IGI Logo

Gold

Gold experienced a decline of -0.17%, closing at 59374, following steadier trends in the wake of better-than-expected employment data. The recent data from the U.S. labor market showed a moderation in the number of workers applying for initial unemployment benefits, which came in below market expectations. The U.S. Labor Department reported a decrease of 4,000 in weekly jobless claims, totaling 228,000 for the week ending August 25.  The positive labor market data impacted market sentiment, contributing to the steadying of gold prices. Furthermore, the annual inflation rate in the Euro Area remained unchanged at 5.3% in August 2023.  In contrast, Perth Mint's July gold product sales experienced a notable decline, reaching their lowest level since October 2020. This trend was also evident in silver sales, which hit a more than three-year low. From a technical perspective, the gold market is undergoing fresh selling. Open interest increased by 0.22%, settling at 12430, while prices declined by -104 rupees. These technical indicators suggest a change in market sentiment and trading activities. Key support and resistance levels offer insights into potential price movements. Gold finds support at 59295, and if breached, it could test 59215. On the other hand, resistance is anticipated at 59510, and surpassing this level could lead to prices testing 59645.

Trading Ideas:
* Gold trading range for the day is 59215-59645.
* Gold prices steadied following the better-than-expected employment data.
* US weekly jobless claims fell by 4,000 to 228,000 25, down from the previous week's estimate of 232,000 claims
* The annual inflation rate in the Euro Area remained steady at 5.3 percent in August 2023


Silver
Silver witnessed a decline of -0.78%, settling at 75682, attributed to the persistent strength of the dollar index, which maintained its early gains and traded above the 103 mark. The dollar index's rebound comes after experiencing a decline of about 1% over the past three sessions. Investor attention was focused on a series of economic data releases that provided insights into consumer spending and inflation trends in the U.S. The economic data revealed a significant increase in consumer spending during July, indicating that Americans purchased more goods and services.  Despite the positive consumer spending data, the U.S. economy's growth in the second quarter was slightly less robust than anticipated. Additionally, private payrolls in August recorded a halving of growth compared to July, and job openings reached a 2-1/2-year low last month. From a technical standpoint, the silver market is experiencing long liquidation. Open interest witnessed a notable decrease of -5.43%, settling at 15547, while prices declined by -598 rupees. These technical indicators suggest a shift in market sentiment and trading activities. Key support and resistance levels offer insights into potential price movements. Silver finds support at 75410, and if breached, it could test 75145. On the other hand, resistance is anticipated at 76090, and surpassing this level could lead to prices testing 76505.

Trading Ideas:
* Silver trading range for the day is 75145-76505.
* Silver dropped as dollar index maintained its early gains, trading above the 103 mark
* U.S. consumer spending increased by the most in six months in July
* The U.S. economy grew at a slightly less brisk pace than anticipated in the second quarter


Crude oil
Crude oil witnessed a substantial increase of 2.02%, closing at 6871, driven by significant factors that propelled the market. Notably, a sharp decline in US crude inventories and expectations surrounding OPEC+ leaders' commitment to maintaining tight global supply were the primary drivers of this uptrend. The Energy Information Administration (EIA) released data revealing an impressive drop in US crude stockpiles by 10.6 million barrels during the previous week.  Anticipations of a prolonged commitment to supply management by OPEC+ members also played a role. There are speculations that Saudi Arabia and Russia may extend output and export cuts into October.  In the global context, China's manufacturing activity contracted to a lesser extent than expected in August, while services activity remained in the expansionary zone. From a technical standpoint, the market is witnessing fresh buying. Open interest surged by 115.04%, settling at 9952, coinciding with a price increase of 136 rupees. These technical indicators suggest a shift in market sentiment, as increased open interest often accompanies price upticks. Key support and resistance levels offer insights into potential price movements. Crude oil finds support at 6780, with the potential to test 6688 if breached. Conversely, resistance is expected at 6923, and exceeding this level could lead to prices testing 6974.

Trading Ideas:
* Crudeoil trading range for the day is 6688-6974.
* Crude oil gains underpinned by a large decline in US crude inventories
* Support also seen amid expectations that OPEC+ leaders will keep global supply tight.
* EIA data showed that US crude stockpiles tumbled by 10.6 million barrels last week


Natural gas
Natural gas marked a notable increase of 1.36%, closing at 231.6, as multiple factors influenced the market. Forecasts of hotter weather conditions contributed to this uptick, while the impact of Hurricane Idalia on demand was also taken into account. The anticipation of hotter weather drove demand expectations, prompting the price surge. Additionally, traders were closely assessing the potential effects of Hurricane Idalia, which could disrupt power supply to over a million homes and businesses. Data from Refinitiv highlighted a slight decline in average gas output across the Lower 48 US states. Although the heat wave has subsided, meteorological forecasts suggest that the Lower 48 US states will continue to experience above-average temperatures until at least September 13th. From a technical perspective, the market is currently undergoing short covering, as evident from the drop in open interest by -2.84%, settling at 26708. At the same time, prices have risen by 3.1 rupees. These technical indicators hint at a shift in market sentiment, possibly due to changing supply-demand dynamics. Key support and resistance levels offer insights into potential price movements. Natural gas finds support at 225.5, with a potential test of 219.5 if the support level is breached. On the other hand, resistance is expected at 237.4, and surpassing this level could potentially lead to prices testing 243.3.

Trading Ideas:
* Naturalgas trading range for the day is 219.5-243.3.
* Natural gas rose on forecasts for hotter weather
* Traders assessed the impact from Hurricane Idalia, which could lead to lower demand for the fuel.
* Idalia would likely knock out power to over a million homes and businesses, which would cut demand for both power and gas.



Copper
Copper experienced a decline of -0.32%, settling at 735.6, driven by subdued consumption and China's economic slowdown. China, a significant consumer of copper, saw its manufacturing activity contract for the fifth consecutive month in August. This string of weak economic data has put pressure on metals prices, including copper. The sluggish demand for copper, particularly in China, raises concerns about global economic growth. The global refined copper market shifted from a deficit to a surplus of 213,000 metric tons in the first half of 2023 compared to the same period last year. This change was reported by the International Copper Study Group (ICSG) and is a result of factors such as increased output in China and the Democratic Republic of Congo, even as production declined elsewhere. From a technical standpoint, the market is currently undergoing fresh selling, as seen from the increase in open interest by 3.56%, settling at 5404, while prices have decreased by -2.35 rupees. Key support and resistance levels offer insights into potential price movements. Copper finds support at 733.3, and a breach of this level could lead to a test of 731. On the other hand, resistance is expected at 737.7, and surpassing this level could potentially lead to prices testing 739.8.

Trading Ideas:
* Copper trading range for the day is 731-739.8.
* Copper fell on tepid consumption amid slowing economic growth in China
* China's manufacturing activity contracted for a fifth straight month in August
* Copper output in Chile, rose 0.94% year-on-year in July to 434,089 metric tons


Zinc
Zinc concluded with a decline of -0.14%, settling at 217.45, influenced by rising output and increased cancelled zinc warrants. The year-on-year increase of 10.69% in zinc output during January to August to reach 4.328 million mt played a role in the downward pressure on zinc prices. Support for zinc prices came from the surge in cancelled zinc warrants, which rose to nearly 20% from 2% the previous week. Anticipation in the industrial metals market centers around China's purchasing managers' surveys (PMIs) in the manufacturing sector, a key driver of demand for industrial metals. In the United States, upcoming data on gross domestic product (GDP), inflation, and non-farm payrolls will provide insights into U.S. interest rates and the direction of the dollar. From a technical standpoint, the market is currently undergoing fresh selling, as indicated by the rise in open interest by 1.8% to settle at 3683, alongside a decrease in prices by -0.3 rupees. These technical factors suggest a bearish sentiment in the market. Key levels of support and resistance provide insights into potential price movements. Zinc finds support at 216.3, and a breach of this level could lead to a test of 215.1. On the upside, resistance is expected at 218.6, with a potential move above leading to prices testing 219.7.

Trading Ideas:
* Zinc trading range for the day is 215.1-219.7.
* Zinc dropped as output from January to August will reach 4.328 million mt, an increase of 10.69% year-on-year.
* A rise in cancelled zinc warrants at nearly 20% compared with 2% last week was also supporting zinc prices.
* Industrial metals markets are awaiting surveys of PMIs in China's manufacturing sector.


Aluminium

Aluminium marked a gain of 0.42%, closing at 201.6, driven by China's initiatives to support its housing and stock markets. China's central bank introduced measures to relax residential housing loan regulations, aiming to stimulate loan applications and home purchases.  China's central bank, the PBOC, decreased the one-year loan prime rate by 10 basis points to a historic low of 3.45% on August 21. China's industrial firms reported a 6.7% decline in profits for July compared to the previous year. This marked the seventh consecutive month of profit decline due to weak demand, indicating ongoing economic challenges. Domestic aluminium production in China during July 2023 reached 3.568 million mt, showing a year-on-year increase of 1.95%. The average daily production in July surged by over 3,000 mt compared to the previous month, reaching approximately 115,100 mt. Technically, the aluminium market underwent short covering, evident from the decline in open interest by -4.94% to settle at 3846. This was accompanied by a price increase of 0.85 rupees, indicating a shift in market sentiment. Key support and resistance levels provide insights into potential price movements. Aluminium finds support at 200.8, and a breach of this level could lead to a test of 199.8. On the upside, resistance is expected at 202.6, and surpassing this level could result in prices testing 203.4.

Trading Ideas:
* Aluminium trading range for the day is 199.8-203.4.
* Aluminium gains after China moved to boost its struggling housing markets
* China's July aluminium production up 1.95% YoY at 3.568 million mt.
* Jan-Jul aluminium output grows 2.7% YoY to 23.676 million mt.


Cotton
Cotton candy exhibited a rise of 0.27%, closing at 59940, driven by concerns of reduced production. In Gujarat, sowing increased by almost 5% with 2,679,299.00 hectares, surpassing the previous year's sown area of 2,545,105.00 hectares. However, India's overall cotton sowing witnessed a decline of nearly -1.82% to 122.56 lakh hectares in 2023 compared to 124.82 lakh hectares in 2022. Cotton arrivals during the current season, which began in October last year, have surpassed 318 lakh bales, as reported by the Cotton Corporation of India, according to the Southern India Mills' Association (SIMA).  India is facing its lowest monsoon rains in eight years, with anticipated El Niño weather conditions leading to reduced September precipitation. In the major spot market, the price of cotton candy concluded at a value where it dropped by a certain percentage. Technically, the cotton candy market experiences fresh buying, evident from the increase in open interest by 6.25% to settle at 68. Simultaneously, prices rose by 160 rupees, indicating a shift in market sentiment. Key support and resistance levels provide insights into potential price movements. Cotton candy finds support at 59760, and breaking below this level could lead to a test of 59590. On the upside, resistance is anticipated at 60100, and surpassing this level might result in prices testing 60270.

Trading Ideas:
* Cottoncandy trading range for the day is 59590-60270.
* Cotton rose amid fears of lower production.
* In Gujarat, sowing grows by nearly 5% with 2,679,299.00 hectares
* Cotton arrivals so far during the current season that started in October last year has crossed 318 lakh bales
* In , a major spot market, the price ended at  Rupees dropped by  percent.


Turmeric
Turmeric exhibited a noteworthy increase of 1.16%, closing at 14458, primarily driven by limited availability of quality produce in the market. The ongoing sowing activities and crop progress remain instrumental in influencing turmeric prices. However, apprehensions have arisen due to forecasts of drier weather in the southern and central regions, which could potentially impact turmeric crops. While sowing activities are nearing completion in Maharashtra, expectations indicate an increase in sowing in Andhra Pradesh and Tamil Nadu. Notably, the looming threat of El Nino casts a shadow over the upcoming turmeric crop. The export front also adds complexity to the turmeric market dynamics. Exports of turmeric during the Apr-Jun 2023 interval marked a substantial increase of 16.87%, reaching 57,775.30 tonnes in comparison to the 49,435.38 tonnes exported during the same period in 2022. This growth in exports further influences the equilibrium of the turmeric market. The concerning outlook extends beyond the local market to India's monsoon performance. From a technical viewpoint, the market is presently undergoing a phase of short covering. Open interest witnessed a decline of -0.81%, settling at 15285, while prices experienced an increase of 166 rupees. Key levels to monitor include a support level at 13968, while potential resistance is anticipated at 14790. Any upward momentum could potentially propel prices to test the level of 15122.

Trading Ideas:
* Turmeric trading range for the day is 14082-15786.
* Turmeric prices gained amid limited availability of quality produce in the market.
* India exported only 18.3 thousand tonnes in June’23 as compared to 18.5 thousand tonnes of previous year.
* Domestic demand remained subdued as most of the arrivals arrived are inferior quality that will keep profit booking intact in turmeric.
* In , a major spot market, the price ended at  Rupees dropped by  percent.

Jeera

Jeera registered a modest increase of 0.32%, settling at 53665. This gain was primarily attributed to short covering following a previous drop in prices, which had been influenced by improved global supply conditions. Despite this uptick, the downward movement of jeera prices remains limited due to the prevailing rainy environment affecting supply. The availability of cheaper jeera from Syria and the global market could potentially lead to a decrease in export demand from India in the near future. This competitive pressure could impact the dynamics of jeera prices. Jeera exports during the period of Apr-Jun 2023 displayed a substantial increase of 13.16%, reaching 53,399.65 tonnes compared to 47,190.98 tonnes in the same interval of 2022. However, a drop of 59.81% was observed in June 2023, with exports amounting to 10,411.14 tonnes, a significant decrease from the 25,903.63 tonnes exported in May 2023. Similarly, June 2023 exports were lower by 51.78% compared to the same period in 2022. In the major spot market of Unjha, the price of jeera concluded at 56190.2 Rupees, experiencing a decrease of -0.88 percent, underscoring the market's nuanced behavior. From a technical perspective, the current market scenario suggests short covering. Open interest has experienced a decrease of -4.81%, settling at 5994, while prices have risen by 170 rupees. Key support levels to monitor include 52780, and there is potential resistance at 54430. Any upward momentum in jeera prices could potentially lead to testing the level of 55190.

Trading Ideas:
* Jeera trading range for the day is 53110-55830.
* Jeera gained  on short covering after prices dropped in wake of improved global supply condition.
* Cheaper availability of Syria and jeera in global market will lead to fall in export demand from India in coming days.
* However, downside seen limited as supply is limited due to the rainy environment.
* In , a major spot market, the price ended at  Rupees dropped by  percent.

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