Zinc yesterday traded with the positive node and settled 0.58% up at 102.95 tracking LME zinc prices plummeted below USD 2,000/mt to hit an intraday low of USD 1,988/mt during Asian trading hours yesterday. The US Federal Reserve (Fed) Chairman Ben Bernanke said that the US economy needs to grow more quickly to get unemployment down, leading investors to take on more risk on hopes the Fed could conduct another round of quantitative easing. As a result, the US dollar softened and the euro strengthened, helping boost LME zinc prices to close at USD 2,027/mt, up USD 18/mt. Bernanke's comments fanned expectations for more asset purchases by the Fed, which may temper market concerns. Bernanke said Monday that, although the US unemployment rate improved, the Fed will keep its accommodative monetary stance, heightening market expectations about the implementation of QE3 measures. In response, the US dollar slid below 79, lifting the euro to a three-week high. Risk assets on commodity markets surged all across the board, with prices of base metals, precious metals, crude oil, and US equities increasing. LME prices advanced all the way in the evening, and continued to trend higher after breaking resistance at recent moving averages. Nevertheless, the US later announced its pending home sales in February fell by 0.5%, softer significantly than a surge of 1% expected by markets, an indication that a substantive improvement in the US housing market need more days.For today's session market is looking to take support at 102.3, a break below could see a test of 101.7 and where as resistance is now likely to be seen at 103.3, a move above could see prices testing 103.7.

Trading Ideas:

Zinc trading range for the day is 101.68-103.68.

Zinc prices gained as US dollar softened and the euro strengthened after Fed chairman’s comments

Ben Bernanke said that the US economy needs to grow more quickly to get unemployment down

Bernanke said that, although US unemployment rate improved, Fed will keep its accommodative monetary stance