IGI Logo

Gold

Gold prices experienced a slight decline of -0.25% to settle at $59,243 due to a strengthening U.S. dollar and rising U.S. Treasury yields. Investors were torn between disappointing figures from China and signs of a cooling U.S. economy. China's service sector growth slowed to an eight-month low, missing projections and undermining government efforts to boost recovery. However, gold held steady due to expectations of reduced monetary tightening by the Federal Reserve, triggered by softer economic data. In August, the U.S. unemployment rate unexpectedly rose to 3.8%, the highest since February 2022. Concurrently, U.S. manufacturing activity improved but remained in contraction for the tenth straight month. The demand for physical gold in China decreased, causing premiums to drop from recent highs. Chinese dealers sold gold at a $20-$38 an ounce premium over global spot prices, compared to $40-$60 just the previous week. From a technical perspective, the market is witnessing long liquidation, with open interest dropping by -0.27% to settle at 12,024. Gold prices have declined by -150 rupees. Support for gold is currently at 59,150, with the possibility of testing 59,050. On the upside, resistance is expected at 59,405, and a move above this level could lead to prices testing 59,560.

Trading Ideas:

* Gold trading range for the day is 59050-59560.

* Gold prices dropped amid a rising U.S. dollar and U.S. Treasury yields.

* Investors weighed disappointing figures from China against signs of cooling economy in the US.

* The US unemployment rate unexpectedly rose to 3.8% in August, the highest since February 2022.

Silver

Silver prices declined by -1.44% to settle at 73,445 amid a strengthening U.S. dollar. This came in response to weak economic data from China and the euro area, which raised concerns about slowing global growth. The dollar index reached its highest level since May due to risk aversion triggered by China's sluggish service sector growth in August. The Caixin services Purchasing Managers' Index (PMI) dropped to 51.8 from July's 54.1, falling below expectations. Furthermore, disappointing data from the euro area and the U.K. indicated weakening consumer demand and extended economic downturn into the services sector. The HCOB's final Composite PMI for the euro zone sank to 46.7 in August, the lowest since November 2020. In response to this economic environment, Fed funds futures traders now assign a 93% probability to the Federal Reserve keeping rates unchanged in its upcoming meeting, with only a 37% chance of a hike in November, according to the CME Group's FedWatch Tool. From a technical perspective, the silver market is undergoing long liquidation, with open interest declining by -1.47% to 13,972. Silver prices fell by -1,076 rupees. Key support for silver is at 73,015, potentially testing 72,580 on the downside. On the upside, resistance is expected at 74,120, and a move above this level could lead to prices testing 74,790.

Trading Ideas:

* Silver trading range for the day is 72580-74790.

* Silver fell as the dollar rose; China, euro data raised global growth worries

* Disappointing data from euro and U.K. signaled waning consumer demand

* The US report indicated a strong labor market but also an increase in the unemployment rate.

Crude oil

Crude oil prices increased by 1.53% to settle at $72.18 per barrel. This uptick was driven by Saudi Arabia's decision to extend its voluntary oil production cut of one million barrels per day for an additional three months, until the end of December. Saudi Arabia intends to maintain oil market stability and balance. They also noted that they would review this cut monthly, potentially deepening it or increasing production. Russia joined this effort by extending its voluntary reduction in oil exports by 300,000 barrels per day until year-end. On the demand side, concerns persisted about the health of China's economy due to disappointing services PMI figures. In the U.S., crude oil shipments via rail fell in June, but domestic shipments within the United States increased, while shipments from Canada to the U.S. declined. From a technical standpoint, the crude oil market is experiencing short-covering, as open interest dropped by -5.03% to settle at 10,398. Despite this, prices rose by 109 rupees. Now Crudeoil is getting support at 7081 and below same could see a test of 6945 levels, and resistance is now likely to be seen at 7327, a move above could see prices testing 7437.

Trading Ideas:

* Crudeoil trading range for the day is 6945-7437.

* Crude oil spikes as Saudi extends 1M bpd cut for 3 more months till Dec.

* Saudi Arabia added that the cut decision which has gone into implementation in July and was extended to include August and September

* Russia also extended its voluntary reduction in oil exports by 300,000 bpd until the end of the year.

Natural gas

Natural gas prices dropped by -2.04% to settle at 216.2 due to expectations of reduced demand in the coming weeks. Cooler seasonal weather has led to less air-conditioning usage and lower gas consumption in the short term. However, meteorologists anticipate that temperatures will remain above normal until mid-September. Additionally, decreased operations at U.S. LNG (liquefied natural gas) export facilities, including Cheniere Energy's Sabine Pass and Corpus Christi, have contributed to reduced gas flow for LNG exports. On the supply side, natural gas production in August saw a slight decrease compared to previous months. Daily output was on track to hit a preliminary four-month low of 99.2 billion cubic feet per day (bcfd). Meteorologists predict hotter-than-normal weather in the lower 48 U.S. states until at least September 16. The London Stock Exchange Group (LSEG) forecasts a decline in U.S. gas demand, including exports, from 104.4 bcfd this week to 101.7 bcfd next week, partly due to the long holiday weekend. Demand is expected to rise to 103.2 bcfd in two weeks, in part due to an expected increase in LNG exports. From a technical perspective, the natural gas market is experiencing fresh selling pressure, with open interest increasing by 26.09% to 47,728 while prices declined by -4.5 rupees. Key support for natural gas is at 213.2, potentially testing 210.1 on the downside. Resistance is expected at 220.7, with a

Trading Ideas:

* Naturalgas trading range for the day is 210.1-225.1.

* Natural gas dropped as investors anticipate lower demand in the upcoming weeks.

* Seasonally cooler weather is reducing air-conditioning use and gas consumption in the short term

* Reduced operations at US LNG export facilities, have contributed to lower gas flow for LNG exports

Copper

Copper prices increased by 0.52% to settle at $740.45, buoyed by improved demand prospects. China, a major consumer of copper, issued positive signals for its economy. A private-sector survey revealed that China's services activity expanded at the slowest rate in eight months, reflecting ongoing weak demand despite stimulus efforts. In the euro zone, business activity declined more rapidly than initially estimated in the past month. Copper inventories in LME-registered warehouses reached 107,425 tons, the highest since October 2022, with significant deliveries in August going to the United States, South Korea, and Taiwan. Although SHFE copper stockpiles increased slightly for two consecutive weeks, global copper demand remains promising due to the electric vehicle market and India's growing economy. India's copper demand is expected to rise by 40% to over 1.5 million tons by 2025. While global copper smelting activity remained largely steady in August, China's strong performance offset weaker readings elsewhere. A recent survey also unexpectedly revealed China's return to expansion mode in factory activity, with improvements in supply, domestic demand, and employment. Technically, the copper market is experiencing short-covering, with open interest dropping by -4.25% to settle at 5,120 while prices rose by 3.85 rupees. Copper finds support at 734.9, with the possibility of testing 729.2 on the downside. Resistance is expected at 744.1, and a move above this level could lead to prices testing 747.6.

Trading Ideas:

* Copper trading range for the day is 729.2-747.6.

* Copper gains supported by better demand prospects as top China issued further.

* Inventories of copper in LME-registered warehouses rose to 107,425 tons, the highest since October 2022

* SHFE copper stockpiles edged up for the second straight week last week, albeit at a moderate rate.

Zinc

Zinc prices inched up by 0.09% to settle at 220.5, partly supported by a decrease in LME zinc stocks, which fell by 2,000 tons to 151,575 tons. In China, services activity expanded at the slowest rate in eight months in August due to persistent weak demand despite stimulus measures. Similar declines were observed in the euro zone, where business activity worsened more rapidly than initially anticipated. Data from the International Lead and Zinc Study Group (ILZSG) indicated that the global zinc market surplus increased to 76,000 metric tons in June, up from 67,000 tons the previous month. During the first half of the year, the global surplus reached 370,000 metric tons compared to 241,000 tons in the same period the previous year. In a surprising turn, China's factory activity returned to expansion mode in August, as indicated by a private-sector survey. The Caixin/S&P Global manufacturing PMI increased from 49.2 in July to 51.0 in August. From a technical perspective, zinc is undergoing short-covering, with open interest decreasing by -3.73% to settle at 4,236 while prices rose by 0.2 rupees. Key support for zinc stands at 219, with the possibility of testing 217.4 on the downside. Resistance is expected at 222, and a move above this level could lead to prices testing 223.4.

Trading Ideas:

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

* Zinc gains as support after LME stocks decreased by 2,000 tons to 151,575 tons.

* China's services activity expanded at the slowest pace in eight months in August

* In euro zone, the decline in business activity accelerated faster than initially thought last month.

Aluminium

Aluminium prices experienced a slight decline of -0.3% to settle at 200.7, influenced by weak service sector data from China. The recent surge in metal prices, driven by stimulus measures aimed at revitalizing China's struggling property market, is being tempered. Aluminium stocks at major Japanese ports decreased by 1.9% to 350,600 metric tons by the end of July, down from 357,490 metric tons the previous month. Meanwhile, China's Yunnan province increased energy-intensive aluminium production after the end of power restrictions. LME data reveals an increase in cancelled warehouse receipts for LME aluminium, now at 281,050 tons, with a cancellation rate of 55.50%. Registered warehouse receipts have decreased to 225,350 tons. Although LME aluminium inventory initially increased in late August, it followed a downward trend afterward. On the macroeconomic side, domestic policies in China are having a significant impact on the markets. With the traditional peak seasons of September and October approaching, there are optimistic expectations on the consumer side. From a technical perspective, the aluminium market is undergoing fresh selling, with open interest rising by 1.24% to settle at 3,997 while prices declined by -0.6 rupees. Key support for aluminium is at 199.9, potentially testing 199 on the downside. Resistance is expected at 201.6, and a move above this level could lead to prices testing 202.4.

Trading Ideas:

* Aluminium trading range for the day is 199-202.4.

* Aluminium dropped under pressure from weak service sector data from China

* China's Yunnan province started ramping up energy-intensive aluminium production after the end of power curbs.

* Japan's July aluminium stocks drop 1.9% m/m

Cotton candy

Cotton candy prices dipped by -0.91% to settle at 60,940, primarily due to profit booking as the new cotton crop began arriving in parts of North and South India. The crop is arriving a bit earlier than usual, with daily arrivals reaching around 3,000 bales. The demand is expected to pick up gradually, with stronger arrivals anticipated post-September 15. In regions like Telangana, Andhra Pradesh, and Karnataka, raw cotton arrivals have commenced, particularly in places like Kurnool, Nandyal, Yemmiganur, Adoni, and Raichur. The cotton acreage has decreased this year due to erratic monsoon patterns, standing at 122.99 lakh hectares as of September 1, compared to 125.63 lakh hectares the previous year. Arrivals in Punjab have significantly decreased, with only one-third of the cotton arrival compared to the previous year. In Punjab, arrivals for the 2022-23 marketing season have reached 8.7 lakh quintals to date, whereas it was 28.89 lakh quintals for the entire 2021-22 season. In the Rajkot spot market, cotton candy prices ended at 29,635.4 Rupees, a marginal gain of 0.01%. From a technical standpoint, the cotton candy market is experiencing fresh selling, with open interest increasing by 8.24% to settle at 92, while prices declined by -560 rupees. Key support for cotton candy is at 60,640, with the potential for a test of 60,350 on the downside. Resistance is expected at 61,120, and a move above this level could lead to prices testing 61,310.

Trading Ideas:

* Cottoncandy trading range for the day is 60350-61310.

* Cotton dropped on profit booking as the new cotton crop has started arriving in parts of North and South India

* In Gujarat, Cotton sowing grows by nearly 5% with 2,679,346.00 hectares against sown area of 2022

* Cotton acreage stood at 122.99 lakh hectares as on September 1 compared with 125.63 lakh hectares a year ago.

* In Rajkot, a major spot market, the price ended at 29635.4 Rupees gained by 0.01 percent.

Turmeric

Turmeric prices experienced a 0.92% decline, closing at 15,048, primarily due to profit booking. Earlier, prices had gained support from emerging festive demand in the market. Factors such as limited availability of quality crops and a bleak production outlook for the upcoming season are expected to support price firmness. However, there are concerns that gains in turmeric prices might be limited due to the forecast of good rainfall in September. The Southwest Monsoon is expected to revive in September, bringing much-needed rain to central and southern parts of the country. This could potentially boost crop yields and ease supply concerns. Export inquiries have been subdued at prevailing price levels, which may exert additional pressure on prices. Furthermore, a shift in focus by farmers 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. Turmeric exports during April-June 2023 showed a positive trend, rising by 16.87% to 57,775.30 tonnes compared to the same period in 2022. This increase in exports indicates a healthy demand for Indian turmeric in the international market. From a technical perspective, the turmeric market witnessed fresh selling, with open interest increasing by 0.63% to settle at 15,975 contracts. Turmeric is currently finding support at 14,892, with the potential for a test of 14,736 if this level is breached. On the upside, resistance is expected at 15,252, and prices could test 15,456 if this level is surpassed.

Trading Ideas:

* Turmeric trading range for the day is 14736-15456.

* Turmeric dropped on profit booking after prices gained 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 13976.2 Rupees dropped by -1.18 percent.

Jeera

Jeera (cumin) prices experienced a 1% decline, closing at 60,015, primarily due to profit booking after recent price gains driven by increased buying activities in the market. Stockists have been showing interest in response to rising festive demand. However, a significant concern for exporters is the bleak export inquiries, particularly from China. Demand from China has dropped in recent weeks and is expected to remain sluggish, which could limit further price gains. China has traditionally been a major buyer of Indian jeera, and the impact of reduced buying is affecting overall exports from India.  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 April-June 2023 showed a positive trend, rising by 13.16% to 53,399.65 tonnes compared to the same period in 2022. However, there was a significant drop in jeera exports in June 2023, with only 10,411.14 tonnes exported, down by 59.81% from May 2023 and 51.78% from June 2022. From a technical perspective, the jeera market witnessed long liquidation, with open interest dropping by -5.37% to settle at 5,130 contracts. Jeera is currently finding support at 59,310, with the potential for a test of 58,600 if this level is breached. On the upside, resistance is expected at 60,920, and prices could test 61,820 if this level is surpassed.

Trading Ideas:

* Jeera trading range for the day is 58600-61820.

* Jeera dropped on profit booking after prices gained 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 60516.25 Rupees gained by 0.01 percent.re

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer