Zinc yesterday settled up 0.55% at 110.5 as dollar index dropped as US economic data released was disappointing. The global refined zinc market was in oversupply by 38,000 metric tons in the first five months of 2013, the International Lead and Zinc Study Group said. US Home Price Index rose less than expected by 0.7% in May, compared with April's downwardly revised 0.5% growth. Richmond Manufacturing Index fell unexpectedly in July to -11. Downbeat figures caused the US dollar index to drop for a third straight day, lending support to base metals prices. Chinese Premier Li Keqiang again underscored pro-growth policy during his tour to Guangxi. He said efforts should be made to step up investment in railway construction so as to promote social financing. Investment and Financing System Reform in Railway Sector will be forwarded to the State Council before September and will likely be implemented at the end of this year. China Railway Corporation issued RMB 20 billion worth of 10-year railway bonds yesterday, with bid interest rate at 4.15%-5.15%. This boosted base metals prices and China's stock market. It was reported that Premier Li Keqiang said the Chinese government will not tolerate a less than 7% economic growth, alleviating worries over a steep downshift in the Chinese economy. Technically market is under short covering as market has witnessed drop in open interest by -1.63% to settled at 3146 while prices up 0.6 rupee, now Zinc is getting support at 110.00 and below same could see a test of 109.50 level, And resistance is now likely to be seen at 110.80, a move above could see prices testing 111.10.

Trading Ideas:

Zinc trading range for the day is 109.5-111.1.

Zinc yesterday settled up as dollar index dropped as US economic data released was disappointing.

ILZSG: Global Zinc Market In 38,000-Ton Surplus Jan-May

Zinc daily stocks at Shanghai exchange remained unchanged