Zinc settled down -0.11% at 137.80 on profit booking as traders remain cautious ahead of the release of US retail sales, manufacturing data and Fed Chairwoman Janet Yellen’s statement. While earlier in the day Zinc prices rallied to test
139.10 climbed to a 35-month high as inventories extended a slump amid signs of higher demand. Stockpiles monitored by the London Metal Exchange have dropped 29 percent this year to the lowest since December 2010. Demand for refined zinc will exceed output by 250,000 metric tons this year.

Also commodity consumption may climb in China, the world’s biggest user of industrial metals, Morgan Stanley said on July 11. From the economy front Eurozone industrial output declined 1.1% MoM in May, the biggest fall in 20 months. Meanwhile, European Central Bank President Mario Draghi reiterated at a quarterly policy meeting that the ECB will introduce quantitative easing (QE) if need be. The International Monetary Fund agreed to this move, citing that it will help pull out the euro zone from the current economic downturn.

Investors are expected to be cautious on Tuesday before the release of US Federal Reserve Chair Janet Yellen’s testimony and China’s economic data. Technically market is under long liquidation as market has witnessed drop in open interest by -2.97% to settled at 6607 while prices down -0.15 rupee, now Zinc is getting support at 137.3 and below same could see a test of 136.6 level, And resistance is now likely to be seen at 138.9, a move above could see prices testing
139.8.

Trading Ideas:

Zinc trading range for the day is 136.6-139.8.

Zinc dropped on profit booking after prices jumped to their highest level in three years amid prospects of falling mine supply

Stockpiles monitored by the London Metal Exchange have dropped 29 percent this year to the lowest since December 2010.

Demand for refined zinc will exceed output by 250,000 metric tons this year