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Gold

Gold experienced a slight decline of -0.46% yesterday, settling at 65,595, as U.S. retail sales figures fell short of market expectations for February. This underperformance, coupled with a downward revision in January's numbers, underscored concerns about persistently high inflation and its implications for the Federal Reserve's interest rate adjustment plans. While retail sales in the U.S. rebounded by 0.6% last month, the core sales, excluding vehicle sales, only saw a 0.3% increase, missing the market consensus and reflecting a cautious consumer sentiment. Market sentiment continued to lean towards expectations of interest rate cuts, with traders pricing in a 66% chance of such cuts in June, slightly lower than the 72% probability before the release of Consumer Price Index (CPI) data. Amidst this economic backdrop, central banks, notably the Central Bank of Turkey, increased their official gold holdings, contributing to the overall upward trajectory in global gold reserves. Turkey's addition of 12.2 tonnes of gold bolstered total gold holdings to 552 tonnes, approaching the all-time high reached in February 2023. Similarly, the People's Bank of China continued its streak of gold purchases, accumulating an additional 10 tonnes in February, marking the 15th consecutive month of such acquisitions and bringing total holdings to 2,245 tonnes. From a technical standpoint, the gold market witnessed long liquidation, indicated by a notable -5.35% drop in open interest, alongside a decline in prices by -302 rupees. Support for gold is anticipated at 65,405, with a potential downside test to 65,215 levels. Conversely, resistance is likely to emerge at 65,815, with a move above potentially pushing prices towards 66,035.
Trading Ideas:
* Gold trading range for the day is 65215-66035.
* Gold fell after retail sales came in below market expectations in February.
* Inflation remains a persistent threat to the U.S. economy and the Fed’s plan to ease interest rates.
* U.S. retail sales rose by 0.6% last month following a revised decrease of -1.1% from -0.8% in January.

Silver
Silver prices closed marginally higher by 0.07% at 75226, driven by a weakened dollar and increased safe-haven demand amidst escalating geopolitical tensions. Despite slightly higher than expected consumer inflation, hopes for a Federal Reserve interest rate cut in June persisted, influencing market sentiment. In the US, initial jobless claims fell to 209,000, below market expectations, indicating continued strength in the labor market. However, continuing jobless claims saw a slight uptick, signaling potential challenges despite overall positive trends. Retail sales for February rose by 0.6%, following a revised decline in January, albeit below market forecasts, suggesting potential headwinds in consumer spending. The Producer Price Index (PPI) for February showed a 0.36% increase, exceeding expectations, with headline inflation rising 1.6% over the past 12 months, the largest rise since September 2023. Core PPI also surpassed expectations, rising by 0.3%, indicating broader inflationary pressures in the economy. Technically, the market witnessed fresh buying momentum, with a 1.25% increase in open interest alongside a 56 rupee rise in prices. Silver finds support at 74900, with potential downside to 74570 levels. Conversely, resistance is anticipated at 75600, with a move above likely leading to testing 75970 levels. This technical overview suggests a bullish outlook, supported by increased buying interest and favorable market dynamics.
Trading Ideas:
* Silver trading range for the day is 74570-75970.
* Silver settled flat on safe-haven appeal amid geopolitical tensions.
* Investors recalibrated their bets on the start of Fed's monetary easing after fresh US data.
* The number of people claiming unemployment benefits in the US fell by 1,000 to 209,000 in the week.


Crude oil
Crude oil saw a significant uptick of 2.48% yesterday, settling at 6,742, as investors absorbed the International Energy Agency's (IEA) latest oil market report, which painted a more optimistic picture for demand growth and highlighted disruptions in the Red Sea region. The IEA revised its demand growth forecasts upward for 2024 and reduced its projection for non-OPEC supply, bolstering market sentiment. Additionally, Russia's expectation of increased crude oil exports due to unplanned refinery maintenance added further support to prices. Despite clashes between OPEC and the IEA over long-term demand outlooks and supply investment needs, the IEA's report pointed to a 1.3 million barrels per day (bpd) rise in world oil demand for 2024, up by 110,000 bpd from the previous month's projection. This outlook, though slightly less bullish than OPEC's forecast of a 2.25 million bpd demand growth, still indicates a tightening of the supply-demand balance, with the possibility of a slight supply deficit this year, driven in part by OPEC+ production cuts. The IEA highlighted disruptions to shipping in the Red Sea, leading to increased trade via longer routes, thereby elevating the number of barrels at sea. This geopolitical tension added to market uncertainties, contributing to the bullish sentiment in crude oil prices. From a technical perspective, the market observed fresh buying interest, with a notable 5.34% increase in open interest alongside a significant price increase of 163 rupees. Support for crude oil is expected at 6,638, with a potential downside test to 6,534 levels. Conversely, resistance is likely to emerge at 6,806, with a breakthrough potentially pushing prices towards 6,870.
Trading Ideas:
*Crudeoil trading range for the day is 6534-6870.
* Crude oil prices rise as revised IEA forecasts suggest tighter market
* IEA raises 2024 oil demand growth forecast by 110,000 bpd
* IEA sees 2024 oil balance in slight deficit from previous surplus


Natural gas
Natural gas prices surged by 2.28% to settle at 143.3, bolstered by US utilities withdrawing a significant 9 billion cubic feet from storage, surpassing market expectations. This drawdown, coupled with CNX Resources' reduction in well completions and gas production, contributed to a decline in US gas output by 6% over the past month. Companies like EQT and Chesapeake Energy intentionally curtailed production amid lower prices. However, despite production cuts, natural gas prices are expected to decrease for the second consecutive week due to an extended outage at Freeport train 3, hampering gas flow to LNG export facilities. The timeline for the Freeport LNG outage remains uncertain, delaying a return to normal US LNG feedgas levels until mid- to late-March. The US Energy Information Administration (EIA) projected a decline in natural gas production in 2024, despite record-high demand. Dry gas production is forecasted to ease from 103.79 billion cubic feet per day (bcfd) in 2023 to 103.35 bcfd in 2024 before rising to 104.43 bcfd in 2025. Concurrently, domestic gas consumption is anticipated to increase from 89.09 bcfd in 2023 to 89.68 bcfd in 2024, before slightly decreasing to 89.21 bcfd in 2025. Technically, the market observed short covering, with a drop in open interest by -6.67% alongside a 3.2 rupee price increase. Natural gas finds support at 139, with potential downside to 134.7 levels. Conversely, resistance is likely at 145.8, with a move above possibly leading to testing 148.3 levels.
Trading Ideas:
* Naturalgas trading range for the day is 134.7-148.3.
* Natural gas gains after data showed that US utilities withdrew 9 bcf from storage.
* CNX Resources also announced a reduction in well completions and gas production for the year due to lower prices.
* US natgas output to decline in 2024, while demand rises to record high, EIA says



Copper
Copper experienced a marginal decline of -0.09% yesterday, settling at 752.2, as profit booking tempered earlier gains driven by supply concerns in China's copper market. Reports of potential output reductions by China's North Copper, amid tight supplies of copper concentrates and lower processing fees, initially buoyed prices. However, a consortium of Chinese copper smelters agreed to cut production, seeking to stabilize prices amidst recent losses. This move reflects the delicate balance between supply constraints and upcoming expansions in global copper smelting capacity. Mine disruptions and significant expansions in global smelting capacity have led to a shortage of copper ore, prompting China's major smelters to adjust production plans, maintenance schedules, and project timelines. Despite these efforts, the recent surge in inventories monitored by the Shanghai Futures Exchange (SHFE) to 239,245 tonnes by March 8 suggests ongoing challenges in balancing supply and demand dynamics. China's dominance in refined copper production, accounting for 47% of global output, underscores its influence on global copper markets. Looking ahead, analysts anticipate a potential rebound in processing fees for copper concentrate in the second quarter, traditionally a peak period for Chinese smelting maintenance. This expectation could provide some support to smelters' profitability and mitigate downward pressure on copper prices. From a technical standpoint, the market witnessed long liquidation, with a notable -5.99% drop in open interest alongside a slight price decrease of -0.7 rupees. Support for copper is anticipated at 749, with a potential downside test to 745.8 levels. Conversely, resistance is likely to emerge at 755.1, with a breakthrough potentially pushing prices towards 758.
Trading Ideas:
* Copper trading range for the day is 745.8-758.
* Copper pared gains on profit booking after prices rose as Chinese smelters agreed to cut output
* Further pressure seen weighed down by a recent surge in SHFE inventories to 239,245 tonnes by March 8.
* China produced 13 million tons of refined copper last year, or 47% of the global output.


Zinc
Zinc prices experienced a slight decline, settling down by -0.58% at 223.15, driven by a continuous inflow of imported zinc ingots and concerns over sluggish consumption recovery. The rise in zinc inventories in Shanghai Futures Exchange warehouses by 11.3% added pressure, although downside was limited by supply concerns stemming from the Seokpo smelter's output cut in South Korea. This significant reduction could potentially narrow the expected market surplus or even lead to a deficit, heightening market uncertainty. Market sentiment was influenced by various factors, including hopes of higher demand following remarks from Fed policymakers and softer-than-anticipated US labor market data, reinforcing expectations of interest rate cuts. However, downward pressure persisted due to uncertainties surrounding China's economic recovery, as the government refrained from announcing additional stimulus measures despite ongoing contraction in manufacturing activity. Elevated inventories at LME warehouses also weighed on zinc prices, signaling ample supply in the global market. Despite this, data from the International Lead and Zinc Study Group (ILZSG) revealed a global zinc market deficit in December 2023, though the surplus for the full year 2023 contrasted with the deficit recorded in 2022. Technically, the market saw long liquidation, evidenced by a drop in open interest by -3.01% alongside a decline of -1.3 rupees in prices. Zinc finds support at 221.7, with potential downside to 220.1 levels. Conversely, resistance is anticipated at 225.4, with a move above likely leading to testing 227.5 levels.
Trading Ideas:
# Zinc trading range for the day is 220.1-227.5.
# Zinc dropped as continuous inflow of imported zinc ingots may replenish part of supply.
# The downward pressure was exerted by uncertain economic recovery of leading consumer China.
# Seokpo smelter in South Korea has cut its output by a fifth.



Aluminium
Aluminium prices saw a slight decline of -0.29% yesterday, settling at 203.7, amidst robust supplies from China, the world's leading producer of the metal. Growing inventory levels in both China and LME-registered warehouses have raised concerns about demand, although some analysts attribute this increase to a seasonal pattern as consumers prepare for second-quarter consumption. In China alone, aluminium inventory surged by 85% this year to 184,358 metric tons, while LME warehouse stocks grew by 2% to 577,675 tons since the beginning of the year. China's record aluminium production in 2023 has contributed to the current supply abundance, limiting upward pressure on prices. This metal, widely used in auto parts and power cables, faces additional pressure from concerns about China's bank lending data, which is expected to show a sharp pullback in February from the record high observed in January, largely due to seasonal factors. On a global scale, the World Bureau of Metal Statistics reported a supply surplus of 135,500 tons in December last year, reflecting the imbalance between production and consumption. Similarly, data from the International Aluminum Institute showed a slight decline in global primary aluminium production in January, although it still rose by 2.4% compared to the same period last year. From a technical standpoint, the market witnessed long liquidation, with a notable -2.33% drop in open interest alongside a slight price decrease of -0.6 rupees. Support for aluminium is anticipated at 203.1, with a potential downside test to 202.3 levels. Conversely, resistance is likely to emerge at 204.8, with a breakthrough potentially pushing prices towards 205.7.
Trading Ideas:
* Aluminium trading range for the day is 202.3-205.7.
* Aluminium prices dropped amid robust supplies from China.
* There are demand concerns on growing inventory in China.
* Aluminium inventory has grown 85% so far this year to 184,358 metric tons in SHFE warehouses.


Cotton candy
Cotton candy prices witnessed a decline of -0.81% yesterday, closing at 61,480, reflecting weakness in ICE prices driven by increased supply expectations and reduced demand from mills. Factors contributing to this trend include Cotton Australia's revised estimate for Australian production, anticipating a boost to at least 4.5 million bales due to favorable weather conditions. Additionally, recent U.S. cotton forecasts indicate lower production and ending stocks for the 2023/24 season, with reduced production attributed to the March 8 Cotton Ginnings report. Despite higher global production, consumption, and trade estimates, ending stocks are projected to decrease, reflecting a tighter supply-demand balance. Notably, China's increased imports offset lower estimates for other countries, contributing to higher global trade volumes. However, the Southern India Mills' Association (SIMA) has cautioned against panic buying, urging textile mills to exercise restraint amidst rising domestic cotton prices. This sentiment is echoed by the Committee on Cotton Production and Consumption, which anticipates a reduction in export demand as domestic prices approach international levels. In the spot market, prices in Rajkot, a major trading hub, ended slightly lower at 29,572.45 Rupees, indicating a broader downward trend in cotton candy prices. From a technical perspective, the market observed long liquidation, with a notable -14.16% drop in open interest alongside a significant price decrease of -500 rupees. Support for cotton candy is expected at 61,200, with a potential downside test to 60,910 levels. Conversely, resistance is likely to emerge at 61,900, with a breakthrough potentially pushing prices towards 62,310.
Trading Ideas:
* Cottoncandy trading range for the day is 60910-62310.
* Cotton dropped tracking weakness in ICE prices amid increased supply expectations
* Cotton Australia raised its estimate for Australian production this year to "at least" 4.5 million bales
* SIMA urges textile mills to avoid panic buying as cotton prices rise, global supply expected to increase post July.
* In Rajkot, a major spot market, the price ended at 29572.45 Rupees dropped by -0.13 percent.


Turmeric
Turmeric prices faced a notable decline of -3.23% to settle at 18744, primarily driven by profit booking after a period of positive bias fueled by below-normal supplies and active festive demand. Despite the recent downturn, prevailing supply tightness is expected to continue luring stockists to buy turmeric on price dips. The seasonal trend of higher prices during March, supported by ongoing festivals and the upcoming wedding season, is likely to sustain active buying interest. Production prospects for turmeric indicate a potential decrease of about 14% year-on-year, attributed to lower cultivation area and declining yields. This production decline, coupled with steady demand, suggests a potential balancing of market dynamics in the coming months. In terms of exports, turmeric shipments during Apr-Dec 2023 witnessed a slight decline of 2.27% compared to the previous year, while imports dropped significantly by 25.43% during the same period. Despite fluctuations in export and import volumes, the overall trend suggests a relatively stable trade environment for turmeric. Technically, the market observed long liquidation, with a drop in open interest by -3.11% alongside a significant decrease in prices by -626 rupees. Turmeric finds support at 18328, with potential downside to 17914 levels. Conversely, resistance is likely at 19138, with a move above potentially leading to testing 19534 levels. This technical overview suggests a cautious stance amidst recent price volatility, urging traders to monitor supply-demand dynamics and market sentiment for informed decision-making.
Trading Ideas:
* Turmeric trading range for the day is 17914-19534.
* Turmeric dropped on profit booking after prices rose amid below normal supplies
* Festivals ahead in coming months and commencement of wedding season demand is likely to keep buyers engage.
* Production is likely to be dropped by about 14% Y-o-Y due to lower area under turmeric.
* In Nizamabad, a major spot market, the price ended at 16735.3 Rupees dropped by -1.11 percent.


Jeera
Jeera prices experienced a significant decline of -3.34% yesterday, settling at 24,330, driven by a surge in acreage during the current rabi season in key producing states like Gujarat and Rajasthan. The expansion in cultivation areas can be attributed to record prices observed in the previous marketing season, indicating a strong correlation between market prices and acreage. However, the downside is expected to be limited due to emerging weather risks in Rajasthan and Gujarat, potentially impacting yields adversely. Despite the bumper crop expectations in India, challenges such as lower water availability, fewer cold days, and concerns about fusarium wilt attacks pose risks to the yield. Additionally, anticipation of higher pest attacks due to climate issues further adds to the uncertainties surrounding production. Global demand for Indian jeera has slumped as buyers prefer alternative destinations like Syria and Turkey due to higher prices in India. This trend is reflected in the drop in jeera exports during April-December 2023 by 29.95% compared to the same period in 2022. However, there was a slight increase in exports in December 2023 compared to the previous month, albeit a decrease compared to December 2022. In the technical aspect, the market observed long liquidation, with a drop in open interest by -0.76% alongside a significant price decrease of -840 rupees. Support for jeera is expected at 23,890, with a potential downside test to 23,440 levels. Conversely, resistance is likely to be encountered at 24,950, with a move above potentially pushing prices towards 25,560.
Trading Ideas:
* Jeera trading range for the day is 23440-25560.
* Jeera dropped as jeera acreage hits a four-year high in current season.
* However downside seen limited in wake of emerging weather risk in Rajasthan and Gujarat that may affect the yield.
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 27243.7 Rupees dropped by -0.68 percent.

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