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Gold

Gold saw a modest increase of 0.28%, settling at 71843 as investors sought safe-haven assets amidst escalating tensions in the Middle East and economic challenges in China. Concerns about a potential conflict between Iran and Israel, although not anticipated to draw the US into war according to a US official, spurred demand for gold. Additionally, softer-than-expected US Producer Price Index (PPI) data and China's disappointing export and import figures further fueled interest in the precious metal. China experienced a rise in physical gold premiums due to strong demand to stabilize the depreciating yuan, while in India, record-high gold prices led to dealers offering discounts for the sixth consecutive week. Discounts in India narrowed to $17 an ounce from the previous week's $28, reflecting sustained demand despite the premium. Similarly, premiums in China increased to $30-$50 per ounce, up from $25-$30, indicating robust demand amid economic uncertainties. In the Asian markets, gold premiums remained relatively stable, with Singapore seeing premiums of $1.20 to $2.20, Hong Kong charging premiums of $1 to $2, and Japan selling gold at premiums of $0.5-$0.75. These premiums indicate sustained demand across different regions, highlighting gold's status as a preferred asset during times of uncertainty. Technically, the gold market witnessed short covering, with a drop in open interest by -2.44% to settle at 22743, while prices increased by 199 rupees. Support for gold is identified at 71040, with potential testing of 70245 levels if this level is breached. On the upside, resistance is expected at 73295, with a potential move towards 74755 if prices surpass this level.
 

Trading Ideas:
* Gold trading range for the day is 70245-74755.
* Gold rose amid Middle East tensions and Chinese economic challenges.
* US expects an attack by Iran against Israel but one that would not be big enough to draw Washington into war.
* Dealers in India offered discounts of up to $17 an ounce over official domestic prices, versus last week's $28 discount.
 

Silver

Silver experienced a marginal decline of -0.04% yesterday, settling at 82813, primarily attributed to profit booking activities amidst prevailing sentiments of the Federal Reserve's intention to uphold higher rates for an extended period. Insights from New York Fed President John Williams emphasized the expected persistence of inflation setbacks, suggesting that while policy changes might not be imminent, eventual rate cuts could be on the horizon. Richmond Fed President Thomas Barkin echoed concerns about inflation, stating that the central bank has yet to achieve its desired inflationary levels, with recent CPI data failing to inspire confidence in stemming disinflationary trends. Despite its traditional role as a safe-haven asset, silver's industrial applications played a pivotal role in buoying its demand. Optimism surrounding economic recuperation in China, coupled with expectations of further stimulus measures, fueled demand for silver in critical sectors like chip and solar panel production. Additionally, positive manufacturing indicators from key economies such as the US and Germany contributed to bullish sentiment surrounding the metal. Traders, as indicated by the CME Group's FedWatch tool, are increasingly anticipating that the Fed might delay its rate-cutting cycle until after the September policy meeting, with expectations of fewer than two rate cuts this year. From a technical standpoint, the market is currently undergoing long liquidation, characterized by a notable decrease in open interest by -6.49% to settle at 25959. This decrease coincides with a drop in prices by -34 rupees. Silver's current support level stands at 81575, with a breach below potentially leading to a test of 80335 levels. Conversely, resistance is anticipated at 85090, with a breakout potentially pushing prices towards 87365.
 

Trading Ideas:
* Silver trading range for the day is 80335-87365.
* Silver pared gains on profit booking amid expectations that the Fed will maintain rates higher for longer.  
* The failure of ceasefire talks between Israel and Hamas, coupled with Iran's vow to retaliate for an airstrike, intensified worries.
* Signs of economic recovery in China, and hopes for further stimulus measures boosted demand for the metal.

Crude oil

Crude oil prices surged by 1.1% to settle at 7187 amid escalating tensions in the Middle East, intensifying concerns about potential disruptions to the global oil supply. The ongoing geopolitical uncertainty in the region continues to drive investor fears, bolstering demand for crude oil as a safe haven asset. OPEC maintained its optimistic outlook for oil demand, predicting robust fuel consumption during the summer months and reaffirming expectations for strong global oil demand growth in 2024. The organization foresees a rise in world oil demand by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, consistent with previous forecasts. However, the IEA trimmed its forecast for 2024 oil demand growth, citing lower-than-expected consumption in OECD countries and a decline in factory activity. The IEA's revision, reducing growth expectations by 130,000 bpd to 1.2 million bpd for this year, reflects concerns about the lingering impact of the COVID-19 pandemic on global economic recovery. The IEA noted that delivery data for many countries indicated softer demand, attributing it to unusually warm late-winter weather dampening OECD heating fuel use and prolonged factory slumps in advanced economies depressing demand for industrial fuels. Technically, the crude oil market witnessed fresh buying momentum, with a notable 20.27% increase in open interest, settling at 7292, while prices rose by 78 rupees. Support for crude oil is identified at 7106, with a potential test of 7026 levels if this support level is breached. On the upside, resistance is anticipated at 7294, with the possibility of prices testing 7402 upon surpassing this level.
 

Trading Ideas:
* Crudeoil trading range for the day is 7026-7402.
* Crude oil gains as the prospect of a wider conflict in Middle East continued to stoke fears of supply
* OPEC predicted robust fuel use in the summer months and stuck to its forecast for relatively strong growth in global oil demand in 2024.
* OPEC output increased by 110,000 barrels per day against February’s data.

Natural gas

Natural gas prices edged higher yesterday, settling up by 0.54% at 148.5, driven by a sustained reduction in output as producers continue to scale back drilling activities. However, gains were tempered by concerns regarding an oversupply of gas in storage and revised forecasts indicating lower demand over the next two weeks. The drop in feedgas to the Freeport LNG export plant in Texas contributed to the downward pressure on prices. US utilities added 24 billion cubic feet (bcf) of natural gas to storage during the week ended April 5th, surpassing market expectations of a 14 bcf increase. This marks the first weekly build in three weeks and the largest since mid-November. The increase contrasts with a rise of 25 bcf during the same period last year and a five-year average decline of 1 bcf for this time of year. Additionally, data from financial firm LSEG revealed a decline in gas output in the Lower 48 U.S. states to an average of 98.8 bcfd in April from 100.8 bcfd in March, further underpinning supply concerns. Looking ahead, LSEG forecasts a decline in gas demand in the Lower 48, including exports, from 99.3 bcfd this week to 94.4 bcfd next week as warmer weather sets in. However, demand is expected to rebound to 98.1 bcfd in two weeks with cooler temperatures. From a technical perspective, the market experienced short covering, evidenced by a 2.59% drop in open interest, settling at 59671, while prices saw a modest increase of 0.8 rupees. Currently, natural gas finds support at 146.1, with potential downside tests towards 143.6. On the upside, resistance is anticipated at 150.3, with a breakout potentially leading to prices testing 152.
 

Trading Ideas:
* Naturalgas trading range for the day is 143.6-152.
* Natural gas gains amid continued drop in output as producers keep reducing drilling activities.
* Concerns about oversupply of gas in storage and lower demand due to drop in feedgas to Freeport LNG export plant.
* US utilities increased natural gas storage by 24 billion cubic feet, the largest increase since mid-November.


Copper

Copper prices edged up by 0.49% to settle at 820.55 as the market witnessed improving demand and constrained supply in China, countering the impact of a robust US dollar. Chinese copper smelters are nearing regulatory approval to cut output by up to 10% this year, responding to a supply shortage exacerbated by disruptions in key mines across major producing regions. Shutdowns at the Cobre mine in Panama and others in Chile have significantly reduced copper ore supply, prompting treatment and smelter markets to slash refining fees close to zero. China, the world's largest consumer of copper, experienced a notable uptick in unwrought copper imports, rising by 16% year-on-year in March. This surge in imports, totaling 474,000 metric tons, reflects a resurgence in industrial activity and demand improvement. Moreover, first-quarter imports of unwrought copper and products totaled 1.38 million tons, marking a 6.9% increase from the same period in 2023. Additionally, imports of copper concentrate rose by 15.3% in March compared to the previous year, reaching 2.33 million tons, according to customs data. Technically, the copper market observed short covering, with a 5.56% drop in open interest to settle at 4549, while prices climbed by 4 rupees. Support for copper is identified at 813.7, with a potential test of 806.7 levels if this support level is breached. On the upside, resistance is anticipated at 832, with the possibility of prices testing 843.3 upon surpassing this level.
 

Trading Ideas:
* Copper trading range for the day is 806.7-843.3.
* Copper gains amid improving demand and low supply in China
* China's unwrought copper imports climbed 16% on-year in March
* Arrivals of unwrought copper and products in China, rose to 474,000 metric tons in March

Zinc

Zinc exhibited strength in yesterday's trading session, marking a 1.11% increase to settle at 246.2, buoyed by growing confidence in the recovery of the global manufacturing sector. Toho Zinc Co Ltd's announcement of plans to produce refined zinc at a slightly reduced rate for the first half of the 2024/25 financial year underscored the cautious optimism prevailing in the market. US inflation data exceeding expectations for March pushed out anticipated rate cut timelines, with the first cut now forecasted for September instead of June. Meanwhile, March's figures revealed a mixed picture for China's zinc production, with refined zinc production increasing month-on-month but decreasing year-on-year. Despite this, the total output for the first quarter slightly exceeded expectations, suggesting resilience in the sector amid ongoing economic transitions. On the macroeconomic front, Fitch Ratings' revision of China's sovereign credit outlook from stable to negative raised concerns about the nation's fiscal health. Heightened deficits and escalating government debt have diminished fiscal buffers, reflecting the challenges associated with transitioning towards a more sustainable economic model. From a technical perspective, the market saw short covering, evidenced by an 8% drop in open interest to settle at 3241, alongside a price increase of 2.7 rupees. Currently, Zinc finds support at 244.2, with potential downside tests towards 242.2. Conversely, resistance is anticipated at 249.7, with a potential breakout leading to prices testing 253.2.
 

Trading Ideas:
* Zinc trading range for the day is 242.2-253.2.
* Zinc gains propelled by increasing conviction that the global manufacturing slump has bottomed out.
* Japan's Toho Zinc sees 4.3% drop in H1 zinc output y/y
* Data showed that China's refined zinc production was 525,500 mt, an increase of 4.57% month-on-month


Aluminium

Aluminium prices surged by 1.05% to settle at 226.45 as investors poured funds into commodities, particularly metals, to hedge against escalating inflationary pressures. This uptick in demand for aluminium coincided with China's resilient production figures, indicating a steady growth trajectory for the metal. China, the world's largest producer and consumer of aluminium, saw a year-on-year increase of 4.19% in aluminium output in March, reaching 3.555 million metric tons. The return to normal production and shipments of aluminium smelters after the Chinese New Year holidays contributed to the boost in output. Notably, the share of aluminium liquid output rose by 9.6% month-on-month and 1.4% year-on-year, underscoring the sector's resilience despite challenges. Production capacity is expected to further expand in April, with a projected increase of 250,000 metric tons by the end of the month. Bolstering the outlook for aluminium demand, Goldman Sachs raised its forecast for China's economic growth to 5.0% this year, citing manufacturing strength. However, ratings agency Fitch revised its outlook on China to negative, citing growing risks to the country's public finance outlook, despite affirming its 'A+' IDR rating. Fitch anticipates an increase in the general government deficit to 7.1% of GDP in 2024, up from 5.8% in 2023. Technically, the aluminium market witnessed short covering, with a 4.35% drop in open interest to settle at 3406, while prices rose by 2.35 rupees. Support for aluminium is identified at 224.5, with potential testing of 222.4 levels if this support is breached. On the upside, resistance is anticipated at 229, with the possibility of prices testing 231.4 upon surpassing this level.
 

Trading Ideas:
* Aluminium trading range for the day is 222.4-231.4.
* Aluminium rose as funds pumped money into commodities including metals.
* The first batch of production resumption may be completed in mid-April, boosting production in April
* Goldman Sachs lifts China 2024 growth forecast to 5.0%

Cottoncandy

Cottoncandy prices experienced a slight decline yesterday, settling down by -0.43% at 59860, primarily driven by muted global demand and the anticipation of a better crop in countries like Australia. The International Cotton Advisory Committee (ICAC) projected increases in the cotton-producing area, production, consumption, and trade for the upcoming season, 2024-25. Despite this optimistic outlook, market sentiment was subdued due to expectations of higher supply and lower demand from mills. India, a major cotton producer, witnessed revisions in cotton production estimates by organizations like the Cotton Association of India (CAI) and the Cotton Corporation of India (CCI). While CAI revised production estimates upwards for the current season to 309.70 lakh bales, CCI raised crop production forecasts to 323.11 lakh bales. However, for the upcoming marketing year (MY) 2024/25, India's cotton production is expected to decrease by two percent due to anticipated shifts in acreage towards higher return crops. Similarly, China's cotton imports for MY 2024/25 are forecasted to increase on the back of higher domestic and international demand for textile and apparel products. Despite a decline in production in other regions, stable planted area in Xinjiang is expected to support China's cotton output. From a technical standpoint, the market witnessed long liquidation, with a 3.65% drop in open interest to settle at 422, alongside a price decline of -260 rupees. Currently, Cottoncandy finds support at 59500, with potential downside tests towards 59150. On the upside, resistance is anticipated at 60200, with a potential breakout potentially leading to prices testing 60550.
 

Trading Ideas:
* Cottoncandy trading range for the day is 59150-60550.
* Cotton dropped on muted global demand and prospects of a better crop in countries such as Australia.
* The ICAC's projections for 2024-25 suggest that the cotton-producing area may increase by 3 per cent from the 2023-24 acreage
* For 2024/25 China’s cotton imports are forecast at 2.4 million metric tons
* In Rajkot, a major spot market, the price ended at 28547.1 Rupees dropped by -0.66 percent.

Turmeric

Turmeric prices experienced a notable decline of -3.76%, settling at 16112, primarily driven by expectations of new arrivals from the Marathwada region in Maharashtra. Despite this downward pressure, downside was limited due to below-normal supplies and active festive demand. New crop supplies surged in key markets like Nanded, Nizamabad, and Erode, with arrivals significantly higher compared to the previous week. The Ministry of Agriculture and Farmers’ Welfare's first advance estimate indicated a decrease in turmeric production for 2023-24, projected at 10.74 lakh tonnes compared to 11.30 lakh tonnes the previous year. This decline in production, coupled with demand destruction as prices soared, contributed to the market's dynamics. Turmeric exports during Apr-Jan 2024 dropped by 3.52% compared to the same period in 2023, totaling 131,662.92 tonnes. Similarly, imports during the same period decreased by 22.34%, amounting to 11,781.05 tonnes. However, in January 2024, turmeric exports increased slightly by 0.63% compared to December 2023 but decreased by 15.96% compared to January 2023. Conversely, turmeric imports in January 2024 rose by 27.88% compared to January 2023. In the major spot market of Nizamabad, turmeric prices declined by -3.88%, closing at 15932.95 Rupees, reflecting the broader downward trend in the market. Technically, the turmeric market witnessed fresh selling, with a notable 12.95% increase in open interest to settle at 17180, while prices declined by -630 rupees. Support for turmeric is identified at 15902, with potential testing of 15694 levels if this support level is breached. On the upside, resistance is anticipated at 16418, with the possibility of prices testing 16726 upon surpassing this level.
 

Trading Ideas:
* Turmeric trading range for the day is 15694-16726.
* Turmeric dropped as new arrivals are expected from the Marathwada region in Maharashtra.
* New crop supply has increased by over 25% in parts of Tamil Nadu, Telangana, and Andhra Pradesh
* The Ministry of Agriculture first advance estimate for turmeric production in 2023-24 is estimated at 10.74 lakh tonnes
* In Nizamabad, a major spot market, the price ended at 15932.95 Rupees dropped by -3.88 percent.

Jeera

Jeera prices experienced a notable decline yesterday, settling down by -2.14% at 22400, primarily due to the anticipation of increased arrivals putting pressure on the market. However, this downside was somewhat offset by global buyers showing a preference for Indian jeera amidst tightening global supplies. The market observed daily arrivals of 10,000 to 12,000 bags in the Rajkot Mandi, surpassing current demand levels. The increase in sowing area and favorable weather conditions in major cumin-producing regions of Gujarat and Rajasthan have led to a significant rise in production. Gujarat is estimated to reach a record production of 4.08 lakh tonnes, while Rajasthan's production has increased by 53%. This substantial increase in production, nearly doubling from the previous year, is expected to boost cumin exports, which faced volatility in 2023 due to soaring domestic prices. Despite a decline in jeera exports during Apr-Jan 2024 compared to the same period in 2023, January 2024 witnessed a significant rise in exports, indicating a potential rebound. January 2024 saw a 53.99% increase in exports compared to January 2023, showcasing renewed demand for Indian jeera in the international market. From a technical perspective, the market is under fresh selling pressure, with a notable increase of 8.17% in open interest to settle at 2700, alongside a price decline of -490 rupees. Currently, Jeera finds support at 22150, with potential downside tests towards 21890. On the upside, resistance is anticipated at 22780, with a potential breakout leading to prices testing 23150.
 

Trading Ideas:
* Jeera trading range for the day is 21890-23150.
* Jeera dropped as there is a possibility of further increase in arrivals pressure in the market.
* There will be a huge increase in cumin exports, which will reach about 14-15 thousand tonnes in February 2024.
* New arrivals have started in Gujarat since last 20-25 days and new arrivals have started in Rajasthan also since last 15 days.
* In Unjha, a major spot market, the price ended at 23834.8 Rupees gained by 0.81 percent.

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