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Gold

Gold yesterday settled up by 0.14% at 58574 as prices not attracting any safe-haven flows following disappointing U.S. housing sales data. Existing home sales declined to a seasonally adjusted and annualized rate dropped 2.2% to 4.07 million units last month, compared to June's annualized rate of 4.16 million homes, the National Association of Realtors (NAR) said. S&P Global followed Moody's in cutting its credit ratings and outlook on multiple U.S. regional banks, saying higher funding costs and troubles in the commercial real estate sector will likely test the credit strength of lenders. A relentless rate-hike campaign by the U.S. Federal Reserve has raised deposit costs at banks, which have been forced to pay out higher interest to keep depositors from fleeing to other high-yielding alternatives. Fed officials at their last meeting largely remained concerned that inflation would fail to recede and suggested they may continue raising interest rates. “Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” according to minutes. Asian ETFs bought $132 million of gold in July, largely propelled by surging Japanese demand with inflows totaling $170 million. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.68% to settle at 12954 while prices are up 84 rupees, now Gold is getting support at 58395 and below same could see a test of 58220 levels, and resistance is now likely to be seen at 58710, a move above could see prices testing 58850.
Trading Ideas:
* Gold trading range for the day is 58220-58850.
* Gold prices unchanged as U.S. existing home sales drop 2.2% in July
* Existing home sales declined to a seasonally adjusted and annualized rate dropped 2.2% to 4.07 million units last month
* S&P downgrades multiple US banks on growing liquidity worries

Silver

Silver yesterday settled up by 0.45% at 71982 on prospects that interest rates remain elevated for some time. Investors grew confident that Federal Reserve Chair Jerome Powell's speech at the annual symposium in Jackson Hole this week could set the stage for an extended period of higher interest rates. Still, demand for commodity is expected to increase. Efforts to curb carbon emissions sped up the development of solar panel technologies that need higher conduction needs, causing sharp upgrades in forecasts for the commodity's demand. Solar panel companies are expected to make up 14% of global silver consumption, compared to 5% in 2014. Minutes of the FOMC released a few days earlier had shown the Fed to be persistent in its focus on inflation combat. The CME FedWatch tool currently shows a probability of 11.5 percent for a rate hike of 25 basis points in the review due on September 20. The probability for a quarter-point rate hike in November is however higher at 35.5 percent. Producer prices in Germany declined by 6.0% yoy in July 2023, reversing from a 0.1% rise in June while pointing to a first drop since November 2020. Technically market is under short covering as the market has witnessed a drop in open interest by -12.38% to settle at 10317 while prices are up 320 rupees, now Silver is getting support at 71620 and below same could see a test of 71265 levels, and resistance is now likely to be seen at 72190, a move above could see prices testing 72405.
Trading Ideas:
* Silver trading range for the day is 71265-72405.
* Silver gains on prospects that interest rates remain elevated for some time.
* Fed to be persistent in its focus on inflation combat.
* Solar panel companies are expected to make up 14% of global silver consumption, compared to 5% in 2014.
 

Crudeoil

Crudeoil yesterday settled down by -0.49% at 6641 as demand concerns and rate hike worries were back in the spotlight. Weak economic data from China and fears of the Fed keeping rates higher for longer abetted the bearish sentiment for the black liquid. Output cuts from OPEC+ majors Saudi Arabia and Russia have been boosting oil prices since June and the latest data showed US crude inventories shrunk to their lowest levels since January. Meanwhile, China’s central bank urged banks to increase lending in a bid to shore up the economy but Chinese banks opted for a smaller-than-anticipated reduction in their benchmark lending rate on Monday, and they refrained from adjusting the reference rate for mortgages. Money managers cut their net long U.S. crude futures and options positions in the week to August 15, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 28,752 contracts to 149,939 during the period. U.S. oil output from top shale-producing regions is set to fall in September to its lowest level since May 2023, U.S. Energy Information Administration data showed. Technically market is under fresh selling as the market has witnessed a gain in open interest by 22.72% to settle at 4450 while prices are down -33 rupees, now Crudeoil is getting support at 6613 and below same could see a test of 6585 levels, and resistance is now likely to be seen at 6674, a move above could see prices testing 6707.
Trading Ideas:
* Crudeoil trading range for the day is 6585-6707.
* Crude oil declined amid demand concerns and rate hike worries.
* Weak economic data from China and fears of the Fed keeping rates higher for longer abetted the bearish sentiment
* U.S. oil output is expected to fall to 9.41 million barrels per day (bpd) in September, EIA data showed.

Naturalgas

Naturalgas yesterday settled down by -2.79% at 212.5 as the amount of gas flowing to liquefied natural gas (LNG) export plants remains low due to maintenance outages and as a tropical storm reduces power demand in Texas. That price decline came despite forecasts for gas demand to rise more than previously expected next week with the weather across much of the country expected to remain hotter than normal through at least early September. The U.S. National Hurricane Center predicted that Harold would make landfall along the South Texas coast on Tuesday. Additionally, the flow of gas to US LNG export plants has diminished in August, primarily due to reduced operations at Cheniere Energy's Sabine Pass facility in Louisiana. Nevertheless, meteorologists forecast that hotter-than-usual weather will persist through early September. Data provider Refinitiv said average gas output in the U.S. Lower 48 states had eased to 101.7 billion cubic feet per day (bcfd) so far in August from 101.8 bcfd in July. That compares with a monthly record of 102.2 bcfd in May. Refinitiv forecast U.S. gas demand, including exports, would rise from 102.7 bcfd this week to 103.1 bcfd next week. Technically market is under fresh selling as the market has witnessed a gain in open interest by 10.4% to settle at 32157 while prices are down -6.1 rupees, now Naturalgas is getting support at 209.8 and below same could see a test of 207 levels, and resistance is now likely to be seen at 217.2, a move above could see prices testing 221.8.
Trading Ideas:
* Naturalgas trading range for the day is 207-221.8.
* Natural gas eased gas flowing to LNG export plants remains low.
* Pressure also seen as a tropical storm reduces power demand in Texas.
* That price decline came despite forecasts for gas demand to rise more than previously expected next week


Copper

Copper yesterday settled up by 0.6% at 733.1 driven by policy measures aimed at supporting China's wavering economic recovery, coupled with indications of increasing demand from the Chinese market. Beijing's authorization for 12 provinces and regions to issue 1.5 trillion yuan of special financing bonds is poised to enhance funding for construction and infrastructure ventures. Moreover, the interest rate reductions orchestrated by the People's Bank of China, coupled with a gradual revival of domestic demand, have also provided some support. The global refined copper market showed a 90,000 metric tons deficit in June, compared with a 58,000 metric tons deficit in May, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first 6 months of the year, the market was in a 213,000 metric tons surplus compared with a 196,000 metric tons deficit in the same period a year earlier, the ICSG said. World refined copper output in June was 2.25 million metric tons, while consumption was 2.34 million metric tons. 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. Technically market is under short covering as the market has witnessed a drop in open interest by -22.19% to settle at 3114 while prices are up 4.4 rupees, now Copper is getting support at 729.5 and below same could see a test of 725.8 levels, and resistance is now likely to be seen at 735.5, a move above could see prices testing 737.8.
Trading Ideas:
* Copper trading range for the day is 725.8-737.8.
* Copper gains on China stimulus hopes
* Copper market in 90,000 metric tons deficit in Jun 2023 – ICSG
* Rising output in China, Congo drives copper market to surplus in H1 – ICSG

Zinc

Zinc yesterday settled up by 0.48% at 211.25 as China's refined zinc output was 551,100 mt, a decrease of 1,400 mt or 0.26% month-on-month, and a year-on-year increase of 15.79%. From January to July, the cumulative output of refined zinc reached 3.777 million mt, a year-on-year increase of 9.59%. The domestic zinc alloy production in July was 86,983 mt, an increase of 8,756 mt from the previous month. The output reduction of domestic smelters was mainly seen in Inner Mongolia, Shaanxi, Gansu and Xinjiang, and slightly lower than expected. Smelters were basically undergoing maintenance according to plans, and there was no unexpected shutdown except in Xinjiang. Zinc inventories in LME-registered warehouses have surged to a 17-month high, highlighting a market surplus amid weak demand. Backwardation in LME zinc strengthened, with the cash contract at a $12.50-a-ton discount to the three-month contract, the biggest discount since July 21, as inventories in LME-registered warehouses surged. The People’s Bank of China authorized the National Interbank Lending Center to announce the loan prime rate (LPR) on August 21, 2023, as followed. The one-year LPR is 3.45%, the expected 3.40%, and the previous value is 3.55%. And the 5-year LPR is 4.2%, expected 4.05%, previous 4.2%. Technically market is under short covering as the market has witnessed a drop in open interest by -10.94% to settle at 2761 while prices are up 1 rupees, now Zinc is getting support at 209.8 and below same could see a test of 208.4 levels, and resistance is now likely to be seen at 212.6, a move above could see prices testing 214.
Trading Ideas:
* Zinc trading range for the day is 208.4-214.
* Zinc gains as China's refined zinc output dropped to 551,100 mt
* The output reduction of domestic smelters was mainly seen in Inner Mongolia, Shaanxi, Gansu and Xinjiang.
* Zinc inventories in LME-registered warehouses have surged to a 17-month high


Aluminium

Aluminium yesterday settled up by 0.81% at 198.85 as China’s aluminum ingots social inventory declined to nearly 500,000 mt. Aluminium inventories in warehouses registered by the London Metal Exchange climbed to the highest in more than a month after inflows of 38,725 metric tons into South Korea, LME data showed. The metal, which arrived in storage facilities at the port of Gwangyang, pushed up total LME inventories by 8% to 529,775 metric tons, the highest since July 12, according to the data. Rising inventories can indicate the market has surplus metal and investors have been concerned about tepid industrial metals demand in China amid weak factory activity and struggles in the property sector. At the same time, aluminium output has been rising in top producer China, reaching near-record levels in July as smelters in the southwestern province of Yunnan ramped up production as hydropower supplies improved. In July, aluminium stocks of Russian origin in LME depots that are available to the market accounted for 81% of the total, a monthly LME report showed. 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. Technically market is under short covering as the market has witnessed a drop in open interest by -23% to settle at 1808 while prices are up 1.6 rupees, now Aluminium is getting support at 197.5 and below same could see a test of 196.2 levels, and resistance is now likely to be seen at 199.7, a move above could see prices testing 200.6.
Trading Ideas:
* Aluminium trading range for the day is 196.2-200.6.
* Aluminium rises as China’s ingot inventory drops to 500,000 mt
* LME warehouse stocks of Aluminum surge, highest in a month with 38,725 tons to South Korea
* Global aluminium output falls 0.5% year on year in July – IAI

Cottoncandy

Cottoncandy yesterday settled down by -0.23% at 59700 as economic concerns surrounding top buyer China clouded the demand outlook for the natural fiber. Global cotton production will likely decline next season (October 2023-September 2024) by three per cent, while consumption may remain stagnant and ending stocks could be lower. Cotton Association of India (CAI) maintained the cotton crop production forecast for the 2022-23 season at 311.18 lakh bales. The total cotton supply for October 2022 to July 2023 is estimated at 332.30 lakh bales, which consists of arrivals of 296.80 lakh bales, imports of 11.50 lakh bales and the opening stock estimated by the CAI at 24 lakh bales at the beginning of the season. 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 28926.65 Rupees dropped by -0.08 percent. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.33% to settle at 297 while prices are down -140 rupees, now Cottoncandy is getting support at 59580 and below same could see a test of 59460 levels, and resistance is now likely to be seen at 59860, a move above could see prices testing 60020.
Trading Ideas:
* Cottoncandy trading range for the day is 59460-60020.
* Cotton dropped amid concerns over a slowdown in China.
* In Gujarat, Cotton sowing grows by nearly 5% against sown area of 2022
* Global cotton production will likely decline next season by three per cent
* In Rajkot, a major spot market, the price ended at 28926.65 Rupees dropped by -0.08 percent.


Turmeric

Turmeric yesterday settled up by 1.04% at 16164 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 14749.2 Rupees gained by 3.31 percent. Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.62% to settle at 16750 while prices are up 166 rupees, now Turmeric is getting support at 15904 and below same could see a test of 15644 levels, and resistance is now likely to be seen at 16492, a move above could see prices testing 16820.
Trading Ideas:
* Turmeric trading range for the day is 15644-16820.
* Turmeric prices gained amid limited availability of quality produce in the market.
* Sowing activities almost completed in Maharashtra and likely to pick up in Andhra Pradesh and Tamil Nadu
* In Jun 2023 around 18,356.57 tonnes was exported as against 19827.86 tonnes in May 2023 showing a drop of 7.42%.
* In Nizamabad, a major spot market, the price ended at 14749.2 Rupees gained by 3.31 percent.

Jeera

Jeera yesterday settled down by -2.2% at 57915 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 59891.8 Rupees dropped by -0.12 percent. Technically market is under long liquidation as the market has witnessed a remain unchanged in open interest by 0% to settle at 6456 while prices are down -1305 rupees, now Jeera is getting support at 57460 and below same could see a test of 56990 levels, and resistance is now likely to be seen at 58650, a move above could see prices testing 59370.
Trading Ideas:
* Jeera trading range for the day is 56990-59370.
* 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 59891.8 Rupees dropped by -0.12 percent.

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