When Mercutio says "zounds", it means anger.
Zounds means "expressing surprise or indignation".
Romeo's hesitation to engage in combat in response to Tybalt's taunts enrages Mercutio in Act 3, scene 2. Romeo's wish to avoid a battle is perceived by Mercutio as a cowardly move, and he calls it "calm, despicable, filthy submission!" He was in a mood to fight.
Thus, zounds means anger when Mercutio said it.
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