Zinc settled -1.71% down at 108.05 drifted lower on as worries over a worsening outlook for Europe's economy and slowing growth in China weighed, although signals that a US economic recovery was taking hold was expected to check losses. Market are now eyeing a ECB meeting and Friday's key US non-farm payrolls report for direction in trade thinned by a week-long national holiday in China. The euro zone's economic woes accelerated last month and China's slowdown looked likely to extend to a seventh quarter, while the US proved the bright spot with better than expected news on services and jobs. The ECB is expected to hold interest rates when it meets on Thursday to allow time for new details on the health of the euro zone economy and for Spain to ask for aid. Meanwhile world zinc mine production increased by 10.5%. This was principally due to a sharp 30.4% reported increase in Chinese output. Lower refined zinc metal output in Belgium, Brazil, Canada, China and South Africa more than balanced increases in Japan, the Republic of Korea, the Netherlands and Uzbekistan resulting in an overall reduction in global output of 1.4%. Usage in Europe declined by 3.7% and was marginally higher than during the first seven months of 2011 in both China and the US. For today's session market is looking to take support at 107.5, a break below could see a test of 106.9 and where as resistance is now likely to be seen at 109.1, a move above could see prices testing 110.2.

Trading Ideas:

Zinc trading range for the day is 106.88-110.18.

Zinc settled -1.71% down as worries over a worsening outlook for Europe's economy and slowing growth in China weighed

Shanghai Futures Exchange markets are shut this week due to holidays in China.

China's zinc concentrate imports jump by 51% in August