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Gold

Gold prices settled down by -0.05% at 73,055, as investors awaited the Federal Reserve's monetary policy decisions, signaling the start of the first U.S. monetary easing cycle in over four years. The Federal Reserve cut its benchmark interest rate by 50bps to 4.75%-5%, marking the first reduction since March 2020. Policymakers expect an additional 100 bps of easing by year-end, with two more 25 bps cuts likely. For 2025, further cuts totaling 100bps are expected, followed by a final 50bps cut in 2026. Despite the easing cycle, U.S. retail sales unexpectedly rose in August, indicating solid economic performance in Q3. Additionally, inflation remains sticky, with producer prices rising slightly more than anticipated in August, primarily due to service costs, though the overall trend suggests inflation is easing. In Europe, the ECB followed suit with a 25bps rate cut, signaling confidence in a sustained downward trend in inflation. Meanwhile, retail buyers in key Asian markets like India and China remained cautious due to high gold prices. Indian dealers offered discounts up to $22 per ounce, the highest in two months, while Chinese dealers offered $8.6-$10 discounts. Despite subdued demand, rising prices may prompt a pickup in purchases by October-November. In India, the recent reduction in import duties is expected to boost demand during the festival season. Technically, the gold market is undergoing long liquidation, with open interest down by -3.21% to 13,276 as prices dropped by -39 rupees. Gold finds support at 72,920, with a potential test of 72,785 if this level is breached. Resistance is expected at 73,260, and a move above this could lead to testing of 73,465 levels.
 

Trading Ideas:
* Gold trading range for the day is 72785-73465.
* Gold steadied as Fed to start its U.S. monetary easing cycle for the first time in over four years.
* Fed lowered its benchmark interest rate by 50bps to 4.75%-5% in light of the progress on inflation
* U.S. retail sales unexpectedly rose in August, suggesting that the economy remained on a solid footing

Silver

Silver prices settled down by 0.94% at ?88,299 as traders remained cautious ahead of the Federal Reserve's anticipated monetary policy decision. The Fed recently cut its benchmark interest rate by 50 basis points, bringing it down to 4.75%-5% in response to inflation control and balanced risks. This marks the first rate cut since March 2020 after keeping rates at historically high levels. The Federal Reserve is expected to implement another 100 basis points of easing by year-end, including two more 25 bps cuts. Looking ahead to 2025, another 1% rate reduction is projected, followed by an additional 50 bps cut in 2026. Adding to concerns, economic data from China, the world’s top metals consumer, disappointed the market. Industrial output, retail sales, and fixed asset investments in China fell short of expectations in August, while the urban unemployment rate climbed to a six-month high, and home prices dropped at their fastest rate in nine years. Meanwhile, India's silver imports are expected to nearly double in 2024 due to increased demand from the solar panel and electronics industries, as well as investor optimism that silver may offer better returns than gold. India's imports surged to 4,554 metric tons in the first half of 2024, compared to 560 tons during the same period last year. Technically, the silver market is under long liquidation, with open interest dropping by 2.53%. Prices declined by ?841, with support at ?87,870 and a potential test of ?87,445 if the decline continues. Resistance is expected at ?88,970, and a move above could see prices testing ?89,645.
 

Trading Ideas:
* Silver trading range for the day is 87445-89645.
* Silver dropped as traders turned cautious ahead of a highly-anticipated monetary policy decision from  Fed
* Fed cuts interest rates by 50 bps for first time since 2020
* Manufacturing production in the US rose 0.9% from a month earlier in August 2024

Crude oil

Crude oil prices declined by -1.27%, settling at 5,913, as an industry report indicated increasing U.S. crude and fuel inventories, outweighing concerns about rising tensions in the Middle East and the potential bullish impact of a U.S. interest rate cut. Demand concerns persist, particularly from China, where recent data has raised worries about the country's sluggish economic recovery. China's crude oil imports in August dropped 7% year-on-year, reflecting weak refining margins and low fuel consumption, though imports recovered slightly from July's levels. China's annual demand growth has slowed significantly, from around 500,000-600,000 barrels per day (bpd) before the pandemic to about 200,000 bpd now. Meanwhile, supply concerns in the U.S. eased as 12% of crude production in the Gulf of Mexico remained offline, down from over 40% at the peak disruption caused by Hurricane Francine. Major oil companies like Exxon Mobil and Chevron have begun restarting operations in the region. On the inventory front, crude oil inventories in the U.S. fell by 1.63 million barrels for the week ending September 13, exceeding market expectations of a 0.1 million barrel decrease. Additionally, crude stocks at the Cushing delivery hub dropped by 1.979 million barrels. Gasoline and distillate stockpiles rose slightly, but both were below market expectations. Technically, the market is experiencing long liquidation, with open interest dropping by -59.23% to 3,704 as prices fell by -76 rupees. Crude oil is finding support at 5,824, with a potential test of 5,736 if this level breaks. Resistance is likely at 5,991, and a move above this could see prices testing 6,070.
 

Trading Ideas:
* Crudeoil trading range for the day is 5736-6070.
* Crude oil prices fell after an industry report showed increasing U.S. crude and fuel inventories
* Crude oil inventories in the US fell by 1.630 million barrels in the week ended September 13, 2024.
* Crude stocks at the Cushing, Oklahoma, delivery hub went down by 1.979 million barrels, following a 1.704 million barrel fall.

Natural Gas

Natural gas prices settled down by 1.63% at ?193.3 as Gulf of Mexico producers gradually resumed production after Hurricane Francine, easing supply concerns and prompting some profit-taking. Approximately 10% of natural gas output in the U.S. Gulf of Mexico remained offline, compared to 53% shut down following the storm. LSEG estimates 134 cooling degree days (CDDs) over the next two weeks, above the seasonal norm of 94 CDDs, indicating strong demand for cooling and, consequently, natural gas. Meanwhile, LSEG forecasts that average gas demand in the Lower 48 states, including exports, will rise from 100.0 billion cubic feet per day (bcfd) this week to 100.5 bcfd next week. Gas supply is expected to increase from 101.9 bcfd this week to 102.2 bcfd next week. However, natural gas production in the Lower 48 states has averaged 102.1 bcfd in September, down from 103.2 bcfd in August, due to producers scaling back on drilling. The U.S. Energy Information Administration (EIA) projects that U.S. natural gas production will decline slightly in 2024 to 103.4 bcfd before rebounding to 104.8 bcfd in 2025. Domestic gas consumption is also expected to rise to a record 89.9 bcfd in 2024, before easing slightly in 2025. U.S. utilities added 40 billion cubic feet of gas to storage for the week ending September 6, 2024, below market expectations, raising stockpiles to 3,387 Bcf, which is above the five-year average. Technically, natural gas is under fresh selling pressure, with open interest rising by 2.93%. Support is at ?189.6, with a potential test of ?186, while resistance is at ?198, with a move above possibly testing ?202.8.
 

Trading Ideas:
* Naturalgas trading range for the day is 186-202.8.
* Natural gas fell as Gulf of Mexico producers slowly ramp up production after Hurricane Francine
* About 10% of natural gas output in the U.S. Gulf of Mexico was offline in the aftermath of Francine, the U.S. BSEE said.
* The U.S. EIA said utilities added 40 billion cubic feet (bcf) of gas into storage.


Copper

Copper prices edged up by 0.12%, settling at 808.95, benefitting from a softer US dollar as markets continued to weigh the balance between lower near-term demand and uncertain supply. The Federal Reserve's less-restrictive policy, responding to weak US factory momentum, has provided some support to copper, with the latest contractionary ISM and S&P manufacturing PMIs reflecting slower economic activity. Additionally, the market is awaiting potential economic stimulus from China, where weaker-than-expected industrial output, retail sales, and fixed-asset investments highlighted the need for more supportive policies. On the supply side, energy shortages in Zambia, a key copper-producing country, have pressured output, while Chinese copper inventories in Shanghai Futures Exchange warehouses have fallen 45% over the past three months, now at their lowest since February. Despite these supply issues, the global refined copper market remains in surplus, with a 95,000 metric ton surplus in June, as reported by the International Copper Study Group (ICSG). Chile's Codelco, a major copper producer, also reported a 10.7% drop in July output, further adding to supply concerns. Technically, the copper market saw short covering, with open interest dropping by -17.15% to 7,168, while prices increased by 1 rupee. Copper finds support at 803.6, with a potential test of 798.3 if that level is breached. On the upside, resistance is seen at 812.9, and a move above this level could push prices toward 816.9. The combination of weak demand, supply constraints, and shifting inventories suggests that copper prices will remain volatile in the near term.
 

Trading Ideas:
* Copper trading range for the day is 798.3-816.9.
* Copper recovered due to soft US dollar as markets continued to assess risks of lower near-term demand.
* Chinese President Xi Jinping urges authorities to achieve annual economic goals.
* Copper inventories in warehouses fell 13.9% from last Friday

Zinc

Zinc prices settled down by 0.36% at ?266.55, as concerns about global economic growth weighed on industrial metals. However, downside pressure was limited by hopes of stimulus in China, as President Xi Jinping urged efforts to meet the country's annual economic targets, raising expectations for more measures to boost the slowing economy. In industry news, Swedish miner Boliden announced a delay in the expansion of its Odda zinc smelter in Norway, with costs increasing by €100 million. The ramp-up to the new annual production capacity of 350,000 tonnes will begin in Q1 2025, later than initially expected, with full output anticipated during 2025. On the global trade front, China's exports grew by 4.6% year-on-year in August 2024, slowing from 7% in July, while imports rose by 2.5%, beating expectations. In addition, total zinc inventories in LME warehouses rose by 2.6% to 217,575 tonnes by the end of August. The global zinc market surplus fell to 8,700 tonnes in June from 44,000 tonnes in May, according to the International Lead and Zinc Study Group (ILZSG). Domestically, China's refined zinc production in July 2024 dropped by 10.3% month-on-month, affected by heavy rainfall in Sichuan and unexpected production cuts in Yunnan, Guangdong, and Guangxi. Maintenance activities in key smelting regions like Henan and Inner Mongolia further contributed to the decline. Technically, zinc is in a phase of long liquidation, with open interest dropping by 7.76%. Prices decreased by ?0.95, with support at ?264.2 and potential testing of ?261.7. Resistance is seen at ?268.7, with a move above potentially testing ?270.7.
 

Trading Ideas:
* Zinc trading range for the day is 261.7-270.7.
* Zinc dropped as concerns about global economic growth kept industrial metals under pressure.
* President Xi Jinping pushed for the country to achieve its annual economic target.
* Boliden said the expansion of its Odda zinc smelter in Norway will take longer than expected due to a delay in construction work.


Aluminium

Aluminium prices rose by 0.35%, settling at 230.75, driven by expectations of fresh government stimulus to boost economic activity and support the aluminium market. The market has been buoyed by tightening supply, with inventories at their lowest in 18 weeks. China's imports of unwrought aluminium and aluminium products increased 1.9% year-on-year in August to 280,000 metric tons, and imports for the first eight months surged by 51% to 2.58 million tons, highlighting strong demand. Meanwhile, aluminium inventories at the three major Japanese ports rose 9.2% to 327,300 metric tons by the end of August, while LME stocks fell 18% over the last three months to 820,850 tons. Demand-side factors also contributed to the price rise, with the aluminium market entering its traditional peak season, driving consumption and lowering inventories. Additionally, China's manufacturing data hit a six-month low, with weak orders, but stimulus expectations and a reduction in aluminium inventories from the Shanghai Futures Exchange helped support prices. On the supply side, China’s August aluminium output surged to 3.73 million metric tons, the highest monthly output since 2002, driven by strong smelter activity in key regions and higher aluminium prices. Global aluminium production in July increased by 2.4% year-on-year to 6.194 million tons, with China producing 3.69 million tons, a 2.5% increase. Technically, the market saw short covering, with open interest dropping by -7.81% to 2,018 while prices rose by 0.8 rupees. Aluminium has support at 228.3, with a potential test of 225.7 if this level is breached. Resistance is expected at 232.6, and a move above this could push prices towards 234.3.
 

Trading Ideas:
* Aluminium trading range for the day is 225.7-234.3.
* Aluminium gains as markets now expect fresh government stimulus to boost the economy.
* Prices have been boosted by a shrinking aluminium supply that has fallen to its lowest in 18 weeks.
* China's Aug aluminium imports up 1.9% y/y

Cottoncandy

Cottoncandy prices fell by -0.66%, settling at 58,280, as new arrivals of raw cotton began in the mandis of Punjab. However, the downside was limited by the USDA's revised forecast for India's cotton production, which was lowered to 30.72 million bales for the 2024-25 season due to crop damage from excessive rains and pest issues. Additionally, cotton acreage has dropped by 9% in the current kharif season to 110.49 lakh hectares, compared to 121.24 lakh hectares last year. Cotton exports for the 2023-24 season, ending in September, are estimated at 28 lakh bales, up significantly from 15.50 lakh bales in the previous year, driven by strong demand from countries like Bangladesh and Vietnam. As of August, exports reached 27 lakh bales, while imports increased to 16.40 lakh bales from 12.50 lakh bales last year. The Cotton Association of India (CAI) estimates closing stocks at 23.32 lakh bales by September 30, 2024, down from 28.90 lakh bales a year ago. On the global front, the U.S. cotton production forecast for 2024/25 was revised down to 14.5 million bales, while global production, consumption, trade, and ending stocks were also lowered. World production is down by 1.2 million bales due to smaller crops in the U.S., India, and Pakistan, while consumption saw a 460,000-bale reduction. Technically, Cottoncandy experienced long liquidation, with open interest dropping by -4.42% to 108 and prices down by -390 rupees. Support is seen at 58,080, with a potential test of 57,890 if breached, while resistance is likely at 58,580, with a move above potentially testing 58,890.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57890-58890.
* Cotton dropped as raw cotton has started arriving in mandis of Punjab.
* 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 settled up by 1.01% at ?14,572, driven by tighter supplies and emerging buying interest from stockists. Farmers are holding back stocks in anticipation of further price increases, providing additional support. However, the upside is somewhat limited due to news of increased sowing. In Indonesia, dry weather has accelerated harvesting, leading to peak supply levels. Some farmers are selling turmeric in its wet stage, reducing production and impacting overall supply. In India, sowing on the Erode line has reportedly doubled compared to last year, while states like Maharashtra, Telangana, and Andhra Pradesh have seen a 30-35% increase in turmeric sowing. Total turmeric sowing this year is estimated to increase to 3.75-4 lakh hectares, up from 3-3.25 lakh hectares last year. Due to unfavorable weather conditions last year, production in 2024 was estimated at 45-50 lakh bags, with an outstanding stock of 35-38 lakh bags. Even with increased sowing this year, the upcoming crop is expected to be around 70-75 lakh bags, while outstanding stock will be zero, leading to a supply deficit in 2025. On the trade front, turmeric exports during April-June 2024 dropped by 19.52%, and imports surged by 485.4%, highlighting a shift in market dynamics. Exports in June 2024 fell 18.43% compared to June 2023. Technically, the turmeric market is experiencing short covering, with open interest dropping by 0.47%. Prices gained ?146, with support at ?14,406 and a potential test of ?14,238 if the decline resumes. Resistance is seen at ?14,716, with a move above potentially testing ?14,858.
 

Trading Ideas:
* Turmeric trading range for the day is 14238-14858.
* Turmeric gains amid tighter supplies in the market and emerging buying from stockists.
* Some support also seen as farmers are holding back stocks in anticipation of a further rise.
* However upside seen limited amid news of increased sowing.
* In Nizamabad, a major spot market, the price ended at 14484.15 Rupees gained by 0.84 percent.

Jeera

Jeera prices edged up by 0.04%, settling at 25,925, supported by strong domestic and export demand, as well as tight global supplies. Farmers are holding back their stocks in anticipation of better prices, adding to the price support. However, the upside was limited by expectations of higher production, with jeera output in India projected to increase by 30% this season to 8.5-9 lakh tonnes due to a substantial rise in the cultivation area. In Gujarat, the sowing area increased by 104%, and in Rajasthan by 16%. Globally, jeera production has seen significant increases, particularly in China, where output has surged to 55-60 thousand tons from the previous 28-30 thousand tons. Similarly, increased production is expected in Syria, Turkey, and Afghanistan, contributing to the anticipation of a price decline as new supplies enter the market. Despite these global increases, India remains a key player, with an expected boost in exports. Jeera exports during April-June 2024 rose by 46.56% to 73,770.58 tonnes compared to the same period last year. Technically, the market saw fresh buying, with open interest increasing by 1.36% to 2,451, while prices gained 10 rupees. Jeera has immediate support at 25,680, with a potential test of 25,440 if this level is breached. On the upside, resistance is expected at 26,150, and a move above this level could push prices toward 26,380. The overall outlook suggests that robust demand and tight supplies may keep prices supported in the near term, although higher production could cap gains.
 

Trading Ideas:
* Jeera trading range for the day is 25440-26380.
* Jeera settled flat 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 25740.55 Rupees dropped by -0.19 percent.

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