Zinc settled down -0.36% at 125.60 as investors were waiting for the first testimony of new Fed Chair Janet Yellen. The slight rebound in US stock market failed to offer support to LME prices. Markets will focus on Janet Yellen's hearing late on Tuesday. This is Yellen's first hearing as chair of the Fed in which she will present her testimony on the monetary policy and US economic prospect. Markets are still dubious about whether the US Federal Reserve will carry on tapering its asset purchasing program given disappointing economic data during the past two months. Transactions for LME base metals overnight decreased, a sign of caution among investors. In Europe, French industrial output in December was down 0.3% on the month, but grew 0.5% YoY. Manufacturing output in December also increased 0.5% year-on-year, exceeding November's level. The euro zone Euro zone Sentix investor confidence rose to +13.3 in February, its highest since April 2011. These encouraging economic data revealed that the single currency bloc's economy is gradually emerging from recession, and boosted investor confidence towards its economic recovery. The euro accordingly rose for a fourth straight day, but still failed to break above last Friday's peak, and provided limited support to base metals. Technically market is under long liquidation as market has witnessed drop in open interest by -10.73% to settled at 2580 while prices down -0.45 rupee, now Zinc is getting support at 125 and below same could see a test of 124.4 level, And resistance is now likely to be seen at
126.7, a move above could see prices testing 127.8.

Trading Ideas:

Zinc trading range for the day is 124.4-127.8.

Zinc dropped on profit booking as trading was light as investors were waiting for the first testimony of new Fed Chair Janet Yellen.

Zinc producers are raising the premium they charge customers for refined metal as a shortfall begins to emerge due to mine closures and strong Chinese demand.

Mitsui Mining & Smelting, has also raised its zinc premiums for 2014 by around 70%, underpinned by rising demand