Zinc on MCX settled up 0.91% at 188.9 as prices remained supported underpinned by supply concerns and a softer dollar. U.S. consumer spending accelerated in December as households bought motor vehicles and cold weather boosted demand for utilities amid a rise in wages, pointing to sustained domestic demand that could spur economic growth in early 2017. The International Lead and Zinc Study Group released its initial 2017 report, which found the global market for refined zinc metal was in deficit over the first 11 months of last year with total reported inventories declining over the same time frame. The ILZSG revealed a significant increase in Chinese output while the world’s zinc mine production fell overall by 1.2%.Chinese imports of zinc contained in zinc concentrates represented a 42.3% decrease compared to the same time frame in 2015 with the Far East nation’s net imports of refined zinc metal growing 7.9%. The euro zone economy has kicked off the year robustly, data from the Baltic to the Mediterranean showed on Monday, evidence for the European Central Bank that its massive cash stimulus is working but also posing questions about what comes next. U.S. President Donald Trump signed an order on Monday that will seek to dramatically reduce federal regulations, but the policy will not apply to most of the financial reform rules introduced by the Obama administration. Moves in metals were muted in Asian trade as China's week-long Lunar New Year holiday drained the markets of liquidity and direction. Technically market is under short covering as market has witnessed drop in open interest by -24.16% to settled at 3107, now Zinc is getting support at 187.5 and below same could see a test of 186 level, And resistance is now likely to be seen at 189.8, a move above could see prices testing 190.6.

Trading Ideas:

Zinc trading range for the day is 186-190.6.

Zinc gained as prices remained supported underpinned by supply concerns and a softer dollar.

The ILZSG revealed a significant increase in Chinese output while the world’s zinc mine production fell overall by 1.2%.

Global refined zinc metal production over the first eleven months of 2016 was at the same level as the corresponding period of 2015.