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Gold

Gold prices fell by 0.61% yesterday, settling at ?78,544, as reduced geopolitical tensions in the Middle East diminished safe-haven demand. Hamas released Israeli hostages, and Israel freed Palestinian prisoners, marking a ceasefire that temporarily paused a prolonged conflict. Investors are now focused on U.S. interest rate policies, with the Federal Reserve expected to hold rates steady on January 29 before potentially cutting in March, according to recent polls. Demand for gold remained mixed globally. While China's gold consumption remained robust ahead of the Lunar New Year, Indian gold discounts widened to six-month highs as high domestic prices deterred buyers. Dealers in India offered a discount of up to $30 per ounce over official prices, a significant jump from $17 last week. In contrast, Chinese dealers charged premiums of $3-$13 per ounce. Premiums and discounts varied across global markets, with Singapore, Hong Kong, and Japan reporting par levels to minor premiums. Gold-backed ETFs saw increased holdings, with SPDR Gold Trust rising by 1.19% to 879.12 tonnes. Central banks continued to drive demand, adding a collective 53 tonnes to their holdings in November. Notably, Poland added 21 tonnes, while the Reserve Bank of India increased reserves by 8 tonnes, maintaining its position as a major buyer in 2024. Technically, the market witnessed long liquidation as open interest dropped by 11.16% to 9,396 contracts. Support is now at ?78,260, with further declines testing ?77,975. Resistance is expected at ?78,990, and a move above this could see prices testing ?79,435.
 

Trading Ideas:
* Gold trading range for the day is 77975-79435.
* Gold prices fell as easing tensions in the Middle East tempered safe-haven demand.
* Gold stocks in COMEX-approved warehouses have jumped by a third in the past six weeks.
* COMEX gold speculators raised net long positions by 17,994 contracts to 212,494 in the week to Jan. 14, data showed.

Silver

Silver prices edged down by 0.17% yesterday, settling at ?91,442 as robust U.S. economic data showcased resilience, suggesting potential room for the Federal Reserve to ease borrowing costs. The IMF revised global growth projections for 2025 to 3.3%, driven by stronger U.S. forecasts, although risks linger for other major economies. For 2026, growth remains at 3.3%. Fed Governor Christopher Waller noted inflation is nearing the 2% target, fueling hopes of earlier rate cuts. However, concerns over persistent inflation were reiterated by Federal Reserve Bank of Cleveland President Beth Hammack. In the silver market, the global deficit is forecast to decline by 4% to 182 million ounces in 2024, as a 2% supply growth offsets a 1% demand increase, according to the Silver Institute. Industrial demand is projected to hit record highs, driven by growth in electronics, electric vehicles, and solar panels. Jewelry consumption is also expected to rebound, but physical investment is forecast to drop by 16%. Total demand is likely to reach 1.21 billion ounces in 2024. Mine supply is anticipated to grow by 1%, with increased production in Mexico, Chile, and the U.S., while recycling is set to rise by 5% due to higher western silverware scrap. Technically, the market saw fresh selling, with open interest rising by 1.05% to 21,005 contracts. Support is now at ?90,760, with further declines testing ?90,080. Resistance is at ?92,060, and a move above this could see prices testing ?92,680.
 

Trading Ideas:
* Silver trading range for the day is 90080-92680.
* Silver dropped as strong economic data highlighting the resilience of the US economy.
* The IMF projects global growth of 3.3% for 2025, a slight increase from the 3.2% forecast in October.
* Fed Governor Christopher Waller said three or four cuts could be possible if U.S. economic data weakens further.

Crude oil

Crude oil prices fell by 1.59%, settling at ?6,613, as speculation arose over potential policy shifts under the incoming U.S. administration. Reports suggest easing sanctions on Russian oil could be on the table if it facilitates a resolution to the Russia-Ukraine conflict. Easing tensions in the Middle East, marked by a ceasefire between Hamas and Israel, added downward pressure on prices. Meanwhile, U.S. crude inventories dropped for the eighth consecutive week, falling by 1.961 million barrels, exceeding expectations of 1.6 million barrels. However, gasoline and distillate inventories surged by 5.852 million and 3.077 million barrels, respectively, reflecting higher-than-expected builds. China's crude imports from Russia rose by 1% in 2024, reaching a record high, as refiners capitalized on discounted supplies, while imports from Saudi Arabia fell by 9%. The U.S. Energy Information Administration (EIA) reported that global oil production growth is expected to surpass demand in the coming years. U.S. crude output is projected to reach a record 13.55 million barrels per day in 2024, with the Permian Basin contributing over half of the total output by 2026. Global production in 2025 is forecast at 104.4 million barrels per day, with demand trailing at 104.1 million barrels per day. Technically, crude oil markets remain under fresh selling pressure, with open interest rising by 0.35% to 8,855 contracts. Prices face support at ?6,534, with a breach potentially testing ?6,456. Resistance is pegged at ?6,711, and a move above this level could lead to testing ?6,810.
 

Trading Ideas:
* Crudeoil trading range for the day is 6456-6810.
* Crude oil fell amid speculation over potential changes in U.S. sanctions on Russian oil under the incoming Trump administration.
* Traders will also look for further details on his trade tariffs on China and potential sanctions on Iran and Venezuela.
* Additionally, easing tensions in the Middle East weighed on prices, after Hamas and Israel exchanged hostages and prisoners.

Natural gas

Natural gas prices dropped by 3.68%, settling at ?332, as forecasts of warmer weather reduced demand for gas-intensive heating. This shift followed the Arctic blast earlier in January, prompting traders to lock in profits. The Trump administration's anticipated energy emergency declaration, aimed at boosting U.S. energy output and expediting LNG export licenses, is unlikely to yield immediate impacts due to potential court delays. On the supply front, U.S. natural gas output fell from 104.2 billion cubic feet per day (bcfd) in December to 103.4 bcfd in January, attributed to freeze-offs impacting oil and gas wells. Federal data revealed a significant storage withdrawal of 258 billion cubic feet for the week ending January 10, narrowing the storage surplus to 2.5% above the five-year average and pushing inventories 3.4% below last year’s levels. This marks the ninth consecutive weekly draw, with the South Central region recording the largest reduction at 93 bcf. Meanwhile, U.S. natural gas consumption is projected to rise to record highs in 2025, with demand forecasted at 90.6 bcfd and LNG exports expected to reach 14.1 bcfd. Technically, the market is witnessing long liquidation, with open interest dropping by 13.72% to 9,531 contracts. Prices are facing support at ?325, with a breach potentially testing ?318.1 levels. Resistance is seen at ?339.4, and a move above this could lead to testing ?346.9 levels, indicating potential volatility in the near term.
 

Trading Ideas:
* Naturalgas trading range for the day is 318.1-346.9.
* Natural gas sank amid an eased demand outlook as markets awaited regulation changes under the Trump presidential administration.
* Forecasts of warmer weather prevailed through later January following the Arctic blast before the weekend, allowing traders to take profits.
* Data showed a significant withdrawal of 258 billion cubic feet of gas from storage.


Copper

Copper prices slipped by 0.11%, settling at ?831.85, as China’s central bank maintained its key lending rates for the third consecutive month. This cautious approach overshadowed optimism from China’s economic growth, which met the 5% target for 2024 but showed imbalances, with industrial output and exports driving gains. Copper inventories in Shanghai Futures Exchange warehouses rose by 12.9% weekly, reflecting adequate supply. On the demand side, imports of unwrought copper and copper products in China surged 17.8% year-on-year in December, reaching a 13-month high of 559,000 metric tons. The increase signals robust demand amid restocking by refiners and higher orders. However, concerns about potential U.S. tariffs under the incoming Trump administration added uncertainty to global trade. Supply-side updates included a modest 1% increase in 2024 copper production by Antofagasta, reaching 664,000 metric tons but missing its guidance range of 670,000–710,000 tons. The global refined copper market showed a 41,000 metric tons deficit in October, narrower than the 136,000 metric tons deficit in September, with refined output at 2.30 million metric tons and consumption at 2.34 million metric tons. Technically, copper is under long liquidation as open interest dropped by 12.83% to 4,104 contracts. Support is seen at ?828.5, with a breach potentially testing ?825.2 levels. Resistance is positioned at ?834.8, and a move above this could push prices toward ?837.8.
 

Trading Ideas:
* Copper trading range for the day is 825.2-837.8.
* Copper settled flat after China’s central bank kept key lending rates unchanged.
* China's economy grew 5% last year, matching the government's target, but growth was unbalanced, led by industry and exports.
* China's refined copper production in December was up 4.3% from the previous year at 1.24 million metric tons.

Zinc

Zinc prices rose by 0.29%, settling at ?278.4, supported by declining inventories and supply disruptions. Stocks in LME-registered warehouses hit their lowest levels since February 2024, while Shanghai Futures Exchange zinc inventories fell by 1.4% from last Friday. Production disruptions in two major Australian mines added to the bullish sentiment. MMG Ltd.’s Dugald River mine temporarily halted operations due to a bushfire, although production is expected to resume within 48 hours without a significant impact on full-year output. On the demand front, China’s industrial output showed significant acceleration in December, supported by monetary stimulus measures. The global zinc market posted a deficit of 69,100 metric tons in October, up from 47,000 tons in September, as refined metal production fell by 1.7% amid tight raw material availability. Zinc mine output dropped 3.8% year-to-date in key producing regions like Canada, China, and South Africa, further squeezing supply. The International Lead and Zinc Study Group (ILZSG) revised its 2024 outlook from a surplus of 56,000 metric tons to a deficit of 164,000 tons, driven by reduced smelter output and weaker demand growth in China’s struggling property sector. Technically, zinc prices are under short covering as open interest dropped by 9.78% to 1,577 contracts. Key support is at ?276.8, with a breach potentially testing ?275.3. Resistance is now at ?279.5, and a breakout above this level could lead to testing ?280.7.
 

Trading Ideas:
* Zinc trading range for the day is 275.3-280.7.
* Zinc gains supported by continuing decline of LME inventories, lowest since February 2024
* Zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.4% from last Friday.
* BMI projects global refined zinc consumption grew by 2.2% year-on-year in 2024 and will grow by another 1.7% year-on-year in 2025.


Aluminium

Aluminium prices edged up 0.06%, settling at ?256.2, driven by supply concerns and geopolitical developments. The European Union is preparing to ban Russian primary aluminium imports in its 16th sanctions package, consolidating existing self-imposed restrictions by manufacturers since Russia's 2022 invasion of Ukraine. On the supply front, LME-registered aluminium inventories dropped 45% since May 2023 to 619,375 tons, with nearly 60% of cancelled warrants indicating further drawdowns in the coming weeks. This supply strain has narrowed the cash-to-three-month contract discount to $13 per ton from over $40 in December. Global aluminium production rose 3% year-on-year in December to 6.236 million metric tons, while China's output for December grew 4.2% to 3.77 million tons. However, average daily output declined by 1.7% compared to November due to high costs, with Chinese producers facing average losses of 687 yuan per ton. For 2024, China's annual production increased by 4.6% to 44.01 million tons, driven by new capacities in Xinjiang. Meanwhile, China's unwrought aluminium exports surged 17% in the first ten months of 2024 to 5.5 million tons. Technically, the market is experiencing short covering, with open interest declining by 5.77% to 2,236 contracts. Aluminium is finding support at ?255, with further downside potentially testing ?253.9. Resistance is currently at ?257.1, and a break above this level could lead to testing ?258.1.
 

Trading Ideas:
* Aluminium trading range for the day is 253.9-258.1.
* Aluminum rose supported by expectations of lower supply from key producers and respite for demand.
* The EU was set to sanction the import of primary aluminum from Russia in its upcoming package.
* China's aluminium production rose by 4.2% to 3.77 million metric tons in December from a year earlier.

Cottoncandy

Cottoncandy prices declined by 0.45%, settling at ?53,670 due to bearish sentiment from the WASDE report, which projected higher production and ending stocks for the 2024/25 crop year. Global cotton production is forecasted to rise by 1.2 million bales to 117.4 million, driven by larger crops in India and Argentina. However, North Indian states reported a sharp 43% decline in kapas arrivals until November 30, creating raw material shortages for ginners and spinners. The Cotton Association of India (CAI) estimates cotton consumption for 2024/25 at 313 lakh bales, with pressing estimates unchanged at 302.25 lakh bales. Cotton imports are expected to rise significantly to 25 lakh bales, up by 9.8 lakh bales from the previous year. By November 30, about 9 lakh bales had arrived at Indian ports. Closing stocks for 2024/25 are projected at 26.44 lakh bales, lower than last year’s 30.19 lakh bales. Globally, the December estimate for U.S. all-cotton production rose to 14.3 million bales, while world production increased to 117.4 million bales. World consumption is up by 570,000 bales, led by India, Pakistan, and Vietnam, offsetting a reduction in China. Meanwhile, exports are slightly higher, with notable increases in Brazil, Benin, and Cameroon. Technically, the market is witnessing long liquidation as open interest dropped by 19.29% to 297. Prices are supported at ?53,490, with a potential downside to ?53,300. Resistance is seen at ?53,940, and a break above this level could test ?54,200.
 

Trading Ideas:
* Cottoncandy trading range for the day is 53300-54200.
* Cotton dropped as WASDE report projected higher production and ending stocks for the 2024/25 crop year.
* India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago
* Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA
* In Rajkot, a major spot market, the price ended at 25733.8 Rupees dropped by -0.24 percent.

Turmeric

Turmeric prices settled marginally higher by 0.04% at ?14,030 amid persistent concerns over slow rhizome growth and lower yield estimates. However, gains were capped as harvesting commenced in Karnataka and Andhra Pradesh and is set to start in Telangana. Farmers indicate that yields may fall below expectations, necessitating close monitoring as the harvest progresses. Increased crop arrivals post-Makar Sankranti are expected to influence market trends, with a potential rise in supply. Current supply has dwindled significantly along the Erode-Warangal line, and pending deliveries in the futures market further limit availability. New turmeric arrivals are anticipated only by April, with weather conditions being unfavorable due to the El Niño effect affecting both North and South India. Domestic consumption remains robust, while international demand has driven turmeric prices higher. Last year, production stood at around 68–70 lakh bags, significantly below domestic consumption of 128 lakh bags, leaving old stock nearly exhausted before the new crop arrives. Turmeric exports saw a robust increase of 6.57% from April to October 2024, totaling 108,879.96 tonnes compared to 102,162.90 tonnes in the same period of 2023. October 2024 exports surged by 57.22% year-on-year, reflecting steady demand in global markets. Technically, the turmeric market witnessed fresh buying, with open interest rising by 0.04% to 11,320 contracts as prices gained ?6. Immediate support is seen at ?13,934, with a fall below targeting ?13,836. Resistance is pegged at ?14,106, and a break above could lead to ?14,180.
 

Trading Ideas:
* Turmeric trading range for the day is 13836-14180.
* Turmeric settled flat amid concerns over slow growth of rhizomes and low yield estimates persist.
* Harvesting has commenced in Karnataka and Andhra Pradesh and is expected to commence in Telangana.
* With the arrival of new crop likely to increase after Makar Sankranti, supply is expected to increase.
* In Nizamabad, a major spot market, the price ended at 13942.7 Rupees gained by 0.85 percent.

Jeera

Jeera prices gained 0.29% yesterday, closing at ?22,290, supported by low-level buying and concerns over stock shortages. While demand remains relatively low, the existing export business is being met by available stocks. Farmers are left with approximately 20 lakh bags of cumin, of which only 3-4 lakh bags are expected to be traded by season's end, leaving about 16 lakh bags for carry-forward. Despite these shortages, the upside is somewhat capped due to subdued demand at present. India’s cumin production in the 2023-24 season rose sharply to 8.6 lakh tonnes from 11.87 lakh hectares, compared to 5.77 lakh tonnes from 9.37 lakh hectares the previous year. This increase in production, alongside favorable crop conditions, is expected to maintain similar production levels as last year. With Indian cumin being the most affordable globally, the country is attracting significant export demand, particularly from China and Europe, further supporting prices. Exports have been strong, with jeera shipments during April-October 2024 rising by 77.37%, totaling 135,450.64 tonnes. In October alone, exports surged by 161.04% year-on-year, further boosting market sentiment. Technically, the market is under short covering, with open interest declining by 0.52% to 2,280 contracts while prices gained ?65. Immediate support is at ?22,110, with a potential test of ?21,930 below. Resistance is at ?22,400, and a move above this could lead to a test of ?22,510.
 

Trading Ideas:
* Jeera trading range for the day is 21930-22510.
* Jeera gains on low level buying amid shortage of stocks is contributing.
* However upside seen limited as demand is low and the current export business is being met from the available stock.
* The current season is expected to have similar production levels as last year due to better crop conditions and good sowing.
* In Unjha, a major spot market, the price ended at 23185.8 Rupees dropped by -0.47 percent.

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