Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Zinc’s impressive rally is under significant downside pressure,
- Zinc’s impressive rally seems to have come to an end, as candlestick formed a large bearish engulfing pattern after bulls failed to breach a key resistance around 2800 area.
- Zinc’s last rally began in mid-February when price bottomed around 2580 area and since then it has reached 2800 area to test early February peak around the same level.
Trade optimism fueled the rally, while economic concern taking its toll,
- As positive news continued to hit the market from the ongoing trade negotiations between the United States and China; at first, it was a rumor, then President Trump announced that he is extending the tariff deadline from March 1st as significant progress have been made.
- Earlier this week, spokesperson of the Chinese People’s Congress announced that talks are moving in a positive direction. It was also reported that China is considering new laws to address American concern over Intellectual Property theft, which is very positive, since protecting IPs has been one of the sticking points in the negotiation.
- However, as economic numbers continue to point to a global economic slowdown, Zinc bulls lost the touch.
- The global measure of Citi's economic surprise index fell below its 2018 low and is now sitting at its lowest level in nearly 5 years.
- South Korea’s manufacturing PMI at 47.2 in February; lowest since June 2015
- Taiwan’s manufacturing PMI at 46.3 in February, the lowest in 39 months.
- China’s manufacturing PMI reported last week, also pointed to a contraction in the manufacturing sector.
- As per today’s release, China’s services PMI declined to 51.1 in February, the lowest since October 2018.
Zinc trade idea:
- Zinc price has formed a large bearish engulfing pattern in yesterday’s trading. Though the price is higher today, the bearish engulfing would keep the bears strong.
- We suspect, Zinc is very likely to correct further.
