Zinc yesterday traded with the positive node and settled 2.17% up at 110.45 hitting highest levels in four months as hopes that the US and China will roll out more stimulus measures offset a slight decline in China's August imports. Market players said base metals were mostly bolstered in the session by expectations of the Fed embarking on another round of bond purchases, also known as QE3, next week. The chances of this have jumped after disappointing August U.S. employment numbers released on Friday. Markets still saw glimmers of hope that China's central bank would take actions due to its weak economic data, showing that imports for August fell 2.9% MoM in the face of sluggish downstream orders and weakening financing demand. China's industrial production rose 8.9% but lower than July's 9.2%, and also the smallest gain in 39 months. As markets anticipations over QE3 measures have recently increased, longs have entered markets actively, but this kind of price increases is unstable. In addition, rebounds in base metals have gradually neared resistance levels, investors should be cautious that rebounds may be short-lived. US consumer credit has dropped for the first in 11 months, while George Soros said Germany's economy will slip into recession within half a year. For today's session market is looking to take support at 108.6, a break below could see a test of 106.8 and where as resistance is now likely to be seen at 111.7, a move above could see prices testing 112.9.

Trading Ideas:

Zinc trading range for the day is 106.78-112.88.

Zinc gains following their global counterparts as hopes of monetary stimulus from China and US firmed sentiments.

China's industrial production rose 8.9% in August from a year earlier, lower than July's 9.2%,

Downbeat US nonfarm payrolls in August also pushed hopes for QE3 by Fed in its interest rate meeting this Wednesday