Zinc settled down -2.08% at 126.95 on concerns over Chinese growth and as the U. S. dollar strengthened. US factory orders and ISM non-manufacturing index will be announced today. Weakening LME zinc prices caused market pessimism to grow. LME zinc prices last Friday opened slightly higher at USD 2,070.5/mt, then dropped to USD 2,040/mt, and later hovering between USD 2,040-2,050/mt. As the US dollar index strengthened, LME zinc prices fell below the 10-day moving average, dipping to USD 2,025/mt, and finally closing at USD 2,027/mt, down USD 43/mt, or 2.08%. Two hawkish Fed officials Charles Plosser and Jeffrey M. Lacker and Fed Chairman Ben Bernanke expressed their support for the Fed's QE stimulus program in December's interest rate meeting and affirmed the US recovery. Plosser said he was more concerned about too-high inflation if banks start to quickly release the USD 2.4 trillion in excess reserves they now hold. Lacker expected inflation to rise back to 2% in the next one to two years. The inflation worries left them in favor of trimming the QE, sending the US dollar index up by nearly 4%. In China, the December PMI in non-manufacturing sectors dropped to a four-month low of 54.6. Enterprises thus had lower expectations towards Chinese economic prospect, a sign of slower growth in the world's second largest economy. Now Zinc is getting support at 126.2 and below same could see a test of 125.3 level, And resistance is now likely to be seen at 128.6, a move above could see prices testing 130.1.

Trading Ideas:

Zinc trading range for the day is 125.3-130.1.

Zinc dropped on concerns over Chinese growth and as the U. S. dollar strengthened.

China's non-manufacturing PMI dropped to the lowest since August, after two gauges of December factory output in China declined.

Zinc weekly stocks at Shanghai exchange came up by 3001 tonnes