Zinc yesterday traded with the positive node and settled 0.29% up at 105.25 as LME zinc market opened at $1,908/mt, and then rose mildly to $1,913/mt during European and US trading hours, supported by zinc price gains from a falling dollar. Later, the Spain's bond yield jumped to a 6-month high. As a result, LME zinc market closed lower at $1,908.8/mt. Market worries over the European debt issues remain. Coupled with the soaring yields on Spanish bonds, LME zinc market is expected to consolidate at $1,900/mt, with prices between $1,890-1,920/mt. The Greek opinion polls show that pro-bailout New Democracy party claimed a slight lead over anti-bailout Syriza party, helping improve market sentiment. The US dollar index dropped, sending metals prices up. Later, the US dollar index returned to around 82.40, given the lack of growth momentum in the Europe, worries over Spain's banking system, and borrowing costs in some European countries. As a result, metals experienced corrections along with profit-taking by investors. However, the news that Chinese government will introduce new stimulus measures gave support to the market. For today's session market is looking to take support at 104.9, a break below could see a test of 104.6 and where as resistance is now likely to be seen at 105.6, a move above could see prices testing 105.9.

Trading Ideas:

Zinc trading range for the day is 104.58-105.88.

Zinc prices ended with gains as the US dollar index despite news that Moody's cut the credit rating of 16 Spanish banks

Investors now expect Greece to stay in euro zone, risk aversion will stay due to surging debt yields and bank downgrades in Spain.

Zinc daily stocks at Shanghai exchange came down by 2618 tonnes