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Gold

Gold prices dropped by 1.31% to Rs.77,969, reflecting market reactions to economic data and shifting expectations for the Federal Reserve’s monetary policy. U.S. weekly jobless claims rose to 242K, surpassing expectations of 220K, bolstering projections of a 25 basis points rate cut on December 18, now priced at 98%. Futures markets predict fewer rate cuts in 2025, signaling cautious optimism for a modest growth outlook for gold as highlighted by the World Gold Council (WGC). In the physical market, gold demand softened due to high local prices driven by a weaker rupee. Indian dealers offered a $2 per ounce discount, reversing a $3 premium last week. Seasonal demand weakness in China narrowed discounts to $11-$15 per ounce, down from $19-$21, while Singapore and Hong Kong premiums ranged from $1.20 to $2.50. Central banks, however, continued robust gold purchases, with October witnessing 60 tons of acquisitions, the highest in 2024. India led purchases with 27 tons in October, contributing to its year-to-date total of 77 tons, a five-fold increase over 2023. Turkey and Poland also expanded reserves with year-to-date additions of 72 tons and 69 tons, respectively. The market experienced long liquidation, with open interest dropping 9.28% to 14,420 contracts as prices fell by Rs.1,033. Gold is currently supported at Rs.77,425, with further downside testing possible at Rs.76,885. Resistance is observed at Rs.78,770, with a move above this level likely testing Rs.79,575. Market focus remains on Fed decisions and central bank activity.

Trading Ideas:

* Gold trading range for the day is 76885-79575.

* Gold dropped as markets assessed a batch of economic data for hints on the Fed’s policy outlook next year.

* US Weekly Jobless claims increased to 242K in the first week of December, from an upwardly revised 225K in the previous week

* The latest report by the World Gold Council is projecting a more modest growth for the precious metal in 2025.

Silver

Silver prices declined sharply by 3.31% to Rs.92,633, influenced by the European Central Bank’s (ECB) fourth rate cut this year, reducing the deposit rate to 3.0%. The ECB’s easing stance, aimed at countering weak economic conditions, kept the possibility of further rate cuts open. In the U.S., initial jobless claims spiked to 242,000, well above expectations, marking the largest increase since October. Producer price inflation also surged to 3% annually in November, signaling persistent inflationary pressures. On the supply-demand front, the global silver deficit is projected to narrow by 4% to 182 million ounces in 2024 as supply grows by 2% and demand increases by 1%. Despite a 16% drop in physical investment, record industrial demand and recovering jewelry consumption are expected to drive total demand to 1.21 billion ounces. Mine production is set to rise by 1%, led by Mexico, Chile, and the U.S., while recycling will add 5%, supported by increased silverware scrap in Western markets. India, the largest silver consumer, is on track to nearly double its silver imports this year, driven by solar panel and electronics manufacturing demand and investor confidence in silver’s superior returns compared to gold. The market saw fresh selling as open interest rose by 2.93% to 23,582 contracts while prices fell Rs.3,169. Silver is currently supported at Rs.91,130, with a potential test of Rs.89,620 below this level. Resistance is expected at Rs.95,370, with further upside testing possible at Rs.98,100.

Trading Ideas:

* Silver trading range for the day is 89620-98100.

* Silver dropped as the ECB cut its benchmark interest rates, as expected, and signaled further rate cuts.

* ECB cut interest rates for the fourth time this year and kept the door open to further easing ahead.

* US initial jobless claims soared by 17,000 from the previous week to 242,000 on the first week of December.

Crude oil

Crude oil prices rose by 0.74% to Rs.5,978, driven by geopolitical and market dynamics. The European Union's agreement on additional sanctions against Russia fueled supply concerns, raising the potential for reduced Russian oil flows. Meanwhile, market optimism increased with expectations of stronger demand from China following an economic policy meeting in Beijing. On the supply front, the International Energy Agency (IEA) projected a 950,000 barrels per day surplus for 2025, despite OPEC+ extending production cuts until April 2025. However, OPEC revised its 2024 global oil demand growth forecast downward for the fifth consecutive time, now estimating an increase of 1.61 million bpd, compared to 1.82 million bpd last month. U.S. Energy Information Administration (EIA) data also highlighted reduced global demand forecasts due to slower economic activity in China and North America. Inventory data showed U.S. crude stocks fell by 1.425 million barrels last week, exceeding expectations of a 1.1 million-barrel draw. Crude stocks at Cushing, Oklahoma, dropped by 1.298 million barrels. However, gasoline inventories increased significantly by 5.086 million barrels, far above market expectations, while distillate stockpiles rose by 3.235 million barrels. The market witnessed short covering, with open interest declining by 10.67% to 6,826 contracts while prices rose by Rs.44. Crude oil has support at Rs.5,902, with a break below potentially testing Rs.5,826. Resistance is seen at Rs.6,028, and a move above could push prices towards Rs.6,078.

Trading Ideas:

* Crudeoil trading range for the day is 5826-6078.

* Crude oil gains on possible sanctions on Russia by the European Union, and expectations of increased demand from China.

* OPEC also lowered its 2025 oil demand growth outlook for the fifth consecutive month, citing weak demand in China.

* Oil demand growth has been weaker than expected this year in large part because of China.

Natural gas

Natural gas prices surged by 4.5% to Rs.299.6, driven by bullish sentiment following a larger-than-expected storage draw. The U.S. Energy Information Administration (EIA) reported a withdrawal of 190 billion cubic feet (bcf) from natural gas storage for the week ending December 6, surpassing market expectations of a 170 bcf draw. Despite the decline, storage levels remain 1.8% higher year-over-year and 4.6% above the five-year average. Robust export demand supported prices as gas flows to U.S. LNG export facilities averaged 14.1 bcf/day in December, an increase from 13.6 bcf/day in November. Domestic production also ticked up to 102.8 bcf/day, though it remains below the record 105.3 bcf/day set in December 2023. Meanwhile, meteorologists forecast warmer-than-usual temperatures across much of the U.S. through December 26, potentially limiting heating demand and capping further price gains. The U.S. entered the winter heating season with its highest natural gas storage levels since 2016 at 3,922 bcf, reflecting strong injections during the late season. Inventories remain well-stocked at 6% above the five-year average, despite lower-than-average injections throughout much of the injection season. The market witnessed fresh buying as open interest rose by 11.41% to 20,101 contracts, alongside a price gain of Rs.12.9. Natural gas has support at Rs.285.1, with a drop below potentially testing Rs.270.7. Resistance is seen at Rs.307.9, and a move above this level could push prices toward Rs.316.3.

Trading Ideas:

* Naturalgas trading range for the day is 270.7-316.3.

* Natural gas climbed driven by a larger-than-expected storage draw reported by the EIA.

* US utilities withdrew 190 billion cubic feet (bcf) of gas from storage.

* This withdrawal significantly exceeded both last year’s 72 bcf and the five-year average of 71 bcf for the same period.

Copper

Copper prices declined by 0.83% to Rs.822.65, pressured by concerns over a potential surplus in the global copper market and uncertainty surrounding China’s key policy meeting outcomes. Analysts at BNP Paribas forecast a surplus of 491,000 tons in 2025, the largest since 2020, and revised their 2025 average copper price projection down by 5% to $9,020. Additionally, the anticipated strength of the U.S. dollar added to the bearish sentiment. On the supply front, global copper output continues to grow, with Chile’s production projected to reach 5.4-5.6 million tons in 2025. Meanwhile, Chinese copper imports hit a one-year high in November at 528,000 tons, up 4.3% from October, driven by restocking amid lower domestic and global prices. For the first 11 months of 2024, China’s unwrought copper imports rose 1.7% year-on-year to 5.13 million tons, while copper concentrate imports increased by 2.2% to 25.6 million tons. The International Copper Study Group (ICSG) reported a global refined copper deficit of 131,000 metric tons in September, narrowing from a surplus of 43,000 tons in August. However, the overall market remains in surplus for the year-to-date, with a surplus of 359,000 metric tons compared to 42,000 tons last year. Copper witnessed long liquidation as open interest fell by 0.25% to 5,556 contracts, and prices dropped Rs.6.9. Support is seen at Rs.816.4, with further declines testing Rs.810. Resistance stands at Rs.832.5, with a break above potentially pushing prices to Rs.842.2.

Trading Ideas:

* Copper trading range for the day is 810-842.2.

* Copper dropped amid expectations of surplus in the global copper market.

* Global refined copper market is facing a surplus of 491,000 tons in 2025, the largest since 2020

* BNP Paribas downgraded its forecast for 2025 average copper price by 5% to $9,020.

Zinc

Zinc prices fell by 1.24% to Rs.287.35 as smelter production in China slightly increased, exceeding market expectations. Notable production gains were reported in regions such as Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi. For December 2024, domestic refined zinc production is anticipated to rise over 20,000 metric tons month-on-month (MoM), marking a 5% increase, although the cumulative production for 2024 is still down over 6% year-on-year (YoY). January 2025 production levels are also expected to remain elevated due to recovery from maintenance and year-end production boosts in several regions. Despite these gains, concerns about China's economy continue to weigh on sentiment. China’s exports grew slower than expected, and imports unexpectedly shrank in November, raising doubts about the construction sector’s prospects. Market participants are closely watching the Central Economic Work Conference for clarity on 2025 economic policies and potential stimulus measures. On the global front, the zinc market deficit narrowed slightly to 79,500 metric tons in September, compared to 85,000 tons in August. However, the first nine months of 2024 show an overall deficit of 8,000 tons, a sharp reversal from the 358,000-ton surplus during the same period last year. The zinc market is experiencing long liquidation, with open interest dropping significantly by 17.62% to 2,819 contracts as prices declined Rs.3.6. Zinc has support at Rs.284.9, with a break below potentially testing Rs.282.3. Resistance is seen at Rs.291.4, and prices may rise to Rs.295.3 if this level is breached.

Trading Ideas:

* Zinc trading range for the day is 282.3-295.3.

* Zinc dropped as smelter production slightly increased.

* The major increase in production came from the higher-than-expected production in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi.

* In December 2024, domestic refined zinc production will increase by over 20,000 mt MoM or about 5% MoM

Aluminium

Aluminium prices fell by 0.37% to Rs.243.85 as China’s production continued to rise. From January to November 2024, production increased by 3.86% YoY, with November output growing 2.74% YoY. Although some domestic smelters faced maintenance due to environmental controls and high pot age, the ramp-up of new capacities and resumptions are expected to further boost operating capacity. However, maintenance at a Guangxi smelter affecting 100,000 mt/year and small-scale maintenance in Sichuan and Chongqing could partially offset these gains. China's exports of unwrought aluminum and products surged by 17% YoY in the first ten months of 2024, reaching 5.5 million tons. In October alone, exports were up 31% YoY to 577,000 tons, reflecting strong external demand. Policy shifts in China are also influencing the market. The Politburo's announcement to adopt a "moderately loose" monetary policy and "more proactive" fiscal measures in 2025 spurred optimism for stronger domestic demand and potential GDP growth targets. These measures aim to stabilize equity markets and property prices, possibly offsetting tariff threats from the U.S. Despite rising raw material costs, improved profitability encouraged smelters in key regions like Shandong, Xinjiang, and Inner Mongolia to maintain high operating rates. The aluminium market is under long liquidation, with a 4.8% drop in open interest to 2,856 contracts as prices declined Rs.0.9. Support is at Rs.243, with a break below possibly testing Rs.242. Resistance is at Rs.245.5, and a move above this level could see prices test Rs.247.

Trading Ideas:

* Aluminium trading range for the day is 242-247.

* Aluminium dropped as China’s aluminum production increased by 2.74% YoY.

* China's imports of unwrought aluminium and aluminium products in October slid 8.7% year-on-year to 320,000 metric tons year-on-year

* In November, some domestic aluminum smelters underwent pot maintenance and winter environmental protection-related controls requiring production cuts.

Cotton Candy

Cotton Candy prices edged up by 0.24% to close at Rs.54,860, driven by increased demand from garment industries and robust export orders for cotton yarn in South India. However, USDA's weekly export sales of upland cotton fell 47% from the prior week. India's cotton production for 2024/25 is projected to decline by 7.4% year-on-year to 30.2 million bales, primarily due to reduced planting areas and crop damage caused by excessive rainfall. The planted area dropped to 11.29 million hectares, compared to 12.69 million hectares in the previous year, as farmers shifted to more lucrative crops like groundnuts in Gujarat, India's leading cotton-producing state. India’s imports are expected to increase to 2.5 million bales from 1.75 million bales last year, while exports are likely to decline to 1.8 million bales from 2.85 million bales. Despite lower production, domestic demand is anticipated to remain steady at 31.3 million bales. Globally, cotton production for 2024/25 is forecast to rise to 117.4 million bales, driven by increases in India, Argentina, Benin, and Brazil. Consumption is also projected higher at 570,000 bales, particularly in India, Pakistan, and Vietnam. Ending stocks globally are expected to grow by 267,000 bales, with notable increases in the U.S., Argentina, and Pakistan. The market witnessed fresh buying interest as open interest increased by 0.62% to settle at 324 contracts. Prices are supported at Rs.54,830, with further support at Rs.54,810. Resistance lies at Rs.54,890, and a move above could lead to testing Rs.54,930. 

Trading Ideas:

* Cottoncandy trading range for the day is 54810-54930.

* Cotton gains as Cotton yarn prices in south India increased due to rising demand.

* India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago

* Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA

* In Rajkot, a major spot market, the price ended at 25685.7 Rupees dropped by -0.19 percent.

Turmeric

Turmeric prices declined marginally by 0.2% to settle at Rs.13,924 due to reports of healthy crop conditions and rising acreage. The turmeric crop is in excellent shape this year, aided by favorable weather and higher sowing across key regions like Maharashtra, Telangana, and Andhra Pradesh, where sowing has increased by 30-35% compared to last year. This year's total sowing is estimated to rise to 3.75-4 lakh hectares from last year’s 3-3.25 lakh hectares. Despite the decline, prices are expected to remain supported in the short term due to low stock levels and limited fresh supplies until the new crop arrives. Turmeric arrivals rose to 9,030 bags from 7,965 bags previously, with major trading hubs like Erode witnessing strong inflows, although Hingoli markets were intermittently closed due to assembly elections. Additionally, delays in harvesting caused by prolonged vegetation growth may further impact the arrival timeline. On the export front, turmeric shipments from April to September 2024 rose by 0.96% to 92,911.46 tonnes compared to the same period in 2023. Imports during the same period surged by 184.73% to 15,742.12 tonnes, highlighting increased domestic demand despite a rise in acreage. The market witnessed fresh selling as open interest increased by 2.32% to 8,590 contracts while prices dipped Rs.28. Turmeric finds immediate support at Rs.13,854, with further downside testing at Rs.13,782. Resistance is seen at Rs.14,044, and a breach above this level could lead to prices testing Rs.14,162.

Trading Ideas:

* Turmeric trading range for the day is 13782-14162.

* Turmeric dropped as turmeric crop is reported to be in good to excellent condition.

* However downside seen limited on strong buying activity amid reports of low supplies till the arrival of new crop.

* Although crop acreage has improved, delay in harvesting due to prolonged rains may impact the timelines of fresh supplies.

* In Nizamabad, a major spot market, the price ended at 13748.55 Rupees gained by 0.01 percent.

Jeera

Jeera prices rose by 0.48% to close at Rs.24,080 due to sowing delays in Gujarat and Rajasthan, the primary producing states. Higher temperatures have affected seeding and germination, with Gujarat reporting only 57,915 hectares under jeera cultivation as of November 25, a sharp decline compared to 2.44 lakh hectares during the same period last year. This represents just 15% of the normal cropping area of over 3.81 lakh hectares. Rajasthan also anticipates a 10-15% reduction in sowing, potentially reducing overall production. India's jeera production stood at 8.6 lakh tonnes in 2023-24, up from 5.77 lakh tonnes the previous year, but a 10% decline is expected this year due to weather-related disruptions. On the global front, Indian cumin remains the cheapest option, with prices at $3,050 per tonne compared to $3,250-$3,300 for Chinese cumin. This has driven strong export demand, with jeera exports during April-September 2024 surging 70.02% to 1,19,249.51 tonnes compared to the same period in 2023. September 2024 exports rose by 24.64% month-on-month and 162.34% year-on-year, reflecting heightened demand from Europe, the Middle East, and China. The market is experiencing fresh buying as open interest increased by 0.62% to 2,436 contracts while prices rose Rs.115. Jeera has immediate support at Rs.23,920, with further downside testing at Rs.23,750. Resistance is seen at Rs.24,220, and a breach above this level could push prices towards Rs.24,350.

Trading Ideas:

* Jeera trading range for the day is 23750-24350.

* Jeera gained as sowing has been delayed.

* Higher day temperatures in the past few weeks has impacted the seeding of jeera and has also led to poor germination in various places.

* In Gujarat, jeera sowing has taken place in only 57,915 hectares till November 25 during the rabi 2024-25 cropping season.

* In Unjha, a major spot market, the price ended at 24523.25 Rupees gained by 0.14 percent.

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