Zinc yesterday traded with the positive node and settled 0.35% up at 101.6 as prices were supported after data showed Germany's GDP for 2Q was higher than expected. US retail sales during July rose 0.8%, much higher than the 0.2% expected, but expectations of QE3 implementation were pared. Meanwhile, the brief upturn of US economy will lower investor’s expectation on introduction of stimulus measures by the Fed, which may push up the US dollar index and weigh on prices. The US July PPI and retail sales data released later in the day were quite inspiring, easing market risk aversion, but weakened possibility of QE3 by the US on the other hand. In response, the US dollar index rose, limiting upward momentum of zinc prices. Gains though were tempered by strength in the U.S. dollar as signs of an tentative improvement in the U.S. economy reduced expectations the Federal Reserve could soon launch a third round of bond buying, or quantitative easing, to help the world's largest economy. Even after Tuesday's data, investors hope the central bank will renew bond purchases for a third round of quantitative easing to support the economy. In yesterday's trading session zinc has touched the low of 101.2 after opening at 101.25, and finally settled at 101.6. For today's session market is looking to take support at 101.2, a break below could see a test of 100.8 and where as resistance is now likely to be seen at 102, a move above could see prices testing 102.4.

Trading Ideas:

Zinc trading range for the day is 100.8-102.4.

Zinc gains as prices were supported after data showed Germany's GDP for 2Q was higher than expected.

US retail sales during July rose 0.8%, much higher than expected, but expectations of QE3 implementation were pared

Investors hope the central bank will renew bond purchases for third round of quantitative easing to support economy.