Zinc in Focus: Will zinc prices stop recent decline?

Zinc in Focus: Will zinc prices stop recent decline?

Zinc prices rose more than 1 percent yesterday as investors awaited a key US jobs report later in the day for clues on the timing of the central bank’s rate hikes.

Prices remained in a small rang as the traders stayed sidelines and wait for the release of the closely-watched monthly employment details from the United States. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing the Federal Reserve’s (Fed) future policy decisions, which, in turn, should provide a fresh impetus to the non-yielding yellow metal.

Expectations of Fed rate cuts in September rose after data this week hinted that the U.S. labour market was cooling.

The dollar hovered close to an eight-week low, making it cheaper to buy the greenback-priced commodity.

In start of the week, prices remained in a pressure and dropped near to May levels, as China’s manufacturing PMI was below market expectations, pointing to a contraction in manufacturing activity of the world’s largest metal consumer and dampening demand further.

As zinc is a vital building material, it has faced headwinds from property crisis in China where unsold home inventories hit an eight-year peak.

Consequently, Chinese authorities unveiled a historic support package, having lowered the minimum mortgage interest rate to 15% for first-time buyers and 25% for second-time buyers.

Coupled with hopes for interest rate cuts, these moves might bolster the commodity’s industrial outlook.

Technical Outlook – Zinc

The price of zinc rose by 1.34% yesterday. Prices rose to 262.20 and settled at 261.80.

Since May 29, 2024, prices have been on a downtrend, falling from a high of 279.50 to a low of 256.30. A trend reversal candlestick on the chart indicates a possible recovery in the near future.

On the upside, immediate resistance is 263.50 above that 265.00-266.50. on the downside, the support is 258.50-255.50.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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