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Gold

Gold prices edged up by 0.27% to settle at 69,895 as a dip in U.S. Treasury yields bolstered the precious metal, with investors increasingly confident that the Federal Reserve will begin lowering interest rates in September. Fed policymakers have signaled growing confidence that inflation is cooling sufficiently to allow for rate cuts, with decisions on the timing and size of these cuts likely to be driven by upcoming economic data rather than stock market movements. The market's attention is now turning to the upcoming U.S. Consumer Price Index (CPI) for further insights into the Fed's policy trajectory. In the U.S., initial jobless claims fell by 17,000 to a seasonally adjusted 233,000 for the week ending August 3, indicating some resilience in the labor market despite earlier concerns. However, the four-week moving average for new claims rose to 240,750, suggesting some underlying softness. On the global front, gold demand in India saw a slight increase due to a correction in prices, though market volatility has led some buyers to delay purchases. The recent reduction in import duties on gold in India is expected to boost demand ahead of the festival season. In China, gold premiums firmed, driven by safe-haven buying, though retail sales of gold jewelry remained subdued. Technically, the gold market is experiencing short covering, with a 1.89% drop in open interest to 17,267 contracts as prices rose by 191 rupees. Gold is currently supported at 69,575, with further downside potential testing 69,260 levels. On the upside, resistance is seen at 70,100, and a break above this level could push prices towards 70,310.
 

Trading Ideas:
* Gold trading range for the day is 69260-70310.
* Gold gains as investors grew confident the Fed will lower interest rates in September.
* Fed's policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts ahead.
* Gold demand in India crept up due to a correction in prices, although volatility in the market prompted some buyers to postpone purchases.


Silver
Silver prices edged down by -0.09% to settle at 80,543, as the U.S. dollar maintained its strength following better-than-expected jobless claims data, which eased fears of an impending economic downturn. Despite this slight decline, silver's downside was limited by ongoing geopolitical risks and expectations of a potential Federal Reserve rate cut. The metal's safe-haven appeal was reinforced by escalating tensions in the Middle East, with markets on edge over potential retaliatory strikes by Iran against Israel, and a rare Ukrainian attack on Russia adding to the global uncertainty. Market participants remain divided on the scale of the anticipated Fed rate cut in September, with opinions split between a 50 basis points reduction and a more modest 25 basis points cut. This uncertainty followed a notable drop in initial weekly jobless claims in the U.S., which fell by 17,000 to 230,000 for the week ending August 3rd, below market expectations of 240,000. This decline alleviated some concerns about the U.S. labor market's health, which had been flagged by the previous week's upwardly revised 250,000 claims, the highest in a year. Despite the improvement, the claim count remains above this year’s average, reflecting a softening labor market, though it continues to be historically tight. Technically, the silver market is under fresh selling pressure, as evidenced by a 2.09% increase in open interest, bringing it to 28,469 contracts. Silver is currently supported at 80,080, with further downside potentially testing 79,615. On the upside, resistance is expected at 80,985, with a move above this level possibly leading to a test of 81,425.
 

Trading Ideas:
* Silver trading range for the day is 79615-81425.
* Silver dropped as better-than-expected US jobless claims data alleviated fears of an economic downturn.
* The metal’s safe-haven appeal was bolstered by escalating geopolitical tensions.
* The latest data shows the U.S. labor market pulled back from the brink last week.


Crudeoil
Crude oil prices rose by 0.34% to settle at 6,444 as positive U.S. jobs data alleviated concerns over demand, while escalating tensions in the Middle East and supply disruptions continued to fuel supply fears. The ongoing conflict in the region, particularly disruptions at Libya's largest oil field, Sharara, and a rare Ukrainian attack on Russian assets, further exacerbated supply risks. Additionally, crude prices received support from the latest U.S. EIA report, which showed a more significant-than-expected drop in weekly crude inventories to a six-month low. U.S. commercial stocks of crude and refined products in OECD countries were reported at 2,761 million barrels at the end of June, indicating tight market conditions. U.S. crude oil production rose by approximately 100,000 bpd to a record high of 13.4 million bpd in the week ending August 2, 2024, reflecting increased output after reaching a previous record of 13.3 million bpd in early July. The EIA report also highlighted that crude oil inventories in the U.S. fell by 3.728 million barrels for the week ending August 2, significantly exceeding market expectations of a 0.4 million barrel draw. On the other hand, stocks at the Cushing, Oklahoma delivery hub increased by 579 thousand barrels, while gasoline and distillate fuel inventories rose by 1.34 million and 949 thousand barrels, respectively. Technically, the crude oil market is experiencing short covering, with a significant decrease in open interest by -7.83% to settle at 9,408 contracts. Crude oil is currently finding support at 6,389, with a potential test of 6,334 levels on the downside. Resistance is expected at 6,486, and a break above this level could push prices toward 6,528.
 

Trading Ideas:
* Crudeoil trading range for the day is 6334-6528.
* Crude oil gains as fears of a widening Middle East conflict continue to raise supply risks.
* Supply concerns were further heightened by disruptions in Libya's largest oil field, Sharara.
* Data showed weekly EIA crude inventories dropping more than expected to a six-month low.


Naturalgas
Natural gas prices increased by 0.5% to settle at 180.5, supported by forecasts for hotter weather and higher demand in the coming week. The slight price uptick is attributed to these weather-driven demand expectations, despite a slight dip in output. Gas production in the Lower 48 states has averaged 102.9 bcfd so far in August, slightly down from 103.4 bcfd in July and below the record high of 105.5 bcfd set in December 2023. Asian spot LNG prices have remained elevated, tracking European gains amid concerns over potential supply disruptions. LSEG forecasts indicate that gas demand in the Lower 48 states, including exports, is expected to fall to 104.0 bcfd this week from 109.9 bcfd last week, before rebounding to 105.1 bcfd next week. The market also witnessed volatility due to Russian gas continuing to flow via Ukraine despite ongoing conflicts near key transit points. The U.S. EIA has revised its natural gas output forecast downward for this year, predicting an average output of 103.3 bcfd, slightly lower than the previous forecast of 103.5 bcfd. However, gas consumption is expected to rise, averaging 89.8 bcfd this year. In terms of storage, U.S. utilities added 21 Bcf of gas into storage during the week ending August 2, 2024, bringing total stockpiles to 3,270 Bcf, which is above both last year's levels and the five-year average. Technically, the natural gas market is experiencing short covering, with open interest dropping by 2.3% to 42,664 contracts. Support for natural gas is at 177.1, with further downside potentially testing 173.7. Resistance is likely at 184, with a move above this level possibly leading to a test of 187.5.
 

Trading Ideas:
* Naturalgas trading range for the day is 173.7-187.5.
* Natural gas gains aided by forecasts for hotter weather and higher demand for the next week.
* Gas output in the Lower 48 states had risen to an average of 102.9 bcfd so far in August
* Asian spot LNG prices remained at their highest level in over seven months, tracking European gains.


Copper
Copper prices gained 0.32% to settle at 776.6, supported by expectations of potential rate cuts and stronger-than-expected U.S. economic data, which alleviated some concerns about demand. U.S. Federal Reserve policymakers have shown increasing confidence that inflation is cooling, which could pave the way for interest rate cuts, a positive signal for metals markets. On the supply side, copper inventories in Shanghai Futures Exchange (ShFE) warehouses fell by 3.0% from the previous Friday, continuing a trend of declining stocks that have decreased by 23% since June. This decline reflects a resurgence in Chinese physical buying as copper prices have retreated. Additionally, copper inventories on the London Metal Exchange (LME) remain elevated, with the LME cash copper contract trading at a significant discount to the three-month contract, indicating ample near-term supply. Production issues in Chile, particularly the sluggish output and potential strike at the Escondida mine, further supported copper prices. BHP, the operator, has sought mediation from the Chilean government after failing to reach an agreement with the union. However, the global refined copper market reported a 65,000 metric tons surplus in May, up from an 11,000 metric tons surplus in April, according to the International Copper Study Group (ICSG). China's unwrought copper imports decreased by 2.9% in July compared to a year earlier, reflecting subdued demand and high domestic stock levels, though copper concentrate imports rose by 9.6%. Technically, the copper market is undergoing short covering, with open interest dropping by 2.5% to settle at 13,910 contracts. Copper is currently supported at 772.7, with potential downside testing at 768.8 levels. On the upside, resistance is likely at 782.9, with a break above possibly pushing prices towards 789.2.
 

Trading Ideas:
* Copper trading range for the day is 768.8-789.2.
* Copper prices gains supported by rate cut hopes and better-than-expected U.S. data.
* Fed policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts ahead.
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 3.0% from last Friday


Zinc
Zinc prices surged by 2.51% to settle at 257.7, driven by expectations of rising energy costs, which constitute a significant portion of zinc production expenses, accounting for around 50% of the total. The market was further supported by a substantial decline in zinc inventories in warehouses monitored by the Shanghai Futures Exchange, which fell by 8.5% from the previous Friday. Additionally, inflation data indicating that China is stepping back from deflation helped improve sentiment across equities and commodities markets. On the global front, U.S. job growth slowed more than expected in July, with the unemployment rate increasing to 4.3%. This raised concerns about the labor market's health and the potential vulnerability of the U.S. economy to a recession. The weak jobs report, combined with sluggish manufacturing activity in China, initially triggered a global selloff in risk assets. However, the data also fueled expectations for deeper interest rate cuts by the U.S. Federal Reserve, which provided some support to the metals market. In China, refined zinc production in June reached 545,800 metric tons, up 1.81% month-on-month but down 1.2% year-on-year. The tight supply of zinc concentrate and ongoing consumption of refinery raw material inventories have kept the market balanced. Additionally, the halt of operations at MMG Ltd's Dugald River zinc mine in Australia for repair work is expected to exacerbate the already tight zinc concentrate market, potentially creating further shortages. Technically, the zinc market experienced fresh buying, with a 3.41% increase in open interest to settle at 2,212 contracts. Zinc is currently supported at 254.3, with a potential test of 250.8 levels on the downside. On the upside, resistance is likely at 260, and a move above this level could push prices towards 262.2.
 

Trading Ideas:
* Zinc trading range for the day is 250.8-262.2.
* Zinc gains as buying was triggered by expectations of higher energy costs
* Zinc inventories in warehouses monitored by the SHFE fell 8.5% from last Friday.
* U.S. jobs data eased fears of a growth slowdown in the United States


Aluminium
Aluminium prices increased by 0.54% to settle at 214.2, driven by ongoing efforts by the Chinese government to bolster the domestic economy, a gradual increase in global liquidity, and rising geopolitical tensions. In the U.S., stronger-than-expected jobs data alleviated concerns about a potential economic slowdown, with unemployment claims falling more than anticipated, indicating a more robust labor market. In terms of production, China's domestic aluminium output for July 2024 reached 3.683 million metric tons, marking a 3.22% year-on-year increase. This growth was supported by the resumption of full production in Yunnan Province, new capacity in Inner Mongolia, and the reactivation of previously idled capacity in Sichuan Province. On the global stage, primary aluminium output in June rose by 3.2% year-on-year to 5.94 million metric tons, while first-half 2024 production saw a 3.9% increase to 35.84 million metric tons, largely driven by higher production in China. China, the world's leading aluminium producer, reported a 7% year-on-year growth in first-half aluminium output to 21.55 million tons, with June production reaching its highest level in nearly a decade. The premium for aluminium shipments to Japanese buyers for the July-September period was set at $172 per metric ton, reflecting a 16%-19% increase from the previous quarter due to tighter supplies in Asia. Aluminium stocks at major Japanese ports stood at 317,860 metric tons at the end of June, up 3% from the previous month. Technically, the aluminium market is experiencing short covering, with open interest declining by 6.07% to settle at 4,042 contracts. Aluminium is currently supported at 213.1, with a potential test of 212.1 levels on the downside. Resistance is expected at 215.8, and a move above this level could push prices toward 217.5.
 

Trading Ideas:
* Aluminium trading range for the day is 212.1-217.5.
* Aluminium gains as the Chinese government continues to boost the domestic economy.
* U.S. jobs data eased fears of a growth slowdown in the United States.
* Domestic aluminium production in July 2024 was 3.683 million mt, up 3.22% YoY.


Cottoncandy
Cotton prices declined by 0.25% to settle at 56,300, pressured by concerns over reduced cotton demand in key markets like Bangladesh and China. The market sentiment was further dampened by reports of a significant decline in cotton acreage in major Indian states. Punjab, Haryana, and Rajasthan have collectively reported only 10.23 lakh hectares under cotton cultivation this year, a sharp drop from the 16 lakh hectares recorded last year. Specifically, Punjab saw a reduction to 97,000 hectares, down from the historical norm of up to 7.58 lakh hectares during the 1980s and 1990s. Similarly, Rajasthan's cotton area decreased from 8.35 lakh hectares last year to 4.75 lakh hectares this year, while Haryana saw a reduction from 5.75 lakh hectares to 4.50 lakh hectares in 2024. Despite these reductions, some support for cotton prices emerged due to delays in shipments from the U.S. and Brazil, which triggered increased demand for Indian cotton from neighboring mills. Additionally, firm cottonseed prices have helped maintain some price stability, even as the southern states of Karnataka, Telangana, and Andhra Pradesh have commenced sowing for the 2024 Kharif season following the onset of monsoon rains. On the global front, the 2024/25 U.S. cotton projections indicate higher beginning and ending stocks, with the season average upland farm price forecasted at 70 cents per pound, down 4 cents from the previous forecast. Global ending stocks for 2024/25 are projected to increase by 480,000 bales to 83.5 million. Technically, the cotton market is undergoing long liquidation, with open interest decreasing by 0.59% to settle at 168 contracts. Cotton prices are currently supported at 56,300, and a break below this level could lead to further declines. Resistance is likely at 56,300, with any upward move potentially testing the same level again.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56300-56300.
* Cotton dropped as concerns about cotton demand in Bangladesh and China dampened market sentiment.
* India's cotton exports in the first nine months of 2023-24 increased by 68% to 26 lakh bales
* CAI estimates closing stocks at 20 lakh bales at the end of 2023-24, down from 28.90 lakh bales in the previous year
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric prices saw a marginal decline of -0.02% to settle at 16,396, primarily influenced by news of increased sowing activities. However, the downside was limited as farmers continued to hold back their stocks, anticipating further price rises. With growers receiving fair prices for their produce, turmeric sowing is expected to expand across all major producing states this year. Reports indicate that turmeric sowing in the Erode region has doubled compared to last year, while in Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher than the previous year. Last year, turmeric was sown on approximately 3 to 3.25 lakh hectares across the country, but this year, the area under cultivation is expected to increase to 3.75 to 4 lakh hectares. Despite the expanded sowing, the production in 2024 was estimated at 45-50 lakh bags due to unfavorable weather conditions, coupled with an outstanding stock of 35-38 lakh bags. Even with increased sowing in the current season, the upcoming turmeric crop is expected to be around 70-75 lakh bags, with zero outstanding stock, potentially leading to a supply deficit in 2025. On the export front, turmeric exports during April-May 2024 dropped by 20.03% to 31,523.94 tonnes compared to the same period in 2023. However, imports surged by 417.74% to 14,637.55 tonnes in the same period. In the Nizamabad spot market, prices ended at 16,201.65 Rupees, reflecting a 0.28% gain. Technically, the turmeric market is under fresh selling pressure, with a 0.24% increase in open interest to 16,400 contracts. Support is currently at 16,314, with a further decline potentially testing 16,234. Resistance is expected at 16,470, with a move above this level possibly leading to a test of 16,546.
 

Trading Ideas:
* Turmeric trading range for the day is 16234-16546.
* Turmeric prices dropped amid news of increased sowing.
* Turmeric sowing on the Erode line is reported to be double as compared to last year.
* Turmeric was sown in about 3/3.25 lakh hectares in the country last year, which is estimated to increase to 3.75/4 lakh hectares this year.
* In Nizamabad, a major spot market, the price ended at 16201.65 Rupees gained by 0.28 percent.


Jeera
Jeera prices edged up by 0.33% to settle at 26,120, driven by strong domestic and export demand, coupled with tight global supplies. However, the upside was capped due to expectations of higher production this season, which could exert downward pressure on prices. Farmers are also holding back stocks in anticipation of better prices, further supporting the current price levels. This season, jeera production is anticipated to be 30% higher, with total output expected to reach 8.5-9 lakh tonnes due to a significant increase in cultivation areas. Gujarat saw a 104% rise in sowing area, while Rajasthan experienced a 16% increase. Globally, jeera production has also surged, with China leading the way, nearly doubling its output to 55-60 thousand tonnes. Increased production in countries like Syria, Turkey, and Afghanistan is also expected to weigh on prices as new supplies enter the market. Despite the potential for a price decline due to higher production, jeera exports have shown resilience. In April-May 2024, exports rose by 43.50% to 58,943.84 tonnes compared to the same period in 2023. However, May 2024 exports were down by 44.99% compared to April 2024, indicating some volatility in the export market. Technically, the market witnessed fresh buying, with a 1.14% increase in open interest to settle at 26,215 contracts. Jeera prices are currently supported at 25,880, with a potential test of 25,630 levels on the downside. On the upside, resistance is likely at 26,540, and a move above this level could push prices toward 26,950.
 

Trading Ideas:
* Jeera trading range for the day is 25630-26950.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 26285.45 Rupees dropped by -0.22 percent.

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