Zinc climbed nearly 2 percent, taking this year's gains to 69 percent as investors poured funds into metals in expectation of inflation in China and the United States, and on signs of growing strength in the U. S. manufacturing sector. Bets that the U. S. will raise rates in December and again next year pushed up the dollar, adding to the allure of commodities for investors seeking a hedge against inflation. Meanwhile, China fixed its yuan midpoint at the weakest since June 2008, which also encouraged mainland investors to chase commodities as a hedge against further dollar strength amid lower yields in other asset classes and a steadily improving fundamental picture. New orders for U. S. manufactured capital goods rebounded in October, driven by rising demand for machinery and a range of other equipment, the latest indication of an acceleration in economic growth. The demand picture in Europe also brightened. Euro zone business activity expanded the most in nearly a year in November, stirring some optimism that economic momentum is picking up again. The worldwide zinc market has recorded small surplus during January to September this year. It must be noted that the zinc market had ended in surplus in the whole of 2015. As per WBMS data, the global zinc market recorded marginal surplus of 54 kt during the initial nine months of the year from January to September. It should be noted that the worldwide zinc market had reported a surplus of 100 kt during the entire year 2015. Technically market is under short covering as market has witnessed drop in open interest by -12.25% to settled at 7845, now Zinc is getting support at 184.6 and below same could see a test of 181.8 level, And resistance is now likely to be seen at 189.2, a move above could see prices testing 191.

Trading Ideas:

Zinc trading range for the day is 181.8-191.

Zinc rallied as investors poured funds into metals in expectation of inflation in China and the United States.

Euro zone business activity expanded the most in nearly a year in November, stirring some optimism that economic momentum is picking up again.

The worldwide zinc market has recorded small surplus during January to September this year.