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Gold
Gold yesterday settled down by -0.29% at 58640 as dollar index rose above 104.2, reaching its highest levels in eleven weeks as investors digested Federal Reserve Chair Jerome Powell’s Jackson Hole speech. Powell's statement emphasized the US Federal Reserve's commitment to bringing inflation back to 2% and stated that the central bank is ready to hike rates if needed. At the same time, Powell suggested the Fed could hold rates steady at its next meeting in September to assess the incoming data and the evolving outlook and risks. Central bank buying slowed in Q2 but remained resolutely positive. This, combined with healthy investment and resilient jewellery demand, created a supportive environment for gold prices. Central bank gold buying in H1 reached a first-half record of 387t. Despite the Q2 slowdown, the strong Q1 start set the seal on a record-breaking H1. Premiums on physical gold jumped, driven by supply constraints and strong demand for bullion as a safe-haven, as economic worries mount in top consumer China. Chinese dealers sold gold at premiums of $40 to $60 an ounce over global spot prices, versus $33-$43 last week. In India, dealers charged premiums of about $3 an ounce over official domestic prices unchanged from last week. Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.38% to settle at 12533 while prices are down -171 rupees, now Gold is getting support at 58465 and below same could see a test of 58285 levels, and resistance is now likely to be seen at 58850, a move above could see prices testing 59055.

Trading Ideas:
* Gold trading range for the day is 58285-59055.
* Gold dropped as dollar index rose above 104.2, reaching its highest levels in eleven weeks
* Fed prepared to raise rates further to combat inflation
* Premiums on physical gold jumped, driven by supply constraints and strong demand for bullion as a safe-haven

 

Silver

Silver yesterday settled down by -0.03% at 73549 facing pressure from a strong dollar as investors continued to gauge the monetary policy outlook following Federal Reserve Chair Jerome Powell’s Jackson Hole remarks. The banker noted caution is required in next meetings to assess the health of the economy, but further hikes won't be ruled out since the regulator aims to bring inflation back to the 2% target. At the same time, traders bet on a possible pause in tightening from the ECB due to the weak European data. More insights on that could be provided in Lagarde's comments later in the day. Previously, two Fed officials indicated that the jump in bond yields could complement the central bank’s effort to slow the economy and reign in price pressures without needing to raise rates. Weekly, the metal is set to gain 0.9% after four consecutive periods of declines. Federal Reserve Chair Jerome Powell, speaking at the Jackson Hole Symposium, emphasized the potential necessity for the US Federal Reserve to implement additional interest rate hikes in order to effectively manage inflation, as policymakers carefully evaluate indications of diminishing inflation alongside the robust performance of the economy and labor market. Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.15% to settle at 7052 while prices are down -19 rupees, now Silver is getting support at 73005 and below same could see a test of 72465 levels, and resistance is now likely to be seen at 74055, a move above could see prices testing 74565.

Trading Ideas:
* Silver trading range for the day is 72465-74565.
* Silver fell on strong dollar as investors assessed monetary policy outlook.
* Fed Chair Powell emphasized the potential necessity for Fed to implement additional interest rate hikes in order to effectively manage inflation
* Fed Powell suggested the Fed could hold rates steady at its next meeting in September


Crude Oil

Crudeoil yesterday settled down by -0.26% at 6503 on dollar strength, signs of increased U.S. supply and amid lingering fuel demand concerns. However, downside seen limited amid OPEC+ output cuts, with Saudi Arabia reportedly considering to extend its 1 million barrels per day production cut into October. Iran's oil minister, meanwhile, has been quoted by state media as saying he expects the country's crude oil output to hit 3.4 million barrels per day (bpd) by the end of September, even though U.S. sanctions remain in place. Morgan Stanley expects Brent crude prices to be well supported around $80 per barrel as the oil market is likely to remain in a deficit in the second of half of 2023 before returning to a small surplus next year. Morgan Stanley raised its Brent price forecast for the third quarter to $85 per barrel from $75, and for the fourth quarter to $82.50 from $70. U.S. field production of crude oil rose last week by 100,000 barrels per day (bpd) to 12.8 million bpd, the highest since March 2020. U.S. crude oil inventories fell last week as refinery processing surged and crude output reached their highest since the coronavirus pandemic decimated fuel consumption. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.59% to settle at 5823 while prices are down -17 rupees, now Crudeoil is getting support at 6429 and below same could see a test of 6355 levels, and resistance is now likely to be seen at 6616, a move above could see prices testing 6729.

Trading Ideas:
* Crudeoil trading range for the day is 6355-6729.
* Crude Oil fell on strong dollar, rising U.S. supply, and fuel demand worries
* Iran's oil minister expects 3.4M bpd output by Sept. despite U.S. sanctions.
* Brent prices to be well supported near $80/bbl, says Morgan Stanley

Natural Gas

Naturalgas yesterday settled down by -0.29% at 209.3 on forecasts for demand to decline as the heat wave blanketing much of the central part of the country and Texas becomes less brutal. Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants. The U.S. National Hurricane Center (NHC), meanwhile, forecast a tropical cyclone could form in the Caribbean Sea, or Gulf of Mexico over the next week. Data provider Refinitiv said average gas output in the U.S. Lower 48 states eased to 101.6 billion cubic feet per day (bcfd) so far in August, down from 101.8 bcfd in July. Despite a seasonal cooling, meteorologists forecast the weather in the Lower 48 states will remain mostly hotter than normal through at least Sept. 9. Refinitiv forecast U.S. gas demand, including exports, would rise from 103.9 bcfd this week to 104.3 bcfd next week before dropping to 102.6 bcfd as the weather turns seasonally cooler. The forecast for next week was higher than Refinitiv's outlook on Thursday due to an expected increase in the amount of gas flowing to liquefied natural gas (LNG) export plants. Technically market is under long liquidation as the market has witnessed a drop in open interest by -29.99% to settle at 9350 while prices are down -0.6 rupees, now Naturalgas is getting support at 205.4 and below same could see a test of 201.6 levels, and resistance is now likely to be seen at 211.8, a move above could see prices testing 214.4.

Trading Ideas:
* Naturalgas trading range for the day is 201.6-214.4.
* Natural gas eased on forecasts for demand to decline
* The U.S. EIA said utilities added just 18 billion cubic feet (bcf) of gas into storage
* The U.S. NHC forecast a tropical cyclone could form in the Caribbean Sea, or Gulf of Mexico over the next week.


Copper

Copper yesterday settled down by -0.05% at 731.4 as prices boosted by a potential demand uplift from support for China's yuan currency and seasonal strength in consumption. Investors are now shifting their focus to September and October, traditionally strong consumption months for copper in China. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 3.5% from last Friday. The global refined copper market swung to a surplus of 213,000 metric tons in the first six months of 2023 from a 196,000-ton deficit in the same period last year, the International Copper Study Group (ICSG) said. Output expanded in China and the Democratic Republic of Congo (DRC) while declining elsewhere, but overall total refined copper production rose by 7% to 13.5 million tons. Global copper mine production increased by 2% due to several start-ups and expansions and despite operational issues in Chile, China, Indonesia, Panama and the United States, and protests by communities aimed at impeding mining operations in Peru. Production in Chile, where state-run miner Codelco is battling to boost output from its lowest level in 25 years, declined by 4% as several mines were affected by operational issues, lower grades and reduced water supply. Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.75% to settle at 5387 while prices are down -0.4 rupees, now Copper is getting support at 728.4 and below same could see a test of 725.3 levels, and resistance is now likely to be seen at 735.8, a move above could see prices testing 740.1.

Trading Ideas:
* Copper trading range for the day is 725.3-740.1.
* Copper steadied boosted by a potential demand uplift from support for China's yuan
* Investors are now shifting their focus to September and October, traditionally strong consumption months in China.
* Copper inventories in warehouses monitored by the SHFE rose 3.5% from last Friday.

Zinc

Zinc yesterday settled up by 0.14% at 215.05 as zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell by 20.2% to a seven-month low. data shows that social inventories of zinc ingots across seven major markets in China totalled 81,500 mt as of Friday August 25, down 17,800 mt from Friday August 18 and down 12,300 mt from Monday August 21. The PMI in the euro zone exceeded expectations in August and recorded 43.7, which was still below the line of prosperity but improved slightly. The market expected a slight improvement. At the same time, the weakening of the US PMI data deepened the market’s expectations that the pace of subsequent interest rate hikes will stop or turn into interest rate cuts. The global zinc market surplus increased to 76,000 metric tons in June, up from 67,000 tons a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. During the first six months of the year, the global surplus was 370,000 metric tons compared to a surplus of 241,000 tons in the same period last year. Citibank has bought large amounts of zinc on the London Metal Exchange (LME) and arranged a lucrative deal to store the metal in LME approved warehouses. Technically market is under short covering as the market has witnessed a drop in open interest by -2.33% to settle at 3807 while prices are up 0.3 rupees, now Zinc is getting support at 214 and below same could see a test of 212.9 levels, and resistance is now likely to be seen at 216.3, a move above could see prices testing 217.5.

Trading Ideas:
* Zinc trading range for the day is 212.9-217.5.
* Zinc gains as inventories in SHFE fell by 20.2% to a seven-month low.
* Global zinc market surplus rises in June to 76,000 tons – ILZSG
* The PMI in the euro zone exceeded expectations in August and recorded 43.7


Aluminium

Aluminium yesterday settled down by -0.18% at 198.1 as poor economic data from China continued to pressure the demand outlook. China's Yunnan province started ramping up energy-intensive aluminium production after the end of power curbs. Domestic aluminum ingots social inventory is about to fall below 500,000 mt but with the resumption of production in Yunnan, supplies may be gradually restored. In mid-August, the downstream inventory restocking was active, which strengthened confidence over the extended destocking of aluminum products and boosted spot premiums. US business activities came to a near standstill in August and growth hit slowest pace since February. And demand for new business in huge services sector shrank. Data from the International Aluminium Institute (IAI) revealed that global primary aluminum production in July declined by 0.5% compared to the previous year, reaching a total of 5.861 million tonnes. Global primary aluminium output rose by 1.8% year on year in the first half of 2023, mainly owing to higher production in China, according to the International Aluminium Institute. The discount on aluminium for near-term delivery compared with the three-month contract on the London Metal Exchange (LME) has reached its highest since the global financial crisis of 2008, indicating weak demand and rising supply. Technically market is under fresh selling as the market has witnessed a gain in open interest by 11.24% to settle at 4256 while prices are down -0.35 rupees, now Aluminium is getting support at 197.5 and below same could see a test of 196.7 levels, and resistance is now likely to be seen at 199.4, a move above could see prices testing 200.5.

Trading Ideas:
* Aluminium trading range for the day is 196.7-200.5.
* Aluminium dropped as poor economic data from China continued to pressure the demand outlook
* China's Yunnan province started ramping up energy-intensive aluminium production
* Global primary aluminium output rose by 1.8% year on year in the first half of 2023

Cotton Candy

Cottoncandy yesterday settled up by 0.17% at 59180 amid fears of lower production. India’s Cotton sowing dropped by nearly -1.82% to 122.56 lakh hectares in 2023 against an area sown of 124.82 lakh hectares in 2022. Cotton arrivals so far during the current season that started in October last year has crossed 318 lakh bales according to data available with the Cotton Corporation of India, said the Southern India Mills’ Association (SIMA). The SIMA chairman, said that there were reports that cotton crop size this season will be 311.18 lakh bales. This is probably the ginning production, he said. Arrivals in Punjab have been recorded at almost one-third of the previous year, 2021-22. In Punjab the arrival of cotton in the 2022-23 marketing season has been recorded at 8.7 lakh quintal till date this year, while it was 28.89 lakh quintal for the entire 2021-22 season. USDA weekly export sales report showed net sales of 277,700 running bales of cotton for 2023/2024, with increases primarily for China. During this Kharif season, cotton cultivation in Gujarat has achieved a remarkable milestone, surpassing the records of the past eight years. In Rajkot, a major spot market, the price ended at 28697.8 Rupees dropped by -0.24 percent. Technically market is under fresh buying as the market has witnessed a gain in open interest by 17.02% to settle at 55 while prices are up 100 rupees, now Cottoncandy is getting support at 59080 and below same could see a test of 58970 levels, and resistance is now likely to be seen at 59300, a move above could see prices testing 59410.

Trading Ideas:
* Cottoncandy trading range for the day is 58970-59410.
* Cotton gains amid fears of lower production.
* India’s Cotton sowing dropped by nearly -1.82% to 122.56 lakh hectares in 2023 against an area sown of 124.82 lakh hectares in 2022.
* Cotton arrivals so far during the current season that started in October last year has crossed 318 lakh bales
* In Rajkot, a major spot market, the price ended at 28697.8 Rupees dropped by -0.24 percent.

Turmeric

Turmeric yesterday settled up by 0.58% at 16174 amid limited availability of quality produce in the market. Ongoing sowing and crop progress is major price driver for turmeric and forecast of drier weather in southern and central region has added worries to turmeric crops. Sowing activities almost completed in Maharashtra and likely to pick up in Andhra Pradesh and Tamil Nadu but erratic monsoon rainfall has impacted the sowing progress. The looming threat of El Nino casts a shadow over the upcoming turmeric crop. Meteorological predictions suggest the activation of El Nino in July, potentially resulting in reduced rainfall and drought conditions. Such conditions could particularly impact yields, like turmeric, that heavily rely on monsoon irrigation. Farmers shift in focus has led to expectations of a 20-25 percent decrease in turmeric sowing this year, notably in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Turmeric exports during Apr-Jun 2023, rose by 16.87 percent at 57,775.30 tonnes as compared to 49,435.38 tonnes exported during Apr- Jun 2022. In Nizamabad, a major spot market, the price ended at 14631.8 Rupees gained by 0.32 percent. Technically market is under short covering as the market has witnessed a drop in open interest by -0.86% to settle at 16090 while prices are up 94 rupees, now Turmeric is getting support at 15916 and below same could see a test of 15658 levels, and resistance is now likely to be seen at 16480, a move above could see prices testing 16786.

Trading Ideas:
* Turmeric trading range for the day is 15658-16786.
* 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 Nizamabad, a major spot market, the price ended at 14631.8 Rupees gained by 0.32 percent.

Jeera

Jeera yesterday settled down by -0.91% at 56005 in wake of improved global supply condition. However, downside seen limited as supply is limited due to the rainy environment. Cheaper availability of Syria and jeera in global market will lead to fall in export demand from India in coming days. Drier weather condition in Gujarat will also lead to rise in arrivals that will cap the upwards move. China’s cumin imports and exports have caused temporary corrections in cumin prices, with a recent $200 decrease in the international market. The possibility of China purchasing Indian cumin in October-November before the arrival of new cumin adds further uncertainty to the market dynamics. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. Jeera exports during Apr-Jun 2023, rose by 13.16 percent at 53,399.65 tonnes as compared to 47,190.98 tonnes exported during Apr- Jun 2022. In Jun 2023 around 10,411.14 tonnes of jeera was exported as against 25,903.63 tonnes in May 2023 showing a drop of 59.81%. In Jun 2023 around 10,411.14 tonnes of jeera was exported as against 21,587.63 tonnes in Jun 2022 showing a drop of 51.78%. In Unjha, a major spot market, the price ended at 57962.45 Rupees dropped by -0.1 percent. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.6% to settle at 6294 while prices are down -515 rupees, now Jeera is getting support at 55580 and below same could see a test of 55140 levels, and resistance is now likely to be seen at 56580, a move above could see prices testing 57140.

Trading Ideas:
* Jeera trading range for the day is 55140-57140.
* Jeera 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 Unjha, a major spot market, the price ended at 57962.45 Rupees dropped by -0.1 percent.

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