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Gold

Gold managed a modest gain of 0.04%, settling at 59395, but it relinquished some of its earlier gains due to the latest U.S. manufacturing data. This data, while showing signs of improvement, also highlighted the continued contraction in the sector for the tenth consecutive month. The Institute for Supply Management (ISM) manufacturing index for August came in at 47.6%, up from July's 46.4%. In another twist, the most recent U.S. jobs report revealed an unexpected increase in the unemployment rate to 3.8%, the highest rate since February 2022, surpassing market expectations of 3.5%.  The safe-haven appeal of gold cooled as hopes of economic stimulus aiding China's ailing economy prompted a drop in premiums on physical gold in the country. Chinese dealers were selling gold at premiums ranging from $20 to $38 an ounce over global spot prices, down from the $40 to $60 range seen just the week before. India witnessed a nearly 2% rise in local gold prices over a fortnight, discouraging buyers and causing dealers to offer discounts of about $4 an ounce below official domestic prices. From a technical perspective, the market is currently experiencing short covering. Open interest has dropped by -2.77%, settling at 12086. Meanwhile, prices have increased by 21 rupees. Gold is finding support at 59225, and a break below this level could test 59050. On the upside, resistance is expected around 59620. A move above this level could see prices testing 59840.

Trading Ideas:

* Gold trading range for the day is 59050-59840.

* Gold pared gains after the U.S. manufacturing sector showed it improved

* The US jobs report showed the unemployment rate unexpectedly rose to 3.8%, the highest since February 2022.

* Premiums on physical gold in China eased off recent highs as safe-haven buying cooled

Silver

Silver experienced a decline of -0.78%, settling at 75089, as the U.S. dollar gained strength following the release of the August jobs report. The report indicated that the labor market remained robust, despite some emerging signs of deterioration. In August, the U.S. economy added more jobs than expected. However, an uptick in the unemployment rate to 3.8% and a moderation in wage growth suggested a softening of labor market conditions. The Labor Department's closely watched employment report revealed an increase of 187,000 nonfarm payrolls in August, though July's data was revised lower to show 157,000 jobs added instead of the initially reported 187,000. Concurrently, U.S. manufacturing continued to contract for the tenth consecutive month in August. The ISM reported an increase in its manufacturing PMI to 47.6 from 46.4 in July. Fed funds futures traders are now pricing in a 93% likelihood that the Federal Reserve will keep rates unchanged at its September 19-20 meeting. Additionally, there's only a 37% chance of a rate hike in November, according to the CME Group's FedWatch Tool. From a technical standpoint, the market is currently witnessing long liquidation. Open interest has fallen by -7.77% to settle at 14426, while prices have declined by -593 rupees. Silver finds support at 74465, and a break below this level could test 73835. On the upside, resistance is anticipated at 76170, with the potential for prices to test 77245 if this level is breached.

Trading Ideas:

* Silver trading range for the day is 73835-77245.

* Silver dropped as dollar posts gains after mixed us jobs report

* The U.S. economy added more jobs than expected in August, but a rise in the unemployment rate to 3.8%

* U.S. manufacturing contracted for a 10th straight month in August, but the pace of decline continued to slow

Crude oil

Crude oil posted a robust gain of 2.81%, settling at 7064, driven by tightening supplies and expectations of an extension to output cuts by OPEC+ leaders for the remainder of the year. The market anticipates Saudi Arabia to prolong its voluntary oil production cut of 1 million barrels per day into October, with Russia also likely implementing export cuts through the next month. In the U.S., the latest data revealed a substantial decrease of 10.6 million barrels in crude inventories last week, significantly surpassing expectations for a 3.3 million barrel draw. Meanwhile, there was news of an increase in Iran's production to 3.1 million barrels per day in August, the highest level since 2018. Economic data presented a mixed picture, with signs of a downturn in Eurozone manufacturing but an unexpected rebound in China, offering hope for export-dependent economies. OPEC and the International Energy Agency are relying on China, the world's largest oil importer, to bolster oil demand for the remainder of 2023.  In the U.S., crude oil shipments via rail dipped by 23,000 barrels per day in June compared to the previous month, totaling 227,000 barrels per day. From a technical perspective, the market is currently experiencing fresh buying interest. Open interest has surged by 15.4%, settling at 11485, while prices have increased by 193 rupees. Crude oil is finding support at 6956, and a break below this level could test 6848. On the upside, resistance is likely at 7126, with the potential for prices to test 7188 if this level is breached.

Trading Ideas:

* Crudeoil trading range for the day is 6848-7188.

* Crude oil rose underpinned by tightening supplies.

* Support also seen amid expectations that OPEC+ leaders would extend output cuts through the rest of the year.

* Saudi Arabia is widely expected to extend a voluntary 1 million barrel per day (bpd) oil production cut into October

Natural gas

Natural gas experienced a decline of -0.78%, settling at 229.8, driven in part by reduced gas consumption over the three-day U.S. Labor Day weekend. Forecasts also played a role, with expectations that the flow of gas to U.S. liquefied natural gas (LNG) export plants would remain below previous highs due to ongoing maintenance at some facilities. However, the downside was limited by a decrease in daily gas output and forecasts for continued hot weather. The U.S. Energy Information Administration (EIA) reported that utilities injected 32 billion cubic feet (bcf) of gas into storage during the week ending August 25. Nevertheless, daily gas output over the past few days was set to drop by 2.7 billion cubic feet per day (bcfd), reaching a preliminary four-month low of 99.2 bcfd on Friday. Meteorologists predicted that weather in the lower 48 U.S. states would remain hotter than normal until at least September 16. While seasonally cooler weather temporarily reduced air-conditioning usage and gas consumption, meteorologists still expected above-average temperatures to persist until mid-September. From a technical standpoint, the market is currently witnessing fresh selling activity. Open interest has increased by 0.88%, settling at 26943, while prices have declined by -1.8 rupees. Natural gas is finding support at 225.7, and a break below this level could test 221.6. On the upside, resistance is likely at 235.4, with the potential for prices to test 241 if this level is breached.

Trading Ideas:

* Naturalgas trading range for the day is 221.6-241.

* Natural gas dropped amid a predicted reduction in gas use.

* EIA said utilities added 32 bcf of gas into storage during the week ended Aug. 25.

* Meteorologists forecast that weather in the lower 48 U.S. states will remain mostly hotter than normal through at least Sept. 16.

Copper

Copper exhibited a gain of 0.59%, closing at 739.95, as investors responded positively to Beijing's initiatives aimed at shoring up the property market. These measures include reducing mortgage rates for first-time homebuyers and adjusting down payment requirements in select cities. The upbeat sentiment is further fueled by China's favorable Purchasing Managers' Index (PMI) data, which has heightened expectations for a resurgence in demand. China's factory activity, as per a recent private-sector survey, unexpectedly swung back into expansion mode in August. This expansion is evident in improvements across supply, domestic demand, and employment. The proactive steps taken by Beijing to support the real estate sector, coupled with the promising PMI figures, have garnered investor approval. Notably, the real estate market's health has a significant impact on copper due to its extensive use in construction and infrastructure. Beyond this, the electric vehicle (EV) market's growth and the rapid expansion of India's economy are poised to drive global copper demand. In India alone, copper demand is anticipated to exceed 1.5 million tons by 2025, marking a 40% increase from 2022 levels. From a technical perspective, the market is currently experiencing short covering. Open interest has decreased by -8.42%, settling at 4949, while prices have risen by 4.35 rupees. Copper is finding support at 735.7, with the potential for a test of 731.4 if this level is breached. On the upside, resistance is likely at 745.4, and a move above this level could see prices testing 750.8.

Trading Ideas:

* Copper trading range for the day is 731.4-750.8.

* Copper gains as investors welcomed Beijing's efforts to bolster property market

* Global demand for copper will be aided by the electric vehicle market and a fast-growing India economy.

* Copper demand in India will exceed 1.5 million tons in 2025, up 40% from 2022 levels.

Zinc

Zinc surged by 1.54%, settling at 220.8, as it benefited from improved demand prospects following China's measures to revive its struggling property market. China's central bank and financial regulator introduced new measures to support homebuyers, including reducing mortgage rates for first-time buyers and adjusting down payment ratios in select cities. This move buoyed market sentiment. However, despite this positive news, the global zinc market showed a surplus of 76,000 metric tons in June, up from 67,000 tons the previous month, according to data from the International Lead and Zinc Study Group (ILZSG). For the first half of the year, the global surplus reached 370,000 metric tons, compared to a surplus of 241,000 tons in the same period last year. While the surplus expanded, it's important to note that China's factory activity unexpectedly returned to expansion mode in August, as indicated by a private-sector survey. The Caixin/S&P Global manufacturing purchasing managers' index (PMI) climbed to 51.0 in August from 49.2 in July, surpassing forecasts and marking its highest level since February. From a technical perspective, the market is currently witnessing fresh buying interest. Open interest has surged by 21.29%, settling at 4467, while prices have risen by 3.35 rupees. Zinc is finding support at 219.2, and a breach below this level could lead to a test of 217.4. On the upside, resistance is likely at 222.2, with potential price testing at 223.4 upon breaking this level.

Trading Ideas:

* Zinc trading range for the day is 217.4-223.4.

* Zinc prices climb as China stimulus lifts demand outlook

* China's central bank and financial regulator issued notices to ease some borrowing rules to aid homebuyers

* Global zinc market surplus rises in June to 76,000 tons – ILZSG

Aluminium recorded a modest gain of 0.42%, concluding at 201.6, primarily driven by China's efforts to bolster its housing and stock markets. China's central bank took steps to relax regulations on residential housing loans, with the goal of stimulating loan applications and encouraging home purchases. Additionally, the People's Bank of China (PBOC) reduced the one-year loan prime rate by 10 basis points to a historic low of 3.45% on August 21. These measures were implemented to boost economic activity and financial stability. However, amid these moves, China's industrial firms reported a 6.7% drop in profits for July compared to the previous year. This marked the seventh consecutive month of profit decline, attributed to weak demand and ongoing economic challenges. Despite these headwinds, domestic aluminium production in China for July 2023 reached 3.568 million metric tons, reflecting a year-on-year increase of 1.95%. The average daily production in July surged by over 3,000 metric tons compared to the previous month, reaching approximately 115,100 metric tons. From a technical standpoint, the aluminium market saw short covering, evident from the decline in open interest by -4.94%, settling at 3846. This shift in market sentiment was accompanied by a price increase of 0.85 rupees.

Trading Ideas:

* Aluminium trading range for the day is 201.4-205.6.

* Aluminium rise on renewed demand after China’s support its property market

* Support also seen after data showed expansion in China's manufacturing sector

* PBOC said it would cut the foreign exchange reserve requirement ratio (RRR) by 200 basis points (bps) to 4% from 6% beginning Sept. 15

Cotton

Cotton candy surged by 2.44%, closing at 61400, driven by multiple factors. Sowing in India decreased by 2.11% to 122.99 lakh hectares compared to 125.64 lakh hectares in 2022. This decline in sowing, combined with shrinking supplies in the domestic market, provided support to cotton prices. Additionally, firmness in ICE cotton prices and concerns over yield losses due to extended dryness in Gujarat contributed to the bullish sentiment in the cotton market. Reports of lower acreages and the overall supply situation have bolstered market sentiment. Cotton arrivals during the current season, which began in October last year, have crossed 318 lakh bales, as reported by the Cotton Corporation of India. Punjab, a significant cotton-producing region, recorded arrivals at nearly one-third of the previous year, with only 8.7 lakh quintals so far in 2022-23, compared to 28.89 lakh quintals for the entire 2021-22 season. However, it's essential to note that India is facing its lowest monsoon rains in eight years, with El Niño weather conditions expected to reduce September precipitation. From a technical perspective, the cotton candy market is currently experiencing fresh buying interest, marked by a substantial 23.53% increase in open interest to settle at 84. This surge in open interest aligns with a price increase of 1460 rupees. Key technical levels provide guidance for potential price movements. Cotton candy finds support at 60440, with the possibility of a test of 59490 if this level is breached. On the upside, resistance is anticipated at 62120, and a move above this level could lead to prices testing 62850.

Trading Ideas:

* Cottoncandy trading range for the day is 59490-62850.

* Cotton rose as sowing in India dropped by 2.11% to 122.99 lakh hectares

* Support also seen due to shrinking supplies at domestic market.

* Reports of lower acreages and firmness in ICE cotton prices will also support market sentiments up.

* In Rajkot, a major spot market, the price ended at 29107.7 Rupees dropped by -0.21 percent.

Turmeric

Turmeric saw a modest increase of 0.19%, closing at 15114, driven by emerging festive demand in the market. This demand, typically associated with the upcoming festive season, has been a supporting factor. Additionally, the limited availability of quality turmeric crops and a bleak production outlook for the upcoming season are likely to maintain firmness in prices. However, the potential for significant gains in turmeric prices is limited due to forecasts of substantial rainfall in September. The revival of the Southwest Monsoon in September is expected to bring rain to central and southern parts of India, which could bolster turmeric crop prospects. Export inquiries have remained subdued at current price levels, adding pressure to prices. Moreover, a shift in farmers' focus has led to expectations of a 20-25% decrease in turmeric sowing this year, particularly in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Despite these factors, turmeric exports during Apr-Jun 2023 increased by 16.87% to 57,775.30 tonnes compared to 49,435.38 tonnes exported during the same period in 2022. From a technical perspective, the turmeric market is currently experiencing fresh buying interest, with a 2.06% increase in open interest to settle at 15600. This increase in open interest aligns with a price increase of 28 rupees. Key technical levels provide guidance for potential price movements. Turmeric finds support at 14770, with the possibility of a test of 14426 if this level is breached. On the upside, resistance is expected at 15518, with prices potentially testing 15922 upon surpassing this level.

Trading Ideas:

* Turmeric trading range for the day is 14426-15922.

* Turmeric gained supported by emerging festive demand .

* Limited availability of quality crop and bleak production outlook for upcoming season is likely to support firmness in prices.

* Gains in turmeric is likely to be limited in wake of forecast of good rainfall in September.

* In Nizamabad, a major spot market, the price ended at 14248.45 Rupees gained by 1.4 percent.

Jeera

Jeera experienced a substantial increase of 5.15%, closing at 57650, driven by heightened buying activities in the market. Stockists are actively participating due to the rising festive demand. Dry inventory levels with millers have encouraged buying on price dips. However, there are concerns regarding bleak export inquiries, particularly from China. Demand from China has decreased in recent weeks, impacting overall exports from India. The uncertainty surrounding China's potential purchase of Indian cumin in October-November, before the arrival of new cumin supplies, adds complexity to market dynamics. Furthermore, drier weather conditions in Gujarat are expected to lead to increased arrivals, potentially capping upward price movements. FISS forecasts suggest that cumin demand is likely to exceed 85 lakh bags this year, with a projected supply of 65 lakh bags. Despite these factors, jeera exports during Apr-Jun 2023 showed a 13.16% increase at 53,399.65 tonnes compared to 47,190.98 tonnes exported during the same period in 2022. However, in June 2023, jeera exports dropped by 59.81% compared to May 2023, and by 51.78% compared to June 2022. From a technical perspective, the jeera market is undergoing short covering, evident from a 4.15% drop in open interest to settle at 5616, coupled with a price increase of 2825 rupees. Key technical levels offer guidance for potential price movements. Jeera finds support at 55450, with the possibility of a test of 53250 if this level is breached. On the upside, resistance is expected at 58980, with prices potentially testing 60310 upon surpassing this level.

Trading Ideas:

* Jeera trading range for the day is 53250-60310.

* Jeera gains on increased buying as Stockists are showing interest in wake of rising festive demand.

* Bleak export enquires are still a concern for exporters as demand from China has dropped in recent weeks

* Drier weather condition in Gujarat will also lead to rise in arrivals that will cap the upwards move.

* In Unjha, a major spot market, the price ended at 57628.15 Rupees gained by 1.16 percent.

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