Zinc settled up 0.6% at 142.9 as prices ended with gains due to positive US economic data. The zinc prices have already appreciated by nearly 17% YTD. During past month alone, the prices rose by nearly 11%. The world demand and supply balance for refined zinc will turn into deficit in 2014.  But only higher prices of the metal could ensure ample supplies to meet the demand.  The number of Germans without jobs rose unexpectedly by a seasonally adjusted 2,000, in relation to expectations for a 5,000 fall, presaging a choppy recovery in the euro zone economy. Germany’s unemployment rate for August, however, stayed at a seasonally adjusted rate of 6.7%, a low in more than 20 years and flat with July’s reading. The euro area’s economic climate index slid more than anticipated to 100.6 in August. These relatively weak economic reports echoed European Central Bank President Mario Draghi’s previous hints of more accommodative monetary policies to be unveiled in the euro zone. Profit at China’s large industrials in the first seven months totaled RMB 3.35 trillion, increasing 11.7% YoY, up 0.3 percentage point from the first six months. Profit in July dwindled slightly in July from June as a result of a fractional fall in main businesses and a slowdown in profit growth in some sectors. Nevertheless, industrial profit in July continued to grow at a moderate rate. But risk aversion will dominate the market due to escalating geopolitical turmoil. Technically market is under fresh buying as market has witnessed gain in open interest by 6.77% to settled at 5727, now Zinc is getting support at 142.5 and below same could see a test of 142.1 level, And resistance is now likely to be seen at 143.2, a move above could see prices testing 143.5.

Trading Ideas:

Zinc trading range for the day is 142.1-143.5.

Zinc settled up by 0.6% as prices ended with gains due to positive US economic data.

In the US, the GDP growth was reported at 4.2% for the second quarter, and the latest initial jobless claims came in lower than expected.

Zinc weekly stocks at Shanghai exchange came down by 417 tonnes.