A weaker currency and expectations of increased demand led to a rise in zinc prices

A weaker dollar and positive expectations for rising demand propelled zinc’s slight advance of 0.35%, which saw it settle at 227.95. With the central bank and financial authorities promising to provide funding and handle local government debt issues, Chinese officials gave the country’s real estate industry a boost. With a total debt of 92 trillion yuan ($12.77 trillion), the pledge intends to promote the economy while reducing financial risks related to a property crisis.

Zinc demand is positively impacted by efforts to maintain the real estate sector. Refined zinc output in China grew significantly, with a month-over-month increase of 11.14% and an annual spike of 17.6% in October, to 604,600 mt. The manufacturing of zinc alloys domestically increased significantly in October, suggesting that the metal is being produced in a healthy atmosphere.

Still, there are some restrictions on the market’s upside due to worries about possible output reductions by zinc smelters in Yunnan as a result of power rationing. According to LME data, substantial arrivals following months of declining stocks caused zinc inventories in warehouses approved by the LME to nearly double.

Technically, there is a short covering event in the market as seen by the -20.21% decline in open interest and the 0.8 rupee price increase. Support is located at 226.8, with a possible downside test of 225.5, while resistance is expected at 229.5, with an upward test of 230.9.

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