Zinc yesterday settled down by -0.75% at 99.45 due to the sluggish China's economic data and Li Keqiang's statement expressing concerns over China's demand for metal, LME zinc prices failed to break through. As European and US major economic data most fell short of expectations, LME zinc prices were pushed down to dip to USD 1,811.8/mt. But as US NAHB house price index in May was better than forecasts, US stocks hit a new high, driving LME zinc prices, closing at USD 1,831.3/mt, down USD 12.8/mt or 0.69%. The US April industrial production dropped more than expected by a seasonally adjusted 0.5%. The capacity utilization rate slid to 77.8% from March's 78.3%. Factory output dipped 0.4% in April, the sharpest declines since last October. New York manufacturing activity contracted unexpectedly in May. These figures are signs that the world's largest economy slowed in Q1. On the other hand, NAHB's Housing Price Index for May beat expectations and employment also improved, lifting market sentiment. In response, US equities hit all-time highs across the board. ALso Li Keqiang, Premier of the State Council said yesterday that stimulus policy and government investment alone are not enough to accomplish this year's economic target. Market mechanism should play an important role. Now technically market is under fresh selling as market has witnessed gain in open interest by 5.88% to settled at 7811 while prices down -0.75 rupee, now Zinc is getting support at 98.45 and below same could see a test of 97.45 level, And resistance is now likely to be seen at 100.5, a move above could see prices testing 101.55.

Trading Ideas:

Zinc trading range for the day is 97.45-101.55.

Zinc ended lower on data showing the economic growth in the euro zone contracted in the first quarter

NAHB's Housing Price Index for May beat expectations and employment improved, supported market sentiment.

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