seen at 124.8, a move above could see prices testing 125.7.