Zinc settled down -1.46% at 138.30 lower on Thursday after Chinese inflation data fanned worries about growth in the world's largest metals consumer. Losses in recent days, mainly due to a buoyant dollar, deepened after data showed that China's consumer inflation cooled more than expected in August, further evidence that the economy is losing momentum. Weak Chinese data had helped support markets on the bet that authorities would unleash new stimulus measures, but investors are becoming increasingly worried. China’s CPI rose 2.0% YoY in August, shy of market expectations for 2.2% and down from 2.3% in July, and its PPI fell 1.2% YoY, down for a 30th month in a row. These soft economic data, however, failed to raise expectations for stimulus policies due in large part to the Chinese Premier’s comments that the government will no longer rely on creating money to boost economic growth. The US Labor Department reported on Thursday that initial jobless claims for the week ending September 6 increased 11,000 to 315,000, a high last seen in the week ending June 28 and beating the estimated 300,000. Despite the downbeat jobs conditions, the US dollar index still rebounded after testing support at the 5-day moving average. The EU announced new sanctions on Russia oil and national defense sectors on Thursday, but could lift them if Moscow abides by a ceasefire agreement. The sanctions include tightening Russian access to EU capital markets, increasing restrictions on exports, and reducing loans to some state-owned banks and companies. Technically market is under long liquidation and getting support at 136.9 and below same could see a test of 135.5 level, And resistance is now likely to be seen at 140, a move above could see prices testing 141.7.

Trading Ideas:

Zinc trading range for the day is 135.5-141.7.

Zinc prices dropped as the strengthening dollar and signs of a slowing Chinese economy raised prospects of slowing demand.

Data showed Chinese consumer prices cooled more than expected in August, providing more evidence of economic slowdown.

Zinc daily stocks at Shanghai exchange came down by 897 tonnes.