Zinc yesterday traded with the positive node and settled 0.14% up at 110.20 tracking LME zinc prices which settled at USD 2,051.5/mt. China's December PMI released during Asian trading was up 2.5%, while PPI was up -1.9%, worse than expected. As a result, market optimism was depressed, with LME zinc prices entering downward track after opening. Last Friday, markets were weighed down by Chinese economic figures, despite optimistic comments from the European Central Bank (ECB). It was reported that net capital flows in the US reached USD 19 billion in the week ending January 11, a fresh high since Jun 2008, which helped US equity market stop falling. Meanwhile, Italian government bond auction was successful with 3-year bond yield slipping to the lowest level in three years, and sent the US dollar index plunging to the lowest since April 2012. However, all these did not seem to reassure markets as prices extended losses. In the week ahead, traders are expected to remain focused on the outlook for Federal Reserve monetary policy, as well as political developments in the US, with negotiations on raising the US debt ceiling still to come in February. In yesterday's trading session zinc has touched the low of 110.05 after opening at 110.1, and finally settled at 110.2. For today's session market is looking to take support at 110.1, a break below could see a test of 110 and where as resistance is now likely to be seen at 110.3, a move above could see prices testing 110.4.

Trading Ideas:

Zinc trading range for the day is 109.97-110.37.

Zinc ended with small gains but upside was seen limited as China's PPI was up -1.9% depressing market optimism

U. S. government reported earlier that the country's trade deficit widened unexpectedly in November.

Zinc weekly stocks at Shanghai exchange came down by 330 tonnes