Commodity Trading Tips for Zinc by KediaCommodity

Ajay Kumar Kedia 9 December 2013

Zinc Zinc settled down -0.22% at 115.75 as improving US labor market reignited worries over QE3-tapering and pushed the US dollar index up. The number of US non-farm employment in November increased 203,000, better than the 185,000 expected, with limited affect from the previous partial US government shutdown; US unemployment rate dropped to 7%, and the US Federal Reserve had expected the rate would fall to 7% at the end of 2013. University of Michigan’s CCI was also better than forecasts, surging to 82.5, up from 75.1, driving up LME zinc prices to hit USD 1,912/mt, closing at USD 1,901/mt, up USD 7.8/mt. China’s trade surplus hit USD 33.8 billion in November, its highest since February 2009, with exports exceeding both forecasts and October’s levels and staging a spike of 12.7% YoY. Imports, however, fell short of expectation and previous data, growing 5.3% from a year ago. Meanwhile, China introduced provisional rules for deposit receipts after last week’s new annuity policy for further interest rate liberalization and financial reforms. Market believed policies concerning deposit insurance would also be rolled out soon. As the US nonfarm payroll data beat forecasts and jobless data fell hit a 5-year low, Fed officials changed their tone towards the QE reductions, making it clear that the QE wind-down would be discussed at policy meetings in the futures. However, this did not cause panic in the market. This was probably because investors have admitted the Fed would finally exit from its stimulus measures and would unlikely raise short-term interest rate even if it decides to start slowing the asset purchases. Now Zinc is getting support at 115.1 and below same could see a test of 114.5 level, And resistance is now likely to be seen at 116.7, a move above could see prices testing 117.7.