Zinc Dropped as the Market Worried about Economic Development

Zinc yesterday settled down by -3.99% at 313.1 as constantly rising US dollar index pressured the metals prices, and the market worried about economic development on high inflation and modest labour market evidenced by the latest US job market report. On the macro front, the latest data from the U.S. Bureau of Labor Statistics on Friday showed that the U.S. non-farm payrolls increased by 428,000 in April, better than the market expectation of 380,000. And in the return to normal employment and high inflation, the Federal Reserve rate hikes are becoming clearer, and long-term U.S. bond yields rose again, hence the dollar index continued to hit new highs for the year.   
 
Total zinc ingots inventories across seven markets stood at 276,000 mt as of Monday, May 9, down 5,100 mt from May 5 and 1,100 mt from April 29. Inventory of zinc continued to decrease this week. In Shanghai, goods can be picked up at warehouses with permits. The market was willing to receive goods under the falling zinc prices with increasing pick-ups, while the low arrivals in Shanghai helped the market to de-stock. In Tianjin, the arrivals were stable. Under the falling market and prices and improved consumption, the market inventory in Tianjin continued to decline.
 
Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.41% to settle at 1227 while prices down -13 rupees, now Zinc is getting support at 306.5 and below same could see a test of 299.8 levels, and resistance is now likely to be seen at 322.9, a move above could see prices testing 332.6.
 
Trading Ideas:
# Zinc trading range for the day is 299.8-332.6.
# Zinc dropped as the constantly rising US dollar index pressured the metals prices, and the market worried about economic development on high inflation
# Commerzbank (ETR:CBKG) sees zinc prices averaging $3,800/t in 2022, $3,950/t in 2023
# Inventories of zinc ingot across seven major markets in China decreased by 1,100 mt