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Gold

Gold yesterday settled up by 0.42% at 58819 amid safe-haven buying as activity in both the U.S. manufacturing and service sectors contracted more than expected. The gold market was seeing some solid buying momentum ahead of the disappointing data and has since pushed higher in initial to a fresh session high in initial reaction. Along with slowing economic growth, the report noted that inflation pressure remains stubbornly high, impacting demand. The S&P Global Flash U.S. manufacturing PMI data dropped to 47.0%, down from July's reading of 49. Swiss gold exports fell 2% in July from June as lower deliveries to China and India failed to compensate for a sharp growth in supplies to Turkey, Swiss customs data showed. Supplies to China fell by 19% in July to their weakest since May, 2022, while shipments to India slumped by 60% to their lowest level since April, 2023, the data showed. Shipments to Turkey, where demand has been strong amid high inflation, jumped by more than twofold in July and reached their highest level since February, 2023. Asian ETFs bought $132 million of gold in July, largely propelled by surging Japanese demand with inflows totaling $170 million. Technically market is under short covering as the market has witnessed a drop in open interest by -3.44% to settle at 12508 while prices are up 245 rupees, now Gold is getting support at 58600 and below same could see a test of 58380 levels, and resistance is now likely to be seen at 58945, a move above could see prices testing 59070.
Trading Ideas:
* Gold trading range for the day is 58380-59070.
* Gold gains as US manufacturing and service activity contracted more than expected
* The S&P Global Flash U.S. manufacturing PMI data dropped to 47.0%, down from July's reading of 49.
* Swiss gold exports down in July due to lower shipments to China, India

Silver

Silver yesterday settled up by 2.81% at 74004 after a near-stalling of business activity in August raised doubts over the strength of US economic growth in the third quarter. Also, cautious reins ahead of the Fed Chair Jerome Powell’s address at the central bank’s annual symposium at Jackson Hole later this week for further clues on the rates path. Sales of new single-family houses in the United States climbed 4.4 percent to a seasonally adjusted annualized rate of 714 thousand in July 2023, reaching the highest level since February 2022 and surpassing the market consensus of 705 thousand. Sales in the West were up 21.5 percent to a rate of 181 thousand, while those in the Midwest surged 47.4 percent to 84 thousand. The S&P Global US Manufacturing PMI fell to 47 in August 2023 from 49 in July, below market expectations of 49.3, preliminary data showed. The latest reading signalled a solid deterioration in operating conditions midway through the third quarter. The decline was the second-sharpest since January, primarily driven by a renewed decrease in output and a more pronounced drop in new orders. The S&P Global US Services PMI fell to 51 in August of 2023 from 52.3 in the previous month. Technically market is under short covering as the market has witnessed a drop in open interest by -15.44% to settle at 8937 while prices are up 2022 rupees, now Silver is getting support at 72715 and below same could see a test of 71425 levels, and resistance is now likely to be seen at 74690, a move above could see prices testing 75375.
Trading Ideas:
* Silver trading range for the day is 71425-75375.
* Silver rallied after a near-stalling of business activity in August
* The yield on the 10-year US Treasury note retreated toward 4.2% after hitting a 15-year high of 4.342% on August 21
* Sales of new single-family houses in the United States climbed 4.4 percent

Crudeoil

Crudeoil yesterday settled down by -1.29% at 6555 due to concerns that a restrictive monetary policy in the US and an economic slowdown in China could hurt energy demand. 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, the U.S. Energy Information Administration (EIA) said in its weekly Petroleum Status Report. 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, Energy Information Administration data showed. Crude inventories fell by 6.1 million barrels in the week to Aug. 18 to 433.5 million barrels, compared with analysts' expectations in a Reuters poll for a 2.8 million-barrel drop. The focus shifted to the upcoming annual symposium of central bankers at Jackson Hole this week, where policymakers might provide insights into the future direction of interest rates. Sluggish demand in top crude importer China and the lack of forceful policy measures from Beijing to bolster growth also weighed on sentiment. Additionally, EIA data showed that US crude inventories dropped by about 6.135 million barrels last week, more than the 2.85 million barrel draw expected. Technically market is under fresh selling as the market has witnessed a gain in open interest by 54.54% to settle at 6877 while prices are down -86 rupees, now Crudeoil is getting support at 6441 and below same could see a test of 6326 levels, and resistance is now likely to be seen at 6657, a move above could see prices testing 6758.
Trading Ideas:
* Crudeoil trading range for the day is 6326-6758.
* Crudeoil dropped as concerns about an economic slowdown in China could hurt demand.
* US weekly production of crude oil rose to highest since March 2020 – EIA
* U.S. crude oil inventories fell last week as refinery processing surged and crude output reached their highest

Naturalgas

Naturalgas yesterday settled down by -2.59% at 207 as the amount of gas flowing to liquefied natural gas (LNG) export plants remained low due to maintenance outages and a bigger 2% drop in oil futures spurred by grim manufacturing data. Gas futures fell despite forecasts for hotter weather and higher gas demand over the next two weeks than previously expected as a heat wave moves slowly across the central U.S. Russia produced 34.3 billion cubic metres (bcm) of natural gas in July, down 6.7% from the same month last year, according to data. It was also a drop of 0.9% from June. In the January-July period, natural gas output reached 302 bcm, down 14.2% from the same period in 2022. LNG output in January-July decreased by 4.4% year-on-year to 18.7 million metric tons, according to Rosstat. Gasoline output reached 3.8 million metric tons in July, down 1.0% from a year earlier and up 3.2% from June. For the first seven months of the year gasoline output reached 25.6 million metric tons, up 3.7% from the year-earlier period. U.S. natural gas storage is on track to end the April-October summer injection season at 3.923 trillion cubic feet (tcf) on Oct. 31, the most since 2020. Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.6% to settle at 28105 while prices are down -5.5 rupees, now Naturalgas is getting support at 203.9 and below same could see a test of 200.9 levels, and resistance is now likely to be seen at 212.1, a move above could see prices testing 217.3.
Trading Ideas:
* Naturalgas trading range for the day is 200.9-217.3.
* Natural gas eased as the amount of gas flowing to LNG export plants remained low
* Prices fell despite forecasts for hotter weather and higher gas demand over the next two weeks than previously expected.
* Russia's natural gas output falls 6.7% y/y in July


Copper

Copper yesterday settled up by 0.79% at 738.9 as demand prospects from top consumer China improved and the market shrugged off pressure from a strong U.S. dollar. Providing further support for copper, stockpiles monitored by the three major futures exchanges are just above a 15-year low at 170,000 tonnes. Meanwhile, the downturn in euro zone business activity has deepened more than expected this month in a broad-based fall across the region, particularly in Germany, Europe's largest economy. 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. When adjusted for changes in inventory in Chinese bonded warehouses, there was a 120,000 metric tons deficit in June compared with a 100,000 metric tons deficit in May, the ICSG said. Technically market is under short covering as the market has witnessed a drop in open interest by -19.49% to settle at 2507 while prices are up 5.8 rupees, now Copper is getting support at 735.3 and below same could see a test of 731.6 levels, and resistance is now likely to be seen at 741.2, a move above could see prices testing 743.4.
Trading Ideas:
* Copper trading range for the day is 731.6-743.4.
* Copper gains as demand prospects from China improved
* Copper stockpiles monitored by the three major futures exchanges are just above a 15-year low at 170,000 tonnes.
- The downturn in euro zone business activity has deepened more than expected this month

Zinc

Zinc yesterday settled up by 0.43% at 212.15 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. 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. While the exact quantity bought by Citi is difficult to determine, zinc stocks in LME warehouses in Singapore have jumped 54% to 141,750 metric tons over the past two days, the highest since March 2022. Much of the zinc going on LME warrant was sold into the system by Swiss-based commodity trader Trafigura and London-listed mining giant Glencore. London Metal Exchange (LME) zinc stocks have more than doubled to 145,975 metric tons over the last month and are now at their highest level since February 2022. Technically market is under short covering as the market has witnessed a drop in open interest by -13.04% to settle at 2401 while prices are up 0.9 rupees, now Zinc is getting support at 211.3 and below same could see a test of 210.3 levels, and resistance is now likely to be seen at 212.9, a move above could see prices testing 213.5.
Trading Ideas:
* Zinc trading range for the day is 210.3-213.5.
* Zinc gains amid China's policy measures aimed at supporting economic recovery
* The interest rate reductions orchestrated by PBOC, coupled with a gradual revival of domestic demand, also provided some support.
* Citibank has bought large amounts of zinc on the London Metal Exchange



Aluminium

Aluminium yesterday settled down by -0.1% at 198.65 as 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 long liquidation as the market has witnessed a drop in open interest by -15.82% to settle at 1522 while prices are down -0.2 rupees, now Aluminium is getting support at 197.8 and below same could see a test of 196.8 levels, and resistance is now likely to be seen at 199.9, a move above could see prices testing 201.
Trading Ideas:
* Aluminium trading range for the day is 196.8-201.
* Aluminium dropped as inventories LME climbed to the highest in more than a month
* Rising inventories can indicate the market has surplus metal and investors have been concerned about tepid demand in China
* China’s aluminum ingots social inventory declined to nearly 500,000 mt.

Cottoncandy

Cottoncandy yesterday settled down by -0.54% at 59380 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 28848.05 Rupees gained by 0.04 percent. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.4% to settle at 278 while prices are down -320 rupees, now Cottoncandy is getting support at 59100 and below same could see a test of 58830 levels, and resistance is now likely to be seen at 59760, a move above could see prices testing 60150.
Trading Ideas:
* Cottoncandy trading range for the day is 58830-60150.
* 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 28848.05 Rupees gained by 0.04 percent.


Turmeric

Turmeric yesterday settled up by 0.04% at 16170 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 14507.6 Rupees dropped by -1.64 percent. Technically market is under short covering as the market has witnessed a drop in open interest by -3.13% to settle at 16225 while prices are up 6 rupees, now Turmeric is getting support at 15688 and below same could see a test of 15206 levels, and resistance is now likely to be seen at 16516, a move above could see prices testing 16862.
Trading Ideas:
* Turmeric trading range for the day is 15206-16862.
* 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 14507.6 Rupees dropped by -1.64 percent.

Jeera

Jeera yesterday settled down by -1.87% at 56830 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 58546.25 Rupees dropped by -0.13 percent. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.49% to settle at 6552 while prices are down -1085 rupees, now Jeera is getting support at 55220 and below same could see a test of 53610 levels, and resistance is now likely to be seen at 58020, a move above could see prices testing 59210.
Trading Ideas:
* Jeera trading range for the day is 53610-59210.
* 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 58546.25 Rupees dropped by -0.13 percent.

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