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Gold

Gold faced a decline of -0.87%, settling at 62015, as it grappled with a stronger dollar and rising Treasury yields. The market's focus was on upcoming remarks from Federal Reserve officials, with investors eager to gain insights into the central bank's monetary policy direction. This uncertainty, combined with comments from European Central Bank (ECB) officials dismissing the likelihood of early rate cuts, added to the pressure on gold prices. Joachim Nagel and Robert Holzmann from the ECB emphasized that it was premature to discuss rate cuts, tempering expectations of a shift in borrowing costs this year. This stance, coupled with a cloud of uncertainty regarding the timing of potential moves, influenced market sentiment. The U.S. central bank is widely anticipated to maintain its policy rate during its upcoming meeting, but traders are pricing in a 73% probability of an interest rate cut in March, according to the CME Fedwatch tool. In contrast, ECB officials pushed back against expectations of rapid rate cuts in the Eurozone this year. Physically, gold demand in key Asian markets strengthened, driven by the approaching Chinese New Year, particularly in China and Singapore. From a technical standpoint, the gold market is undergoing long liquidation, marked by an -8.13% drop in open interest to settle at 8251, accompanied by a price decline of -544 rupees. Gold is currently finding support at 61820, and a potential break below could test 61625 levels. On the upside, resistance is expected at 62365, with a move above potentially leading to prices testing 62715.
Trading Ideas:
* Gold trading range for the day is 61625-62715.
* Gold prices declined hurt by a strengthening dollar and Treasury yields
* Investors tempered their expectations for a March rate cut from the Federal Reserve
* Comments from ECB officials downplaying the idea of early rate cuts overshadowed the outlook for borrowing costs globally.

Silver

Silver faced a decline of -0.74%, settling at 72093, as the precious metal's safe-haven appeal waned amid a stronger dollar and rising Treasury yields. The market sentiment shifted as investors reassessed the potential timeline for interest rate reductions by the Federal Reserve (Fed). This reevaluation was triggered by the release of a robust Consumer Price Index (CPI) report for December and hawkish comments from European Central Bank (ECB) officials. The dollar reached one-month highs as rate cut expectations were tempered. Joachim Nagel of the ECB emphasized that inflation remains elevated, and it's premature to discuss cutting interest rates. ECB Governing Council member Robert Holzmann also warned that rate cuts may not be on the horizon for the year. These statements recalibrated broader market expectations, impacting silver's performance. Investors are awaiting cues about potential Fed rate cuts following the release of the monthly US Retail Sales and Industrial Producer data. The outcome of these reports, expected on Wednesday, will likely shape market expectations. Retail Sales are anticipated to show higher growth at 0.4%, compared to a 0.3% increase in November. Consumer spending, excluding automobiles, is projected to maintain a steady pace of 0.2%. From a technical standpoint, the silver market is undergoing fresh selling pressure, with a notable increase in open interest by 6.07% to settle at 23762. The price decline of -534 rupees signals a bearish sentiment. Silver is currently finding support at 71855, and a potential breach could lead to a test of 71620 levels. On the upside, resistance is expected at 72480, with a move above potentially leading to prices testing 72870.
Trading Ideas:
* Silver trading range for the day is 71620-72870.
* Silver declined as a stronger dollar and an uptick in Treasury yields weighed.
* Price has been hit hard amid uncertainty over US Retail Sales and Industrial Production data.
* A strong US Retail Sales data would provide more room for the Fed to maintain higher interest rates.

Crude oil

Crude oil experienced a marginal decline of -0.08%, settling at 6003, as profit-taking ensued amid limited disruptions in crude output due to the Middle East conflict. While tensions in the region led to more oil tankers avoiding the southern Red Sea, the impact on crude supply remained minimal, prompting investors to take profits. The Middle East conflict's limited impact on crude output contrasts with disruptions in Libya, where protesters threatened to shut down additional oil and gas facilities after closing the Sharara field last week. The closure of the Sharara field removed 300,000 barrels per day from the market. Despite these regional challenges, the overall market sentiment suggests that global oil supply remains relatively stable. China's crude oil imports in 2023 reached an all-time high, reflecting a recovery in fuel demand from the pandemic-induced slump. Money managers demonstrated confidence in the oil market by raising their net long U.S. crude futures and options positions in the week to January 9, according to the U.S. Commodity Futures Trading Commission (CFTC). The speculator group increased its combined futures and options position in New York and London by 16,141 contracts to 67,357 during the period, signaling positive sentiment among investors. From a technical perspective, the crude oil market is undergoing long liquidation, marked by a notable drop in open interest by -42.58% to settle at 4719. Despite the decrease in open interest, the price decline of -5 rupees suggests a relatively modest bearish sentiment. Crude oil is currently finding support at 5945, and a potential break below could lead to a test of 5887 levels. On the upside, resistance is anticipated at 6085, with a move above potentially pushing prices to test 6167.
Trading Ideas:
* Crudeoil trading range for the day is 5887-6167.
* Crude oil dropped as the Middle East conflict's limited impact on crude output prompted profit taking.
* Despite tensions in the Middle East, investors do not see any impact on oil supply.
* Protesters in Libya threatened to shut down more oil and gas facilities, following the closure of the Sharara field.

Natural gas

Natural gas experienced a significant decline of -4.47%, settling at 243.7, driven by forecasts indicating a drop in demand and an increase in output as warmer-than-normal weather is expected in late January. Despite extreme cold weather boosting spot power and gas prices to multi-year highs, the anticipation of milder conditions in the coming weeks influenced the futures market, leading to the notable price drop. The recent cold spell led to a surge in daily gas demand, potentially reaching a record high on Tuesday. However, the average gas output in the Lower 48 states declined to 104.8 billion cubic feet per day (bcfd) so far in January, down from the monthly record of 108.5 bcfd in December. While output was on track to drop to a preliminary 11-month low of 97.1 bcfd on Monday, the reduction was comparatively modest compared to previous severe weather events in December 2022 and February 2021. Meteorological projections indicate a shift in weather patterns, with the Lower 48 states transitioning from colder-than-normal conditions from January 15-21 to warmer-than-normal conditions from January 22-30. From a technical perspective, the natural gas market is undergoing fresh selling pressure, evidenced by a gain in open interest by 0.07% to settle at 15108. The price decline of -11.4 rupees indicates a bearish sentiment. Natural gas is currently finding support at 238, and a potential break below could lead to a test of 232.3 levels. On the upside, resistance is likely at 253.4, with a move above potentially pushing prices to test 263.1.
Trading Ideas:
* Naturalgas trading range for the day is 232.3-263.1.
* Natural gas dropped due to forecasts of decreased demand and increased output.
* Gas output in the Lower 48 states decreased in January compared to December, with a daily output on track to reach an 11-month low.
* Output loss was smaller compared to previous winter storms in December 2022 and February 2021.

Copper

Copper settled marginally higher by 0.01% at 715.5 as supply concerns continued to linger, countering the strength in the dollar and uncertainties in demand. Global copper production faced constraints with the suspension of operations at First Quantum's Cobre mine in Panama, one of the world's largest open-pit mines. Similar challenges were noted elsewhere, as Anglo American adjusted its copper output target for the year, reducing it by nearly 25% due to escalating operational costs. Chinese Premier Li Qiang provided insights into the country's economic landscape, stating that China's economy had rebounded and grew around 5.2% in 2023, surpassing the official target of approximately 5%. Li expressed confidence that the Chinese economy could navigate fluctuations in performance, emphasizing the enduring trend of long-term growth. Despite this positive outlook, concerns about lower demand amid China's economic slowdown tempered the metal's price increase. Copper stocks at major Chinese warehouses surged by almost 40% since the beginning of the year, reflecting hesitance among manufacturers to place substantial bids. From a technical standpoint, the copper market is undergoing short-covering, evidenced by a drop in open interest by -9.83% to settle at 5329. Despite the decline in open interest, prices managed a slight uptick of 0.1 rupees. Copper is currently finding support at 713.4, and a potential break below could test 711.1 levels. On the upside, resistance is likely at 717.7, with a move above potentially pushing prices to test 719.7.
Trading Ideas:
* Copper trading range for the day is 711.1-719.7.
* Copper steadied as lingering supply concerns offset strength in the dollar and uncertain demand.
* Global copper output remained under pressure following the halt in production from First Quantum’s Cobre mine in Panama
* Copper stocks at major Chinese warehouses have risen by nearly 40% since the start of the year

Zinc

Zinc closed lower by -0.35% at 224.8, facing headwinds from a stronger dollar and concerns about demand in China, the top consumer of the metal. The dollar gained ground following hawkish remarks from central bankers, which tempered expectations for interest rate cuts. Market participants awaited key statements from influential figures like Christopher Waller of the U.S. Federal Reserve. China's central bank chose to keep the medium-term policy rate unchanged, contrary to market expectations for a cut. The decision was influenced by a weaker currency, limiting the immediate potential for monetary easing to stimulate the economy. These developments contributed to a cautious atmosphere in the zinc market. The International Lead and Zinc Study Group (ILZSG) reported that the global zinc market shifted to a deficit of 71,600 metric tons in November 2023, compared to a deficit of 62,500 tons in October. However, data for the first 11 months of 2023 indicated an overall surplus of 211,000 tons, in contrast to a deficit of 86,000 tons during the same period in 2022. Nyrstar, wholly owned by Trafigura, announced the suspension of its Budel zinc smelting operations in the Netherlands later this month. The decision is attributed to high energy costs and challenging market conditions. Technically, the zinc market is witnessing long liquidation, marked by a drop in open interest by -7.6% to settle at 2637. Despite the decrease in open interest, prices declined by -0.8 rupees. Zinc is currently finding support at 223.9, with a potential break below possibly testing 223 levels. On the upside, resistance is likely at 225.8, and a move above could see prices testing 226.8.
Trading Ideas:
* Zinc trading range for the day is 223-226.8.
* Zinc dropped weighed down by a stronger dollar and concerns about China’s demand
* The global zinc market deficit increased to 71,600 metric tons in November 2023 from a deficit of 62,500 tons in October.
* China's central bank left the medium-term policy rate unchanged, defying market expectations for a cut

Aluminium

Aluminium recorded a gain of 0.52%, settling at 201.1, driven by a decrease in stocks in LME-registered warehouses from a seven-month high. The market also responded to Chinese Premier Li Qiang's announcement that the Chinese economy rebounded, estimating a growth rate of around 5.2% in 2023, surpassing the official target of 5%. Li emphasized China's ability to navigate economic fluctuations and highlighted the enduring trend of long-term growth. Chinese export data for December 2023 showed that exports of unwrought aluminium and aluminium products reached approximately 490,000 tons, remaining flat compared to the previous month and increasing by 4% compared to December 2022. However, the full-year export figure for 2023 stood at around 5.68 million tons, reflecting a decline of 13.9% year-on-year. Domestically, China's aluminium production in December 2023 was approximately 3.6 million tons, marking a 2.1% increase from the previous month and a 3.5% growth compared to the same month in the previous year. The anticipated production for 2023 is 41.5 million tons, indicating a year-on-year growth of 3.6%. Production cuts in Yunnan province during November, influenced by a dry season from November to May, contributed to a decrease in aluminium output during that period. Technically, the aluminium market is witnessing short covering, with a drop in open interest by -10.74% to settle at 4112, alongside a price increase of 1.05 rupees. Currently, aluminium is finding support at 200, and a potential break below could test 198.9 levels. On the upside, resistance is likely at 201.7, and a move above could see prices testing 202.3.
Trading Ideas:
* Aluminium trading range for the day is 198.9-202.3.
* Aluminium recovers as LME stocks had fallen from a seven-month high.
* Chinese premier Li: China economy growth estimated at 5.2% in 2023
* China’s unwrought aluminum and aluminum products exports keep flat in Dec m-o-m

Cotton

Cotton Candy prices experienced a decline of -0.54%, settling at 55,300, driven by factors influencing global supply and consumption dynamics. The world consumption forecast for 2023/24 decreased by 1.3 million bales compared to the previous month, primarily due to reductions in India, Indonesia, Pakistan, Uzbekistan, and Turkey. The 2.0 million bales increase in ending stocks for 2023/24 is attributed to higher beginning stocks and production coupled with lower consumption. Uzbekistan's reduced consumption in 2022/23 contributes to the higher beginning stocks for 2023/24. Global production witnessed a rise of 260,000 bales, with increased cotton crops in China and Argentina, but a decrease in U.S. production. Despite this, world trade remained relatively stable, as an increase in China's projected imports was offset by reductions in Indonesia, Pakistan, and several smaller countries. The Cotton Association of India (CAI) maintained its estimates for domestic consumption of the fiber crop at 311 lakh bales for the 2023-24 season. The pressing estimates for the same period were retained at 294.10 lakh bales. CAI's observations are based on inputs from members in 11 cotton-growing state associations and other trade sources. The total cotton supply until the end of the cotton season 2023-24 is projected at 345 lakh bales. Brazil witnessed a historic high in cotton production during the 2022-23 season due to expanded cultivation and productivity. In the major spot market of Rajkot, prices ended at 26,454.3 Rupees, reflecting a decrease of -0.2%. From a technical standpoint, the market is currently undergoing long liquidation, marked by a 1.92% drop in open interest to settle at 204, with prices down by -300 rupees. Cotton Candy is finding support at 55,160, and a break below this level could test 55,020. Resistance is likely at 55,420, with a move above potentially leading to prices testing 55,540.
Trading Ideas:
* Cottoncandy trading range for the day is 55020-55540.
* Cotton dropped as world consumption in 2023/24 is forecast 1.3 million bales lower than last month.
* World 2023/24 ending stocks are forecast 2.0 million bales higher this month driven by higher beginning stocks.
* World production is 260,000 bales higher with China’s crop up 500,000 bales and Argentina’s production higher as well
* In Rajkot, a major spot market, the price ended at 26454.3 Rupees dropped by -0.2 percent.

Turmeric

Turmeric prices rose by 1.92%, settling at 13,896, driven by weaker production prospects, tighter stocks, and improved export opportunities. The market witnessed slower buying activities in anticipation of stock releases ahead of the new crops set to commence in January 2024. Despite pressure from improved crop conditions due to favorable weather, the overall crop condition is satisfactory, with harvest expected between January and March. The Turmeric Board in Telangana, initiated by Prime Minister Modi, has raised concerns among farmers in Maharashtra over the headquarters' location. However, with current levels of buying activity and decreasing supplies, the market is expected to maintain price stability. The demand for turmeric has seen an increase in both developed and emerging nations, leading to a 25% growth in exports. Expectations of a 20–25% decline in turmeric seeding this year, particularly in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, are attributed to shifting priorities among farmers. Turmeric exports during April-October 2023 registered a 2.63% increase at 102,162.94 tonnes compared to the same period in 2022. In October 2023, turmeric exports reached 10,137.78 tonnes, showing a gain of 11.58% compared to September 2023. However, there was a 9.30% drop in exports in October 2023 compared to the same month in 2022. Meteorological conditions, as defined by the IMD's average or normal rainfall, play a crucial role in shaping the turmeric market. The price in the major spot market of Nizamabad ended at 12,887.6 Rupees, reflecting a decrease of -0.25%. From a technical standpoint, the market is experiencing fresh buying, with a 0.48% gain in open interest to settle at 12,460. Prices are up by 262 rupees. Turmeric is finding support at 13,670, and a break below this level could test 13,446. Resistance is now likely at 14,048, with a move above potentially leading to prices testing 14,202.
Trading Ideas:
* Turmeric trading range for the day is 13446-14202.
* Turmeric gains due to the potential for yield losses caused by the crop's unfavourable weather.
* Support is also evident for improved export opportunities.
* However, upside seen limited as buying activities has been slower ahead of commencement of new crops.
* In Nizamabad, a major spot market, the price ended at 12887.6 Rupees dropped by -0.25 percent.

Jeera

Jeera prices surged by 3.71%, settling at 27,985, driven by low-level buying after recent drops attributed to higher production prospects in Gujarat and Rajasthan. The current rabi season has witnessed jeera acreage hitting a four-year high, notably in key producing states like Gujarat and Rajasthan. Farmers, inspired by record prices in the previous marketing season, significantly increased cultivation areas. In Gujarat, jeera cultivation expanded to cover 5.60 lakh hectares, marking a substantial 160% increase from the previous year. Similarly, Rajasthan saw a 25% increase in jeera cultivation, reaching 6.90 lakh hectares. However, the surge in Indian jeera production is met with challenges such as lower water availability, fewer cold days, and concerns about potential attacks from fusarium wilt and other pests. Additionally, the global demand for Indian jeera has slumped as buyers prefer other destinations like Syria and Turkey due to higher prices in India. The country anticipates a potentially bumper crop, but other major jeera-producing nations like China, Egypt, and Syria also expect higher yields, impacting the global market. Jeera exports during April-October 2023 dropped by 34.02%, standing at 76,367.90 tonnes compared to the same period in 2022. In October 2023, around 6,228.01 tonnes of jeera were exported, showing a drop of 13.39% compared to September 2023 and a significant 46.77% drop compared to October 2022. In the major spot market of Unjha, the price ended at 30,807.9 Rupees, reflecting a gain of 0.34%. From a technical standpoint, the market is currently experiencing fresh buying, with a 1.64% gain in open interest, settling at 1,863. Prices are up by 1,000 rupees. Jeera is finding support at 27,130, and a break below this level could test 26,260. Resistance is now likely at 28,540, with a move above potentially leading to prices testing 29,080.
Trading Ideas:
* Jeera trading range for the day is 26260-29080.
* Jeera gains on low level buying after prices dropped due to higher production prospects
* In Gujarat, Cumin sowing witnessed very strong growth by nearly 103% with 530,030.00 hectares against sown area of 2022
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 30807.9 Rupees gained by 0.34 percent.

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