Zinc yesterday traded with the negative node and settled -1.53% down at 111.2 with same effect LME zinc prices overnight fell USD 20/mt, and finally closed at USD 2,480/mt. Transactions improved upon the return of China from Chinese New Year holiday. Trading volumes increased by nearly 20,000 lots to 81,460 lots, and total positions increased by 38 lots to 238,873 lots. The US dollar index moved between 77.5 and 78 yesterday, but LME zinc prices found resistance at USD 2,500/mt. China's central bank announced interest rate hike in the early of 2011, implying the government is determined to curb inflation. In yesterday's trading session zinc has touched the low of 110.85 after opening at 112.15, and finally settled at 111.2. For today's session market is looking to take support at 110.4, a break below could see a test of 109.6 and where as resistance is now likely to be seen at 112.5, a move above could see prices testing 113.7.

Trading Ideas:

Zinc trading range is 109.6-113.7.

Zinc ended weak amid weak trend at the LME and subdued domestic demand weighed

Zinc looks to take resistance at 112.40 and support is at 110.10 level.

Zinc daily stocks at Shanghai exchange came up by 810 tonnes.