Base metals received support since last week following every day favorable announcement from China. Prices got boosted as more stimulus measures from China helped improve sentiment. Although the market remained worried about the pace of growth as well as further U.S. interest rate hikes that could dampen demand.
Federal Reserve Chair Jerome Powell reiterated that they are prepared to raise rates further if appropriate in his opening remarks at the annual Jackson Hole Economic Symposium on Friday. He further noted that they will proceed carefully when deciding to hike again or hold the interest rate steady.
Further, China had over the weekend unveiled more measures aimed at supporting its stock and property markets, which helped brew some optimism over an eventual economic recovery in the country. China halved stamp duty on stock trading in the latest attempt to boost struggling markets.
Now the focus will shift on purchasing managers’ index (PMI) numbers, due on Thursday and Friday. Chinese manufacturing activity is expected to have contracted for a third straight month in August.
Technical Outlook:
Zinc prices paused its two week losing streak. It was able to gain 2.48% at 217.05 compared to the previous week’s close of 211.35. Today, prices traded at 217.05, up 0.21%.
On the above chart, prices consolidating in between the range of 225.00-210.00 levels since Mid may 2023. Last week prices were able to gain from crucial support 210.00 and formed a bullish harami candlestick pattern. Which is indicating a bullish momentum in the near future.
However, it would need to cross immediate resistance 218.50 in order to test 222.50-225.00. Else, any dip towards 212.50-212.00 will attract buying activities.
Traders may go-long above 218.50 with stop loss below 210.00.