Zinc settled down -0.7% at 135.4 on profit booking as investors were cautious before the release of minutes from the most recent FOMC meeting. The result of China’s CPI and PPI, released yesterday, came in positive, and markets already absorbed the positive impact from those figures in advance, putting the brakes on prices. China will hold the Central Economic Work Conference in late July. The existing mini-stimulus policies, the possibility of fresh incentive measures from the conference, and positive outlook for China’s economy, supporting the round of price gains, will all help base metal market regain the rising momentum. China’s trade balance surplus shrank to $31.6 billion in June, with exports and imports both rising less than forecast, government data showed. The Federal Reserve revealed in the minutes of its June meeting released Wednesday that the US economy would have gathered pace in the second quarter and that the country’s labor markets are also expected to be stable.  LME zinc prices opened at USD 2,275/mt overnight, and climbed to USD 2,313/mt, but fell back to USD 2270/mt as a large number of longs left the market, and closing the day at USD 2,270/mt, down USD 6/mt or 0.26%. Backwardation against LME zinc prices rose to USD 9.5/mt, which will give support to LME zinc prices. China's trade data, as well as the number of US initial jobless claims last week will be released today, which is optimistic. Technically market is under long liquidation as market has witnessed drop in open interest by -6.02% to settled at 6124 while prices down -0.95 rupee, now Zinc is getting support at 134.7 and below same could see a test of 133.9 level, And resistance is now likely to be seen at 136.9, a move above could see prices testing 138.3.

Trading Ideas:

Zinc trading range for the day is 133.9-138.3.

Zinc settled down on profit booking as investors were cautious before the release of minutes from the most recent FOMC meeting.

Investors held firm to the view that the metal will face shortages due to mine closures and is currently a good proxy for recovering global growth.

Zinc daily stocks at Shanghai exchange came up by 3740 tonnes.