Zinc yesterday traded with the negative node and settled -0.61% down at 99 as concerns over European debt crisis weighed down metal prices. Sources report that Spanish government is considering applying for loans from the European Union’s rescue fund and the IMF to finance the restructuring of the country’s financial industry, and European commercial banks' overnight deposits at the ECB hit a new record high on January 3rd, both triggering market fears of European debt crisis. In response, European financial markets weakened, and US dollar index climbed, with LME base metal prices falling as a result. In general, European debt crisis and the possibility that the euro zone economy will slip into recession will be major factors restricting the upward room for metals prices. Meanwhile, the result of German bond auction was poor, heightening market lingering concerns over the global economic growth. In response, the euro slumped and dragged down commodity markets. Besides, the US later announced factory orders were softer than expected, causing investors to turn to dollar for a safe-haven given the disturbing Europe's debt crisis.For today's session market is looking to take support at 98.5, a break below could see a test of 98 and where as resistance is now likely to be seen at 99.7, a move above could see prices testing 100.3.

Trading Ideas:

Zinc trading range is 98-100.3.

Zinc traded with the negative node as concerns over European debt crisis weighed down metal prices.

Meanwhile, the result of German bond auction was poor, heightening market lingering concerns over the global economic growth.

US factory orders were softer than expected, causing investors to turn to dollar for a safe-haven.