Zinc settled up 0.59% at 128.25 amid speculation that demand for the metal will strengthen as economies accelerate. Demand outstripped supply in the refined zinc market for the third month running in November, leading to a deficit of 18,000 tonnes over the first eleven months of 2013, according to the International Lead and Zinc Study Group (ILZSG). The zinc market recorded an average monthly deficit of about 24,000 tonnes in the three months between September and November, driven by a surge in exports to China. In economic news, a report from Thomson Reuters and the University of Michigan on Friday showed U.S. consumer sentiment index to have dropped to 80.4 in January from 82.5 in December. Economists expected the index to climb to 83.5. The decrease was attributed to lowered expectations among lower- and middle-income families. U.S. housing starts in December fell 9.8 percent to an annual rate of 999,000 in December after jumping 23.1 percent to the revised November estimate of 1.107 million, a Commerce Department report showed Friday. Economists expected housing starts to drop to an annual rate of 985,000 from the 1.091 million originally reported for the previous month, reflecting a 9.7 percent decrease. Meanwhile, building permits fell 3.0 percent to an annual rate of 986,000 in December from the revised November rate of 1.017 million. Building permits, an indicator of future housing demand, had been expected to show a more modest 1.015 million decrease. Now Zinc is getting support at 127 and below same could see a test of 125.7 level, And resistance is now likely to be seen at 129, a move above could see prices testing 129.7.

Trading Ideas:

Zinc trading range for the day is 125.7-129.7.

Zinc gained amid speculation that demand for the metal will strengthen as economies accelerate.

The pace of U.S. home construction last year was the fastest since 2007, government data showed.

Zinc weekly stocks at Shanghai exchange came up by 2468 tonnes