Zinc settled up 0.12% at 127.95 as optimistic statements by the Chinese Premier should continue to lend solid support to prices. Global output of refined zinc was 4.3 million tons in the first four months of this year, trailing demand of 4.4 million tons, the International Lead & Zinc Study Group said. LME-tracked stockpiles shrank to the lowest since December 2010, bourse data showed. The US Federal Reserve Chairwoman Janet Yellen expressed they will maintain interest rates low in the near future and are optimistic toward US economy, boosting market confidence. The market will continue to absorb positive effects from Premier Li’s statement and the Fed’s interest rate decision. The US Federal Reserve kept its benchmark interest rate unchanged at 0-0.25% and curtailed bond purchases to USD 35 billion per month from USD 45 billion at the mid-day interest rate meeting, which dovetailed with market expectations. The US Fed indicated that US inflation is expected to rise to the 2.0% target with a rebound in the country’s economic growth and improving labor market. However, the Fed unexpectedly cut its outlook for US 2014 economic growth from 2.8%-3.0% to 2.1%-2.3% and announced to maintain a low interest rate in the long run, weighing down the US dollar. Investors should keep an eye on the US Philadelphia Fed’s manufacturing index for June and initial jobless claims for last week. Technically market is under fresh buying as market has witnessed gain in open interest by 7.52% to settled at 3001 while prices up 0.15 rupee, now Zinc is getting support at 127.1 and below same could see a test of 126.1 level, And resistance is now likely to be seen at 129, a move above could see prices testing 129.9.

Trading Ideas:

Zinc trading range for the day is 126.1-129.9.

Zinc settled firm as optimistic statements by the Chinese Premier should continue to lend solid support to prices.

Fed Yellen’s remarks on economy and job market following the policy meeting were welcomed by the market, allowing US stock prices to rise further

The number of US initial jobless claims last week and Philadelphia Fed’s June manufacturing index will be released today.