Commodity Trading Tips for Zinc by Kedia Commodity

Ajay Kumar Kedia 19 July 2013

Zinc Zinc yesterday settled flat at 109.60 tracking LME zinc prices as the market continued to absorb Ben Bernanke's statement, with the US dollar index climbing to break through 83. Prices of new homes in 63 of 70 large and medium-sized Chinese cities rose in June from May vs 65 in May. The property market has been sluggish, and government officials expressed their resolution to adjust industry structure. Demand for zinc shrank, increasing short momentum, pushing down LME zinc prices to find support at USD 1,850/mt, dipping to USD 1,846.3/mt. Both US initial jobless claims and Federal Reserve Bank of Philadelphia's manufacturing index were positive, boosting US stocks to close with gains, with Standard & Poor's 500 Index hitting record highs. US Labor Department announced July 18 that the number of initial jobless claims for the week decreased by 24,000, to 334,000, lower than the 345,000 expected, and employment data also improved significantly. Besides, Federal Reserve Bank of Philadelphia's manufacturing index in July was also much better than expectations, hitting 19.8, its largest growth since 2003. US manufacturing is recovering rapidly, and is expected to be a major force boosting US economic growth and job market. In this context, the US dollar index was pushed up, while non-US dollar currencies generally dropped. But US Conference Board leading indicator was 0.0%, lower than the 0.3% expected, and recent consumption data also shows US consumption growth is slowing, which caused many investment banks to lower US GDP growth expectations significantly. Technically market is getting support at 108.80 and below same could see a test of 108.103 level, And resistance is now likely to be seen at 110.00, a move above could see prices testing 110.503.