Base metals opened in red zone with recovering dollar amid tightening Chinese monetary policy kept market sentiments brittle. On LME, copper traded neutral while other metals lead, zinc and nickel continued their weak trend.
Zinc price fell to $2300 while lead prices managed to sustain above $2500. LME 3 month copper has strong support at $9200 while in nickel support lies at $25000.
The recent downside rally has been triggered by Chinese move to tighten the monetary policy to curb the inflation. In its fourth RRR hike this year, the People's Bank of China, raised limit that banks should hold as reserves by 50 basis points to a record high of 20.5 percent. The measure came after inflation jumped to a 32-month high of 5.4 percent in March.
Today, US housing data and building permits data will be released which will have strong impact on base metals prices.
Base Metals Technical View: Today, sideways to weak movement is expected.
