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Gold

Gold experienced a slight decline of -0.15%, closing at 58,998, largely influenced by the recent strength of the U.S. Dollar and the significant surge in Treasury yields. The strong economic data coming from the United States has given the Federal Reserve more room to maintain a hawkish stance for an extended period.In particular, new unemployment claims in the U.S. dropped to their lowest level in over six months at the end of August, defying expectations of a modest increase and challenging previous indications of a softer labor market. Furthermore, the ISM Services PMI in the U.S. unexpectedly rose to a six-month high in August, indicating the resilience of major U.S. companies to high borrowing costs. This survey also pointed to increasing price pressures, coupled with elevated oil prices, raising concerns about inflation.Federal Reserve officials have been providing varying comments on the central bank's approach to interest rate hikes. Governor Wallace and Boston Federal Reserve President Susan Collins both expressed the need for a cautious approach to rate hikes. From a technical standpoint, the market is showing signs of fresh selling, with open interest increasing by 0.35% and settling at 11,886. Prices dropped by -90 rupees. Support for Gold is expected at 58,930, with the potential for testing 58,870 if it falls below this level. Resistance is likely at 59,090, and a move above this level could lead to testing 59,190.
Trading Ideas:
# Gold trading range for the day is 58870-59190.
# Gold dropped as the U.S. labor market remains fairly robust
# The U.S. Labor Department said that weekly jobless claims fell by 13,000 to 216,000
# Central banks stepped up gold buying in July – WGC

Silver

Silver witnessed a notable decline of -0.97%, closing at 71,770. This drop was influenced by the strength of the U.S. dollar, driven further by stronger-than-expected U.S. service sector data, which raised concerns about persistent inflation. Boston Fed President Susan Collins' warning about the potential need for more policy tightening added to uncertainty about the Federal Reserve's future actions. The U.S. dollar index initially climbed to 105.16 before retracing some gains, ultimately settling at 105.02, up 0.15%. In a surprising turn of events, the Labor Department reported an unexpected decrease in initial jobless claims, falling to 216,000, the lowest level since February. This marks the fourth consecutive week of declining jobless claims. This unexpected data, along with other factors, has led traders to speculate that the Federal Reserve may not raise rates further and could even consider rate cuts next year. From a technical standpoint, fresh selling was observed, with open interest increasing by 8.62% and settling at 16,342. Silver prices declined by -702 rupees. Support for Silver is expected at 71,430, with the possibility of testing 71,095 if it falls below this level. Resistance may come into play at 72,240, and surpassing this level could lead to testing 72,715.
Trading Ideas:
# Silver trading range for the day is 71095-72715.
# Silver dropped pressured by strength of dollar and runup in Treasury yields.
# Strong economic data added leeway for the Federal Reserve to remain hawkish for a prolonged period.
# The dollar index rose above the 105 mark, its highest in six months.

Crude oil

Crude oil recorded a significant decrease of -1.07%, closing at 72.27, driven by concerns that energy demand might weaken due to slowing global economic growth. Data revealed China's trade surplus narrowing in August, with declining exports attributed to softer external demand and imports suffering losses due to weak domestic consumption. Despite this, the international oil benchmark remains close to its highest levels since November last year, as Saudi Arabia and Russia, leaders of OPEC+, extended supply cuts until year-end. API data indicated a substantial decrease of about 5.5 million barrels in US crude stockpiles last week, marking the fourth consecutive weekly decline and surpassing expectations of a 1.429 million barrel draw. US crude oil stockpiles have dropped over 6% in the past month, reflecting high refinery utilization rates to meet global energy demand, according to the Energy Information Administration. Crude inventories fell by 6.3 million barrels, triple the expected 2.1 million barrel drop. Cushing, Oklahoma, delivery hub stocks also saw a significant decline of 1.8 million barrels. From a technical perspective, the market witnessed long liquidation, with open interest dropping by -24.43% and settling at 8,273. Prices declined by -78 rupees. Support for Crude oil is expected at 7,174, with the potential for testing 7,122 if it falls below this level. Resistance is likely at 7,285, and a move above this level could lead to testing 7,344.
Trading Ideas:
# Crudeoil trading range for the day is 7122-7344.
# Crude oil dropped on fears that energy demand could weaken
# OPEC+ leaders Saudi Arabia and Russia extended supply cuts to the end of the year.
# U.S. crude oil stockpiles fell for the fourth consecutive week, with inventories down over 6% in the last month

Natural gas

Natural gas saw a notable increase of 1.89%, closing at 215.4. This rise was attributed to evidence of lower supply levels. U.S. utilities added 33 billion cubic feet (bcf) of natural gas into storage during the week ending September 1st, in line with the previous week's increase of 32 bcf but below market expectations of a 43 bcf build. Total stockpiles reached 3.148 trillion cubic feet (tcf), 17.2% higher than last year and 7.6% above the five-year average. Cooler weather reduced the short-term outlook for air-conditioning use and gas consumption, though temperatures were still expected to be above normal until mid-September. Reduced operations at domestic LNG export facilities further contributed to supply constraints. On a daily basis, output was set to decline by approximately 2.8 billion cubic feet per day (bcfd) over the past few days, reaching a preliminary 11-week low of 100.2 bcfd on Thursday. From a technical perspective, the market experienced short covering, with open interest dropping by -13.25% and settling at 48,079. Natural gas prices rose by 4 rupees. Support for Natural gas is expected at 210.4, with the potential for testing 205.5 if it falls below this level. Resistance may come into play at 219.1, and exceeding this level could lead to testing 222.9.
Trading Ideas:
# Naturalgas trading range for the day is 205.5-222.9.
# Natural gas rebounded as markets gauged evidence of lower supply.
# US utilities added 33 bcf of natural gas into storage during the week ended September 1st, 2023
# Output was on track to drop about 2.8 bcfd over the past few days to a preliminary 11-week low of 100.2 bcfd


Copper

Copper experienced a significant decline of -0.75%, closing at 728.05. This drop was primarily driven by a strong U.S. dollar and a weakening yuan, which made metals more expensive in China, the world's top metals consumer. The Yangshan copper premium fell from its recent high, indicating a reduction in demand for copper imports into China. China's yuan also reached a 10-month low, despite exports and imports performing slightly better than expected in the country. However, China still faces challenges in meeting its economic growth target for the year, impacting risk sentiment in financial markets. Customs data revealed that China's copper imports declined by 5% in August compared to the previous year, as demand remained weak due to economic challenges and strong domestic production. Imports of unwrought copper and copper products totaled 473,330 metric tons in August. Additionally, China's refined copper output surged by 15.5% year-on-year in the same month, reaching a record high of 989,000 tons, exceeding expectations. From a technical standpoint, the market saw fresh selling, with open interest increasing by 10% and settling at 6,049. Copper prices dropped by -5.5 rupees. Support for Copper is expected at 724.9, with the possibility of testing 721.6 if it falls below this level. Resistance may come into play at 732.6, and surpassing this level could lead to testing 737.
Trading Ideas:
# Copper trading range for the day is 721.6-737.
# Copper fell as a strong dollar and weakening yuan made metals expensive in China.
# Yangshan copper premium fell from its highest since December last year at $61.50, indicating easing demand.
# China Aug copper imports slide on weak demand, high domestic supply

Zinc

Zinc recorded a modest gain of 0.54%, closing at 221.95. This increase was driven by a notable decline in China's refined zinc output in August, indicating potential supply constraints. China's refined zinc output for August decreased by 24,600 metric tons or 4.46% compared to the previous month. In the U.S., data related to the service industry in August exceeded expectations and showed signs of gaining momentum. New orders increased, and input prices rose, indicating strong consumer demand and economic activity. However, this also highlighted inflation concerns. China, after a prolonged absence from the international market, has increased its imports of refined zinc. In July, the country imported 76,800 metric tons, the highest monthly total since April 2019. Despite China's increased domestic production of refined zinc this year, the Shanghai market has been affected by low inventory levels and tight time-spreads. Shanghai Futures Exchange (ShFE) registered stocks remain modest at 43,181 tons. From a technical standpoint, the market witnessed fresh buying, with open interest increasing by 5.54% and settling at 4,459. Zinc prices rose by 1.2 rupees. Support for Zinc is expected at 220, with the possibility of testing 218 if it falls below this level. Resistance may come into play at 223.2, and surpassing this level could lead to testing 224.4.
Trading Ideas:
# Zinc trading range for the day is 218-224.4.
# Zinc gains as China's refined zinc output in August decreased 4.46% mom
# China has rediscovered its appetite for imports of refined zinc after a prolonged absence from the international market.
# Imports and exports in China still fell and Beijing still risks missing its economic growth target this year




Aluminium saw a marginal decline of -0.05%, closing at 201.25. This dip was influenced by bearish sentiment resulting from weak economic data out of China. The aluminium market is experiencing increasing supply pressures due to China's halt in production capacity beyond the current limit of 45 million tons and Indonesia's ban on bauxite exports. ANZ predicts a shift in the aluminium market towards a deficit by 2024, potentially driving prices higher. The bank maintains a price projection of $2,500 per ton for aluminium in the short term (0-3 months). Nonetheless, prevailing sentiment remains bearish, primarily due to uninspiring economic data from China. Aluminium stocks at major Japanese ports decreased by 1.9% to 350,600 metric tons as of the end of July. A global aluminium producer has offered Japanese buyers a premium of $120 per metric ton for October-December primary metal shipments, reflecting a 6% decrease from the current quarter. From a technical perspective, the market observed fresh selling, with open interest increasing by 2.9% and settling at 4,044. Aluminium prices declined by -0.1 rupees. Support for Aluminium is anticipated at 200.4, with the potential for testing 199.5 if it falls below this level. Resistance could be encountered at 201.8, and surpassing this level might lead to testing 202.3.
Trading Ideas:
# Aluminium trading range for the day is 199.5-202.3.
# Aluminium dropped as sentiment remain bearish due to weak economic data from China
# ANZ expects aluminium market to move back into deficit in 2024, supporting prices in short term
# Japan's July aluminium stocks drop 1.9% m/m



Cotton candy prices dipped by -0.56%, closing at 60,640, primarily due to concerns about demand from key buyer China. The U.S. Department of Agriculture (USDA) reported that 31% of the cotton crop was in good to excellent condition, slightly down from the previous week due to the impact of Hurricane Idalia. Heavy rainfall in China's Xinjiang region is expected to affect both the quality and quantity of cotton production in the area. India experienced a drop in cotton sowing compared to the previous year, largely due to poor monsoon conditions in Gujarat and other factors. Major mills closing and low stocks of old cotton crops also contributed to tight local supplies. Arrivals of the new cotton crop have begun in parts of North and South India, with prices currently above the minimum support price (MSP). The market expects increased arrivals after September 15. From a technical perspective, the market witnessed long liquidation, with open interest remaining unchanged at 92. Cotton candy prices decreased by -340 rupees. Support is anticipated at 60,500, with a possible test of 60,370 if this level is breached. Resistance might come into play at 60,760, with the potential for prices to test 60,890 if this level is surpassed.
Trading Ideas:
# Cottoncandy trading range for the day is 60370-60890.
# Cotton dropped amid worries about demand from China.
# However, heavy rainfall in China's Xinjiang region is expected to impact cotton quality and quantity.
# China's cotton production was lowered to 5.9 million metric tons on reduced planted area for 2023/24
# In Rajkot, a major spot market, the price ended at 29635.4 Rupees gained by 0.01 percent.


Turmeric

Turmeric prices experienced a decline of -2.69%, closing at 14,704, primarily due to profit booking driven by favorable crop conditions in central and southern regions. Upcoming weeks are expected to bring normal to above-normal rainfall in Maharashtra and Telangana, which is likely to benefit turmeric crop growth despite limited supply. Concerns arise from decreased turmeric cultivation in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, leading to uncertainty in price trends and potentially higher prices. Turmeric exports increased by 16.87% during Apr-Jun 2023 compared to the same period in 2022, reaching 57,775.30 tonnes. From a technical perspective, the market observed long liquidation, with open interest decreasing by -4.65% to 15,270. Turmeric prices declined by -406 rupees. Support is anticipated at 14,462, with a potential test of 14,220 if this level is breached. Resistance might come into play at 15,018, with the possibility of prices testing 15,332 if this level is surpassed.
Trading Ideas:
# Turmeric trading range for the day is 14220-15332.
# Turmeric dropped due to profit booking amid to favorable crop conditions.
# Export enquires has been subdued at prevailing levels that will also put pressure on prices.
# However, the turmeric supply remains limited.
# In Nizamabad, a major spot market, the price ended at 14045.2 Rupees gained by 0.49 percent.

Jeera

Jeera prices surged by 2.81% to settle at 61410 due to a decline in local market supplies. Festive season demand has intensified, drawing the attention of stockists due to dwindling miller stockpiles. However, Indian jeera's price competitiveness is unfavorable for exporters, limiting export activity. China, a major buyer, has reduced its purchases, impacting overall Indian jeera exports. The possibility of China resuming purchases in October-November adds market uncertainty. Dry weather in Gujarat is expected to boost arrivals, restraining upward price movement. FISS forecasts project cumin demand to surpass supply, with estimated demand at 85 lakh bags and likely supply at 65 lakh bags. In Apr-Jun 2023, jeera exports increased by 13.16% to 53,399.65 tonnes compared to the same period in 2022. However, in June 2023, exports dropped significantly by 59.81% compared to May 2023 and by 51.78% compared to June 2022. India faces its lowest monsoon rains in eight years, with El Niño affecting September precipitation. This may raise prices for essentials like sugar, pulses, rice, and vegetables, leading to food inflation.  Technically, the market has experienced short covering, with a 4.8% drop in open interest to 4524 while prices surged by 1680 rupees. Jeera has support at 59990 and could test 58550 levels if it falls below. On the upside, resistance is expected at 62490, and a breakthrough could lead to prices testing 63550.
Trading Ideas:
# Jeera trading range for the day is 58550-63550.
# Jeera prices have surged attributed to a decrease in local market supplies.
# The increased demand for jeera during festivals has piqued the interest of stockists
# 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 60237.65 Rupees gained by 0.27 percent.

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