Zinc on MCX settled down -4.27% at 180.3 as investors prepared for possible shocks in Europe ahead of an Italian referendum and Austrian election. Orders to withdraw the metal from warehouses tracked by the London Metal Exchange rose to the highest since February. Glencore Plc, said it expects tighter supply for zinc. Reports showed China’s official factory gauge matched a post-2012 high, while U.S. manufacturing expanded in November at the fastest pace in five months. Zinc, used to galvanize steel, has climbed 70 percent this year, beating the other raw materials as investors price in shrinking global supply after mines shut. Production will continue to trail consumption through 2018, according to report. Some investors who piled into last month’s metals rally are locking in some of their gains on the view that the surge driven by speculation of rising U.S. and Chinese demand moved too fast. TCs of domestic zinc concentrate (50%) were traded at 3,800-4,200 yuan per tonne (zinc content) this past week, with trading below 4,000 yuan per tonne (zinc content) increasing. Combined zinc inventories in Shanghai, Tianjin and Guangdong were down 2,200 to 223,000 tonnes this past week. Inventories in Shanghai fell further, while those in Guangdong were largely stable. Zinc stocks in Tianjin increased slightly. Technically market is under long liquidation as market has witnessed drop in open interest by -12.8% to settled at 6385 while prices down -8.05 rupee, now Zinc is getting support at 178.5 and below same could see a test of 176.7 level, And resistance is now likely to be seen at 183.6, a move above could see prices testing 186.9.

Trading Ideas:

Zinc trading range for the day is 176.7-186.9.

Zinc settled down as investors prepared for possible shocks in Europe ahead of an Italian referendum and Austrian election.

Orders to withdraw the metal from warehouses tracked by the London Metal Exchange rose to the highest since February.

Inventories in Shanghai fell further, while those in Guangdong were largely stable and Zinc stocks in Tianjin increased slightly.