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Gold

Gold prices rose by 0.37% to settle at ?72,039, driven by signals from Federal Reserve Chair Jerome Powell indicating that the central bank may soon begin easing interest rates. In his speech at the Jackson Hole Central Bank Symposium, Powell highlighted that the risks to inflation have diminished while concerns about the labor market have grown. He struck an optimistic tone, suggesting that the Federal Reserve could manage inflation while continuing to support the broader economy and labor market. Echoing this sentiment, Boston Fed President Susan Collins also signaled support for an upcoming rate cut, noting that inflation reduction efforts have shown promising results, making it appropriate to consider easing monetary policy soon. On the global front, Mali's gold reserves fell by 17% between 2022 and 2024, down to 731 metric tons, according to the country's mines ministry. This decline comes amid a rally in gold prices, which has suppressed demand across major Asian markets. In China, dealers were offering deeper discounts ranging from $18 to $3 per ounce to attract buyers, a shift from the previous week's $8.5 discount to a $5 premium. Indian dealers also increased discounts to up to $6 an ounce over official domestic prices. Additionally, imports to China and India in July were down 58% year-on-year, although year-to-date volumes remain up by 5% due to a strong start to the year. Technically, the gold market is experiencing fresh buying interest, with open interest rising by 0.66% to settle at 16,968 contracts. Gold is currently supported at ?71,780, with potential testing of ?71,520 if this support level is breached. On the upside, resistance is expected at ?72,275, with further gains possibly pushing prices toward ?72,510.

Trading Ideas:
* Gold trading range for the day is 71520-72510.
* Gold gains as Fed’s Powell signals that the central bank is ready to start easing interest rates.
* Fed’s Powell said that the upside risk to inflation has diminished and risks to the labor market have grown.
* A rally in gold prices stifled demand in major Asian hubs, with dealers offering deeper discounts to charm buyers
 

Silver

Silver prices rose by 0.54% yesterday, closing at ?85,668, as Federal Reserve Chairman Jerome Powell signaled a likely interest rate cut at the upcoming September meeting during his speech at the Jackson Hole Economic Symposium. Powell pointed out that the U.S. labor market is cooling rapidly, supported by the softer jobs report from July and the recent downward revision to payroll figures. He also emphasized the Federal Reserve's increased confidence that inflation is moving closer to its 2% target, suggesting that it may be time to adjust monetary policy to less restrictive conditions. This dovish stance was echoed by other Fed officials, including Philadelphia Fed President Patrick Harker and Kansas City Fed President Jeffrey Schmid, who both hinted at the need for a methodical and well-signaled rate-cutting approach. On the geopolitical front, ongoing conflicts in the Gaza Strip have dampened hopes for a ceasefire, adding further uncertainty to global markets. India's silver market also played a significant role in supporting prices. The country's silver imports are expected to nearly double this year due to rising demand from solar panel and electronics manufacturers, as well as increased investment in the metal as a hedge against gold. In the first half of 2024 alone, India imported 4,554 tons of silver, a massive increase from 560 tons in the same period last year, reflecting strong demand as industrial buyers replenish depleted inventories from 2023. Technically, silver is experiencing short covering, with open interest dropping by 5.12%. The metal finds immediate support at ?84,960, with further support at ?84,245. On the upside, resistance is expected at ?86,280, with a potential move towards ?86,885 if the bullish momentum continues.

Trading Ideas:
* Silver trading range for the day is 84245-86885.
* Silver gains as Fed chairman Powell clearly signals rate cut in September
* The Chairman noted that the US labor market is cooling quickly following the softer jobs report from July.
* India's silver imports to double on demand for solar, investment.

Crude oi

Crude oil prices surged by 3.02% yesterday, closing at ?6,483, driven by escalating tensions in the Middle East, which raised concerns about potential disruptions to oil supply. Over the weekend, the situation intensified with missile exchanges between Israel and Hezbollah, particularly after the assassination of a Hezbollah commander. This heightened the risk of a broader regional conflict, contributing to the bullish momentum in crude prices. Additionally, Iraq reaffirmed its commitment to the OPEC+ agreement to voluntarily reduce crude oil production, aiming to stabilize global oil markets. The Iraqi Ministry of Oil stated that it had taken concrete steps to cut production levels while compensating for overproduction in previous months. OPEC reported that Iraq's cumulative overproduction between January and July was 1.4 million barrels per day (bpd), with plans to rectify this by September 2025. Kazakhstan also committed to addressing its overproduction of 699,000 bpd within the same timeframe. On the demand side, Morgan Stanley lowered its global oil demand growth forecast for 2024 to 1.1 million bpd, down from 1.2 million bpd, citing China's slower economic growth, increased electric vehicle adoption, and a rise in LNG-powered trucks. The bank also revised its Brent price forecast for Q4 2024, now expecting prices to average $80 per barrel, down from the previous forecast of $85. In the U.S. Crude stocks fell by 4.6 million barrels, exceeding expectations, while gasoline and distillate inventories also saw larger-than-expected declines. Technically, the crude oil market is under short covering, with open interest dropping by 15.88%. Crude oil finds immediate support at ?6,362, with further support at ?6,242. On the upside, resistance is expected at ?6,559, with potential testing of ?6,636 if the bullish momentum continues.

Trading Ideas:
* Crudeoil trading range for the day is 6242-6636.
* Crude oil gains due to supply risk concerns amid escalating Middle East tensions.
* U.S. crude stocks, gasoline and distillate inventories fell in the week ending August 16.
* Iraq renews commitment to OPEC+ output cut agreement

Natural gas

Natural gas prices fell by 2.49% to settle at ?164.7, driven by forecasts of lower demand this week than previously anticipated. Despite this drop, there remains approximately 12% more gas in storage than usual for this time of year. This is notable given that weekly builds have been smaller than normal in 13 of the past 14 weeks, including a rare decline during one week in August. The decline in prices occurred despite expectations for hotter-than-normal weather over the next two weeks, which would typically increase demand for natural gas as power generators burn more gas to power air conditioners. According to LSEG, gas output in the U.S. Lower 48 states has decreased to an average of 102.3 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July. Weather forecasts predict that conditions across the country will remain mostly hotter than normal through September 7. LSEG also forecasts that average gas demand in the Lower 48, including exports, will rise from 101.2 bcfd this week to 103.9 bcfd next week before slightly declining to 103.3 bcfd in two weeks. On the supply side, gas flows to the seven major U.S. LNG export plants have increased to 12.9 bcfd in August, up from 11.9 bcfd in July. However, U.S. utilities added 35 billion cubic feet of gas into storage during the week ending August 16, 2024, exceeding market expectations of a 27 billion cubic feet increase. Technically, the market is experiencing long liquidation, with open interest dropping by 13.27% to settle at 16,656 contracts. Natural gas is currently supported at ?161.9, with a potential test of ?159.1 if this support level is breached. On the upside, resistance is expected at ?168.6, with further gains possibly pushing prices towards ?172.5.

Trading Ideas:
* Natural gas slid on forecasts for lower demand this week than previously expected.
* Despite smaller weekly builds, there was 12% more gas in storage than usual.
* LSEG reported a drop in gas output in the Lower 48 US states to 102.3 bcfd in August.

Copper

prices rose by 0.36% yesterday, closing at ?813.85, supported by declining metal inventories and easing concerns over a potential U.S. economic recession. Signs of improving demand in China also contributed to the positive sentiment. The Shanghai Futures Exchange reported a 4.3% decline in copper inventories, reflecting a tighter supply environment. This tightening comes despite a recent surge in Chinese copper exports, which had previously pressured the market. In June, China exported an unprecedented 158,000 metric tons of refined copper, leading to first-half exports of 302,000 tons, the highest since 2019. However, the export surge appears to be cooling, with outbound shipments falling to 70,000 tons in July, and Shanghai Futures Exchange stocks have been declining since early July. On the global front, the International Copper Study Group (ICSG) reported a surplus of 95,000 metric tons in the refined copper market for June, up from 63,000 metric tons in May. For the first half of the year, the market recorded a surplus of 488,000 metric tons, significantly higher than the 115,000 metric tons surplus during the same period last year. World refined copper output in June was 2.31 million metric tons, while consumption stood at 2.21 million metric tons. China's copper imports in July slid by 2.9% year-on-year to 438,000 metric tons, reflecting subdued demand and high inventory levels. Despite this, copper concentrate imports for the first seven months of the year were up 4.5%, indicating ongoing production activity. Technically, the copper market is experiencing fresh buying, with open interest increasing by 19.65%. Copper finds immediate support at ?810.5, with further support at ?807.1. On the upside, resistance is likely at ?816.8, with potential testing of ?819.7 if the bullish momentum continues.

Trading Ideas:
* Copper trading range for the day is 807.1-819.7.
* Copper gains supported by falling metal inventories, and demand showing signs of improvement in China.
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 4.3% from last Friday.
* China produced 5.9 million tons of refined copper in the first half of the year.

Zinc

prices increased by 0.37% to settle at ?270.15, driven by the prospects of reduced supply and an anticipated seasonal boost in demand. The recent price rally is primarily due to an agreement among 14 major Chinese zinc smelters to cut production in response to falling treatment charges (TCs), which have significantly reduced profit margins. These treatment charges for zinc concentrates have hit historical lows, reflecting the tight supply in the market. Consequently, Chinese smelters have already curtailed production in July and August, leading to a 9.2% decline in China’s zinc output in July compared to June, resulting in the lowest monthly output in a year at 536,000 tons. Looking forward, further output reductions are expected, with production cuts projected between 30,000 to 40,000 tons each month from September to December. This could amount to a 3-4% reduction in total annual zinc ingot output. Open interest in Shanghai exchange zinc contracts has also risen for the third consecutive day, up 12% to 126,000 lots, equivalent to 630,000 tons. On the global stage, the zinc market surplus decreased to 8,700 metric tons in June, down from 44,000 tons in May, according to the International Lead and Zinc Study Group (ILZSG). For the first half of 2024, the global surplus stood at 228,000 tons, significantly lower than the 452,000 tons surplus during the same period last year. Technically, the zinc market is experiencing fresh buying interest, with open interest rising by 1.51% to settle at 2,348 contracts. Zinc is currently supported at ?268.9, with a potential test of ?267.6 if this support level is breached. On the upside, resistance is expected at ?271.7, with further gains possibly pushing prices toward ?273.2.

Trading Ideas:
* Zinc trading range for the day is 267.6-273.2.
* Zinc climbed underpinned by prospects of reduced supply and a seasonal uplift in demand in the coming months.
* Smelters have already curbed production in July and August, with China's zinc output falling for a second straight month in July
* Treatment charges for zinc concentrates have fallen to historical lows amid tight supply.

Aluminium

Aluminium prices edged up by 0.06% yesterday, closing at ?232.4, buoyed by the ongoing tight supply of raw materials and expectations of a potential U.S. interest rate cut next month. The market has been supported by strong demand for alumina and tight bauxite supplies, which have kept prices elevated. This was further reflected in the London Metal Exchange (LME), where the discount of cash aluminium to the three-month contract narrowed to $17.08 per ton, the smallest since May 1, signaling tightening nearby supply. Additionally, LME aluminium inventories have dropped 22% over the past three months, reaching 877,950 tons, the lowest level since early May. In China, the world's largest aluminium producer, July saw a significant rise in primary aluminium output, reaching 3.68 million metric tons, a 6% year-on-year increase and the highest monthly output since 2002. This surge is attributed to new projects in Inner Mongolia and the continued strong production from smelters in other major regions, driven by a still-profitable market despite recent price declines. China's alumina exports also saw a 9.6% increase year-on-year, with the majority directed towards Russia. Globally, primary aluminium output in July increased by 2.4% year-on-year to 6.194 million metric tons, according to the International Aluminium Institute (IAI). China's production rose by 2.5%, while output in the rest of Asia grew by 3.3%. Technically, the aluminium market is experiencing fresh buying, with open interest rising by 4.52%. The metal finds immediate support at ?229, with further support at ?225.6. On the upside, resistance is likely at ?236.9, with potential testing of ?241.4 if the bullish momentum continues.

Trading Ideas:
* Aluminium trading range for the day is 225.6-241.4.
* Aluminium inched higher buoyed by tight supply of raw material and expectation of a U.S. interest rate cut next month.
* The discount of LME cash aluminium to the three-month contract tightened to $17.08 a ton, indicating tightening nearby supply.
* LME aluminium inventory has dropped 22% in three months to 877,950 tons, the lowest since May 8.
 

Cottoncandy

Cottoncandy reduced acreage in the current kharif cropping season. The area under cotton cultivation has decreased by approximately 9% to 110.49 lakh hectares (lh) compared to 121.24 lh last year, with the Cotton Association of India (CAI) projecting an even lower total acreage of around 113 lh for this year, down from 127 lh in the previous year. This reduction is largely attributed to farmers shifting to other crops due to lower yields and high production costs. The CAI has also highlighted a tighter cotton balance sheet for the upcoming season, driven by higher-than-expected exports to Bangladesh, which have surged from 15 lakh bales to 28 lakh bales. India’s cotton production and consumption for 2023-24 are both estimated at around 325 lakh bales. However, the gap created by higher exports and imports will tighten the availability of cotton stocks, with an estimated 70 lakh bales available for consumption up to September 30. If the new crop is delayed, this could further strain supply for mills. Globally, the 2024/25 cotton balance sheet shows reductions across production, consumption, and stock levels, with world production down by 2.6 million bales due to lower output in the United States and India. Consumption has also decreased, particularly in China, leading to a reduction in world ending stocks to 77.6 million bales. Technically, the Cottoncandy market is experiencing fresh buying, with open interest increasing by 0.57%. The price finds immediate support at ?57,940, with further support at ?57,870. On the upside, resistance is likely at ?58,090, with potential testing of ?58,170 if the upward momentum continues.

Trading Ideas:
* Cottoncandy trading range for the day is 57870-58170.
* Cotton prices gained as Cotton acreage trails by 9% at 110 lh
* CAI predicts acreage to be around 113 lh this year, up from 127 lh in the previous year.
* Global cotton production cut by 2.6 million bales; lower in US, India.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.

Turmeric

Turmeric prices declined by 3.75% to settle at ?13,976, driven by limited demand as buyers remain hesitant to make purchases. Export opportunities are expected to face additional challenges due to anticipated volatility in Bangladesh, further complicating the market outlook. In Indonesia, the dry weather has accelerated the turmeric harvest, which is now at its peak. The attractive prices have led many farmers to sell their turmeric in the wet stage, contributing to a reduction in overall production. The combination of rising acreage and weak export demand is exerting downward pressure on prices. Increased sowing is reported, with turmeric sowing in the Erode line doubling compared to last year, while in Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher. This has led to an estimated increase in turmeric cultivation from 3-3.25 lakh hectares last year to 3.75-4 lakh hectares this year. Despite this, downside pressure on prices is somewhat limited as farmers hold back stocks in anticipation of future price rises. Production for 2024 is estimated at 45-50 lakh bags, with an additional outstanding stock of 35-38 lakh bags. Even with increased sowing this season, the upcoming crop is expected to yield 70-75 lakh bags, while outstanding stocks are likely to be depleted, potentially leading to lower availability in 2025. Technically, the turmeric market is undergoing long liquidation, with open interest dropping by 2.26% to settle at 18,585 contracts. Support is currently at ?13,732, with a potential test of ?13,486 if this level is breached. On the upside, resistance is expected at ?14,392, with further gains possibly pushing prices toward ?14,806.

Trading Ideas:
* Turmeric trading range for the day is 13486-14806.
* Turmeric dropped as demand remains limited, as buyers are reluctant to make purchases.
* Pressure also seen amid news of increased sowing.
* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.
* In Nizamabad, a major spot market, the price ended at 15753.85 Rupees dropped by -0.47 percent.

Jeera

Jeera prices edged up by 0.08% yesterday, closing at ?25,345, supported by strong domestic and export demand amidst tight global supplies. However, the upside remained limited due to expectations of a higher production this season. The anticipated increase in production, driven by a substantial rise in the sowing area, particularly in Gujarat and Rajasthan, has kept the prices in check. Gujarat saw a remarkable 104% increase in sowing area, while Rajasthan recorded a 16% rise. As a result, jeera production is expected to surge by 30% this season, reaching 8.5-9 lakh tonnes, which has tempered bullish sentiments in the market. Globally, jeera production has also increased significantly, with China leading the way, doubling its output to over 55-60 thousand tons. This trend is mirrored in other major producing countries like Syria, Turkey, and Afghanistan, where high prices from the previous season incentivized increased production. The influx of new supplies from these regions is expected to exert downward pressure on jeera prices. Despite these production gains, jeera exports from India have remained strong, rising by 46.56% during April-June 2024 compared to the same period in 2023. However, June 2024 exports showed a drop from May, indicating some fluctuation in demand. Technically, the market is experiencing fresh buying, with open interest increasing by 2.48%. Jeera has immediate support at ?25,020, with further support at ?24,700. On the upside, resistance is likely at ?25,550, with potential testing of ?25,760 if the bullish momentum persists.

Trading Ideas:
* Jeera trading range for the day is 24700-25760.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 25479.45 Rupees dropped by -0.03 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views.