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Gold

Gold settled up by 0.34% at Rs.74,295, supported by expectations of further interest rate cuts and rising geopolitical tensions. The Federal Reserve announced its first rate cut in four years, reducing it by 50 basis points, with projections for an additional half-percentage point reduction by year-end. This dovish outlook, along with the Fed’s long-term projection of continued rate cuts through 2026, bolstered gold’s appeal as a safe-haven asset. Heightened tensions in the Middle East further strengthened the precious metal’s attractiveness. Despite global uncertainties, gold demand in India slightly improved, though it remained far below normal levels as domestic prices approached record highs. Indian dealers offered a discount of up to $17 per ounce, down from $22 last week, while Chinese dealers widened their discounts to $12-$14 due to continued weak demand. In contrast, Swiss gold exports to India rose by 38% in August after the country reduced its gold import tax to an 11-year low in July. Meanwhile, China refrained from importing gold from Switzerland for the first time since January 2021, contributing to a drop in Swiss gold exports to their lowest level since June. The World Gold Council (WGC) noted a 5% drop in Indian gold demand in Q2 2024, but anticipated a recovery in the second half due to lower import taxes and favorable monsoon conditions. Technically, the market is under short covering, with open interest dropping by 17.72% to settle at 10,356, while prices rose by Rs.255. Gold has support at Rs.74,045, with a test of Rs.73,800 possible below this level, while resistance is expected at Rs.74,475, with potential to test Rs.74,660.
 

Trading Ideas:
* Gold trading range for the day is 73800-74660.
* Gold gains amid expectations of further interest rate cuts and rising geopolitical tensions
* Fed policymakers projected the interest rate would fall by another half of a percentage point by the end of this year.
* China refrained from gold imports from Switzerland in August, for the first time since January 2021
 

Silver
Silver prices fell by 1% to settle at Rs.89,231, driven by a stronger dollar, prompting some investors to take profits. The US Federal Reserve recently kicked off its easing campaign with a 50-basis-point rate cut in September and hinted at two more quarter-point cuts by the end of the year. This raised hopes of a soft landing for the US economy as inflation returns to target levels, while increasing the likelihood of policy easing in other major economies. However, Fed Chair Jerome Powell emphasized that the central bank is not in a rush to further ease policy, noting that half-percentage-point cuts are not the "new pace." This cautious stance, along with concerns that other major central banks might ease less aggressively than the Fed, supported the dollar. Meanwhile, China unexpectedly kept its key lending rates unchanged, despite room for policy easing following the Fed's aggressive cuts. Markets still expect more stimulus from Chinese policymakers after disappointing economic data for August. In the Euro Area, consumer confidence improved, rising to -12.9 in September, the highest since February 2022, following the European Central Bank's rate cuts. India's silver imports are expected to nearly double in 2024 due to strong demand from solar panel manufacturers, electronics makers, and investors betting on silver outperforming gold. In the first half of 2024, India imported 4,554 tons of silver, up sharply from 560 tons a year ago, as buyers stockpile in anticipation of rising prices. Technically, silver is under long liquidation, with open interest dropping by -0.33% to 25,004 contracts. Prices have strong support at Rs.88,300, and if breached, could test Rs.87,375. Resistance is seen at Rs.90,190, with potential to test Rs.91,155.
 

Trading Ideas:
* Silver trading range for the day is 87375-91155.
* Silver dropped as a stronger dollar prompted some investors to book profits.
* The US central bank kicked off its easing campaign with a large 50 basis point rate cut in September and signaled further rate reductions.
* China unexpectedly kept key lending rates unchanged this week even as the Fed’s aggressive rate cut provided room to ease policy.


Crudeoil
Crude oil prices settled down by 1.29% at Rs.5,898, pressured by concerns over weak demand after data revealed a sharp contraction in Eurozone business activity and continued economic challenges in China. Despite initial price support from escalating tensions between Israel and Hezbollah, which led international airlines to suspend flights to the Middle East, concerns about weaker global demand weighed on the market. China's refinery output has slowed, and industrial demand remains weak, further dampening market sentiment. Adding to these concerns, the International Energy Agency (IEA) reduced its 2024 oil demand growth forecast by 70,000 barrels per day (bpd) to 900,000 bpd, attributing this slowdown primarily to weaker Chinese demand and the growing adoption of electric vehicles. In contrast, U.S. refinery maintenance is expected to be at its lowest level in three years, which could boost oil demand in the coming months. On the supply side, the Bureau of Safety and Environmental Enforcement (BSEE) reported that 12% of U.S. Gulf of Mexico crude production remains offline, down from 40% at the height of Hurricane Francine. Meanwhile, U.S. crude oil inventories fell by 1.63 million barrels, more than expected, while Cushing's stockpiles dropped by 1.979 million barrels. Technically, the market is under fresh selling pressure, with open interest rising by 8.97% to settle at 14,128, as prices fell by Rs.77. Crude oil has support at Rs.5,812, and a break below this level could test Rs.5,726. Resistance is seen at Rs.6,002, and a move above this could push prices toward Rs.6,106.
 

Trading Ideas:
* Crudeoil trading range for the day is 5726-6106.
* Crude oil dropped amid concerns about the outlook for demand
* US refineries are planning their lightest maintenance in three years, likely boosting oil demand in the coming months.
* A slowdown in Chinese demand as the main driver of weaker global demand growth.


Naturalgas
Natural gas prices surged by 6.81% to settle at Rs.216.5, driven by forecasts for warmer-than-normal weather, which could increase cooling demand and boost gas consumption by power generators. This significant price rise came despite a federal report showing a slightly higher-than-expected storage build of 58 billion cubic feet (Bcf) last week, pushing total stockpiles to 3,445 Bcf, 194 Bcf higher than last year and 274 Bcf above the five-year average. In terms of supply and demand dynamics, LSEG forecast gas demand in the Lower 48 U.S. states, including exports, to average 99.6 billion cubic feet per day (bcfd) this week and slightly decrease to 98.7 bcfd next week. Supply is expected to remain steady at around 101.8-101.9 bcfd during the same period. U.S. gas production has averaged 102 bcfd in September, down from 103.2 bcfd in August, signaling a slight output decline. Further contributing to market sentiment, the U.S. Energy Information Administration (EIA) projected that U.S. gas production will decrease slightly in 2024, while demand is expected to reach a record high. Despite the current surge in consumption, production is forecast to ease from 103.8 bcfd in 2023 to 103.4 bcfd in 2024 before recovering in 2025. Technically, the natural gas market is under short covering, with open interest dropping by 23.71% to settle at 15,158, while prices jumped by Rs.13.8. Natural gas has support at Rs.208.5, with a potential test of Rs.200.6 if it drops below. Resistance is expected at Rs.221.1, and a move above this could push prices to Rs.225.8.
 

Trading Ideas:
* Naturalgas trading range for the day is 200.6-225.8.
* Natural gas gains on warmer-than-normal weather forecasts that could boost cooling demand.
* That price increase came despite a slightly higher-than-expected weekly storage build.
* Average gas demand in the Lower 48, at 99.6 bcfd to 98.7 bcfd next week.



Copper
Copper prices fell by -0.21% to settle at Rs.820.8 amid concerns about demand following a sharp contraction in Eurozone business activity. The U.S. Federal Reserve initiated its monetary policy easing cycle with a significant half-percentage-point rate cut, which raised expectations for more policy adjustments. However, global demand concerns continue to weigh on copper prices. In terms of supply, copper inventories in warehouses monitored by the Shanghai Futures Exchange dropped 11.1% from last week, signaling a tightening market in China. Despite this, China's refined copper exports for August stood at 30,814 tons, down 56% from July but still 50% higher than the same period last year. August copper production in China increased by 0.9% year-over-year to 1.12 million tons, reflecting consistent domestic output. Global copper markets remained in surplus, with a 95,000 metric tons excess in June, up from 63,000 metric tons in May, as reported by the International Copper Study Group (ICSG). Chile's state miner Codelco saw a 10.7% year-on-year drop in production in July, contributing to concerns about future supply constraints. In terms of demand, China's unwrought copper imports dropped to a 16-month low in August, with imports of 415,000 tons, down 12.3% year-on-year, due to weakened demand. Technically, the copper market saw fresh selling with open interest rising by 28.99% to 7,506 contracts. Prices are currently finding support at Rs.813.8, and a break below could lead to a test of Rs.806.7. On the upside, resistance is seen at Rs.827.8, and a move above this level could push prices toward Rs.834.7.
 

Trading Ideas:
* Copper trading range for the day is 806.7-834.7.
* Copper dropped amid concerns about demand after a sharp contraction in Eurozone business activity
* China exported 30,814 tons of refined copper in August, down 56% from the prior month.
* China's refined copper production in August rose 0.9% from the prior year to 1.12 million metric tons


Zinc
Zinc prices settled up by 0.3% at Rs.266.4, driven by optimism surrounding potential stimulus measures from China and a recent U.S. interest rate cut. Despite rising inventories, the outlook remains cautiously positive. Shanghai Futures Exchange warehouses reported a 4.8% rise in zinc ingot stocks, with total inventories at 114,500 metric tons. The Shanghai region saw an increase due to arrivals of imported zinc and need-based restocking post-holiday. However, weak downstream demand led to significant inventory build-up in the Guangdong region. Refined zinc imports in China increased by 44.24% month-on-month in August, reaching 26,500 metric tons, though they were down 9.01% year-on-year. Cumulative imports for the year reached 267,000 metric tons, marking a 30.72% increase year-on-year. On the supply side, Swedish miner Boliden's delay in expanding its Odda zinc smelter in Norway until 2025 may tighten global supply in the future. The global zinc market surplus also shrank to 14,000 metric tons in July, down from 36,400 tons in June, reflecting improving market balance. On the production front, China’s refined zinc output declined by 0.68% month-on-month in August, affected by power rationing, heavy rains in Sichuan, and raw material procurement issues. Smelters in several provinces resumed operations after maintenance, mitigating some of the output reduction. Technically, the market is witnessing fresh buying, with open interest increasing by 8.72% to 1,932 contracts. Zinc prices are receiving support at Rs.264, with a potential test of Rs.261.6 if they decline. On the upside, resistance is seen at Rs.267.9, and a move above this level could push prices toward Rs.269.4.
 

Trading Ideas:
* Zinc trading range for the day is 261.6-269.4.
* Zinc gains on optimism about further stimulus from China
* Refined zinc imports in August 2024 were 26,500 mt, up 8,200 mt or 44.24% MoM
* China unexpectedly leaving benchmark lending rates unchanged at the monthly fixing.


Aluminium
Aluminium prices edged up by 0.09% to settle at Rs.229.8, supported by improving demand prospects in China. However, gains were limited due to the strengthening U.S. dollar. Global primary aluminium production in August increased by 1.2% year-on-year, reaching 6.179 million tons, according to data from the International Aluminium Institute (IAI). Of this, Chinese production was estimated at 3.69 million tons. Although China’s alumina exports fell by 1.9% from a year earlier, 94.6% of the total flowed into Russia, indicating strong demand from that region. In addition, China maintained its benchmark lending rates in August, despite expectations for a broader policy easing package, which could eventually support demand. According to the World Bureau of Metal Statistics (WBMS), global aluminium production exceeded consumption by 127,900 tons in July, contributing to a year-to-date surplus of approximately 930,000 tons. This surplus reflects continued strong production, particularly in China, where aluminium output rose to its highest monthly level since 2002, driven by higher prices and steady profitability. For the first eight months of 2024, China produced 28.91 million tons of aluminium, up 5.1% year-on-year. Meanwhile, aluminium stocks at three major Japanese ports increased by 9.2% to 327,300 tons by the end of August, reflecting a potential build-up in inventories. Technically, the market saw fresh buying as open interest surged by 24.62% to 3,234 contracts. Aluminium prices are supported at Rs.228.2, and a breach below could test Rs.226.4. On the upside, resistance is likely at Rs.231.3, and if prices break this level, they could move toward Rs.232.6.
 

Trading Ideas:
* Aluminium trading range for the day is 226.4-232.6.
* Aluminium gains helped by signs of better demand in China
* China exported 143,268 tons of alumina last month, down 1.9% from a year earlier.
* China's Aug aluminium imports up 1.9% y/y.


Cottoncandy
Cottoncandy prices rose by 1.71% to settle at Rs.58,740, driven by concerns over reduced production forecasts and lower ending stocks for the 2024-25 season. The USDA lowered India's cotton production forecast to 30.72 million bales, attributing the reduction to crop damage from excessive rains and pest issues. Acreage under cotton has also decreased by around 9% in the current kharif season, compared to the same period last year. However, the upside is seen as limited with the arrival of new raw cotton supplies in mandis, especially in Punjab. On the export front, India’s cotton exports for the 2023-24 crop year are estimated to rise by 80%, reaching 28 lakh bales, driven by higher demand from countries like Bangladesh and Vietnam. In contrast, cotton imports increased to 16.4 lakh bales from 12.5 lakh bales the previous year, as per the Cotton Association of India (CAI). Closing stocks are projected to decline to 23.32 lakh bales by the end of September 2024, compared to 28.9 lakh bales last year. Globally, the U.S. cotton balance sheet shows lower production and exports for 2024/25, with a production forecast of 14.5 million bales, down 600,000 bales from August due to reduced yields. World cotton production, consumption, and trade have also been revised lower, primarily due to reduced output in the U.S., India, and Pakistan. Technically, the market saw fresh buying, with a 5.41% rise in open interest to 78 contracts, while prices increased by Rs.990. Support is seen at Rs.58,170, and a break below could test Rs.57,600. Resistance is expected at Rs.59,150, with a potential move toward Rs.59,560 if breached.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57600-59560.
* Cotton gains as USDA has lowered India's cotton production forecast for the 2024-25 to 30.72 million bales
* Cotton exports for the 2023-24 crop year or season ending September are estimated at about 80 per cent at 28 lakh bales
* The U.S. cotton balance sheet for 2024/25 shows lower production, exports, and ending stocks compared to last month.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric prices declined by -0.44% to settle at Rs.14,350 due to profit booking and news of increased sowing in key growing regions. In Indonesia, dry weather has accelerated turmeric harvesting, which is now at its peak, leading to an oversupply in the market. Additionally, the rising acreage, coupled with low export demand, is putting downward pressure on prices. However, the downside remains limited due to tighter supplies in the market and renewed buying interest from stockists, as many farmers hold back stocks in anticipation of further price increases. In terms of sowing, turmeric cultivation on the Erode line is reported to have doubled compared to last year, while Maharashtra, Telangana, and Andhra Pradesh are seeing a 30-35% increase in sowing. Last year, turmeric was sown in approximately 3-3.25 lakh hectares, and this year, the figure is expected to rise to 3.75-4 lakh hectares. Despite the higher sowing, market sources indicate that turmeric availability may still be tight in 2025 due to reduced carryover stocks from 2023. Export demand has been weak, with turmeric exports dropping by 19.52% during April-June 2024, compared to the same period in 2023. On the other hand, turmeric imports surged by 485.40% during the same period, further pressuring domestic prices. Technically, the market witnessed long liquidation with open interest down by -1.43% to 13,480 contracts, while prices fell by Rs.64. Turmeric has immediate support at Rs.14,184, and a break below could see it testing Rs.14,020. On the upside, resistance is seen at Rs.14,530, with the potential to test Rs.14,712 if breached.
 

Trading Ideas:
* Turmeric trading range for the day is 14020-14712.
* Turmeric dropped on profit booking amid news of increased sowing.
* However downside seen limited amid tighter supplies in the market and emerging buying from stockists.
* Turmeric sowing on the Erode line is reported to be double as compared to last year
* In Nizamabad, a major spot market, the price ended at 14651.55 Rupees gained by 0.48 percent.


Jeera
Jeera prices rose by 0.95% to settle at Rs.26,670, supported by robust domestic and export demand, coupled with tight global supplies. Farmers are holding back their stocks in anticipation of better prices, which has further bolstered the market. However, the upside is limited due to expectations of higher production. The sowing area in Gujarat surged by 104%, and in Rajasthan by 16%, leading to projections of a 30% increase in production this season, reaching 8.5-9 lakh tonnes. Global production of cumin has also seen significant growth, especially in China, where output has doubled to 55-60 thousand tonnes. Similarly, increased production is expected from Syria, Turkey, and Afghanistan, which could put pressure on prices as new supplies enter the market. The rising global production, combined with reduced export trade, has contributed to a shift in the cumin market dynamics, potentially weighing on prices at higher levels. India's cumin exports have risen sharply, with a 46.56% increase during April-June 2024, totaling 73,770 tonnes compared to 50,336 tonnes in the same period of 2023. However, June 2024 exports dropped by 29.12% compared to May 2024. Despite this, year-on-year exports in June increased by 60.13%. Technically, the market is witnessing fresh buying with a 1.28% increase in open interest, settling at 2,619 contracts. Jeera prices are receiving support at Rs.26,380, with a potential test of Rs.26,070 if prices fall. Resistance is expected at Rs.26,940, and a move above this level could push prices toward Rs.27,190.
 

Trading Ideas:
* Jeera trading range for the day is 26070-27190.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* Farmers holding back their stocks on expectation of better prices too bolstered prices.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 26254.3 Rupees gained by 0.17 percent.

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