Zinc prices closed mostly with losses yesterday. Today, it’s trading at 270.90 down 0.90%. Rising dollar and US Bond yield after the Federal Reserve released the minutes of the meeting weighted on the sentiment.
Zinc prices hovered slightly above a three day’s low after the FOMC meeting minutes. The minutes of the Fed’s February meeting, released on Wednesday, showed that most members of the monetary policy committee supported raising interest rates for longer this year. But their calls for 25 basis point hikes were regarded as outdated, given that data after the Fed’s meeting showed that inflation remained much stickier than expected.
Dollar rose to a new six-week high against a basket of currencies. Rising interest rates push up the opportunity cost of holding non-yielding assets such as gold and other precious metals.
A revised reading on fourth-quarter U.S. GDP is due later in the day, with any continued signs of resilience in the economy giving the Fed more headroom to keep raising interest rates. Stronger-than-expected readings on business activity furthered such a notion this week.
US Treasury yields rose after the minutes were released, so did the US dollar index. During a meeting with Russian Foreign Minister Sergei Lavrov, Wang Yi, director of China’s International Communication Office of the Central Committee, said that China was willing to maintain the sound development of the “new type of major-power relationship” with Russia regardless of the changing international situation.
Technical –
On the daily chart, ZINC Future retreated from 276.95 on 21 February 2023, and traded at 271.25, down 0.77%. Since 14 February 2023, prices have been struggling to cross its previous swing resistance and founding support around 268-265 levels.
Adding to this, ZINC future is yet trading below its 100
All above technical aspects are creating a probability for a bearish momentum in the near future. But, ZINC prices would need to break 268 in order to test next support 265-262.
Alternatively, any rise towards 276-277.50 could attract selling activities, unless Zinc gives a closing above 281.50.