LME three-month zinc is approaching the upper end of its two-month trading range. The $3,560-3,650 zone has capped rallies in late May and early June. A close above $3,600 on good volume would signal a breakout toward the April high of $3,720, which would be the highest since September 2024.
The $3,400 level has proven reliable support, coinciding with the 50-day moving average. Each test of $3,400 in the past month has resulted in a quick recovery with above-average volume. The 20-day MA at $3,470 is the first line of defense on intraday dips.
The RSI at 55 is in constructive territory, leaving room for further upside before reaching the 70+ overbought threshold. The MACD is positive and rising. The histogram is printing expanding green bars, confirming increasing bullish momentum. The ADX at 28 indicates the trend is gaining strength.
Open interest on LME zinc is steady at 165,000 lots, suggesting conviction on both sides. Positioning data from the CFTC shows managed money is net long roughly 12,000 lots, up from 8,000 a month ago. The increase in speculative longs aligns with the improving technical picture.
Zinc is setting up for a potential breakout. Buyers should be proactive: layer hedges on any dip toward $3,470-3,500 (20-day MA zone). If $3,600 breaks on a weekly close, the next resistance is $3,720. Cover at least 50% of Q3 requirements at current levels to avoid chasing a breakout.