Zinc settled up 0.88% at 142.5 as investors sought more exposure to commodities with tightening supply-demand balances and were encouraged by falling inventories and firm equity markets. US June CPI was up 2.1% YoY, flat with market expectations, but signaling US economy is recovering. US home price index in May topped market expectations, boosting market sentiment. Falling LME zinc inventories caused market optimism to grow, and attracted speculative capital to inflow to the market.  London Metal Exchange stocks of zinc fell by 400 tonnes to 656,275 tonnes, their lowest in 3-1/2 years. Investors are slowly being drawn back into commodities, attracted by stronger global economic growth and more volatility within some sectors, typified by current investment flows out of grains into industrial metals. Forecasts for zinc prices have been driven higher this year by a paucity of big mine projects just as existing mines such as Century in Australia dry up. Also, data showed China's zinc imports rose 123.55 percent in June year on year to 68,475 tonnes, bringing gains for the year to 38.14 percent. Three-month zinc on the London Metal Exchange rose to $2,373, the highest since August 2011, before trading at $2,369 a tonne in official midday rings, up 1.41 percent for the day. That level brings gains for the year to around 15 percent. Technically market is under short covering as market has witnessed drop in open interest by -3.68% to settled at 6801 while prices up 1.25 rupee, now Zinc is getting support at 141.7 and below same could see a test of 140.8 level, And resistance is now likely to be seen at 143.1, a move above could see prices testing 143.6.

Trading Ideas:

Zinc trading range for the day is 140.8-143.6.

Zinc rose as investors sought more exposure to commodities with tightening supply-demand balances.

Forecasts for zinc prices have been driven higher this year by a paucity of big mine projects just as existing mines such as Century in Australia dry up.

Zinc daily stocks at Shanghai exchange came down by 1755 tonnes.