Zinc settled down -1.34% at 124.80 fell the most in eight weeks amid signs of a slowing economy in China and speculation that the Federal Reserve will curb U. S. monetary stimulus, damping prospects for metal demand. In December, China's producer prices, a measure of the cost of goods as they leave the factory, extended the longest slide since the 1990s, adding to evidence that the economy weakened. Fed officials saw diminishing economic benefits from the its debt purchases, according to minutes of last month's policy meeting released yesterday. The Fed cut its monthly bond-buying by $10 billion to $75 billion at the meeting, citing labor-market gains. Improvements in the economy may be prompting employers to retain workers. Applications for unemployment benefits fell 15,000 to 330,000 in the week ended Jan. 4, the lowest in a month, a government report today showed. Economic indicators reported on Thursday exerted limited influence on base metals prices. The euro zone business and consumer confidence in December rose to its highest since July 2011, and Germany's industrial production gained more than expected during November. Spain's government bond sales also turned out successful. However, the ECB decided to leave monetary policy unchanged and the ECB Chief Mario Draghi said the central bank will keep interest rate low for quite some time if necessary, weighing on the market and affecting movements of the euro. Technically market is under long liquidation as market has witnessed drop in open interest by -0.14% to settled at 2926 while prices down -1.7 rupee, now Zinc is getting support at 124.1 and below same could see a test of 123.3 level, And resistance is now likely to be seen at 126.2, a move above could see prices testing
127.5.

Trading Ideas:

Zinc trading range for the day is 123.3-127.5.

Zinc dropped after data showed that consumer price inflation in China slowed to a seven-month low in December.

Data showed that consumer price inflation in China slowed to a seven-month low of 2.5% in December from 3% in November

Zinc daily stocks at Shanghai exchange came down by 226 tonnes