Zinc yesterday settled down -0.49% at 112.75 tracking LME zinc prices as better than expectations, and Goldman Sachs raised its expectations of US 2Q GDP growth to 2.2%, enhancing expectations that the US Federal Reserve will taper off QE3. European and US stocks closed with declines across the board, weighing down LME zinc prices, finding support at USD 1,850/mt, and finally closing at USD 1,853/mt, down USD 16.5/mt or 0.88 %. Richard Fisher, President of the Federal Reserve Bank of Dallas, Dennis Lockhart, President of the Federal Reserve Bank of Atlanta and Charles Evans, President of the Federal Reserve Bank of Chicago all hinted possible scaling back of QE3 in September and said July non-farm employment was neither good nor bad. US economic indicators released recently were largely positive, except last week's non-farm employment report. The effect of non-farm employment figures over the Fed's policy decision may not be as large as investors thought. Commodity prices generally fell on growing expectations that the Fed will begin to taper off QE3 in September. Trade deficit in the US fell from USD 45.03 billion to USD 34.22 billion in June, far better than forecasts. Exports rose to USD 191.17 billion, the largest growth since last September, while imports dropped to USD 225.4 billion. Technically market is under long liquidation as market has witnessed drop in open interest by -7.96% to settled at 2996 while prices down -0.55 rupee, now Zinc is getting support at 111.95 and below same could see a test of 111.15 level, And resistance is now likely to be seen at 114.05, a move above could see prices testing 115.35.
Trading Ideas:
Zinc trading range for the day is 111.2-115.4.
Zinc dropped as dollar index rose after US June trade deficit was USD 34.2 billion, better than expectations.
Goldman Sachs raised its expectations of US 2Q GDP growth to 2.2%, enhancing expectations that the US Federal Reserve will taper off QE3
US economic indicators released recently were largely positive, except last week's non-farm employment report.
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