IGI Logo

Gold

Gold prices fell by 1.31% to settle at Rs.75,651, pressured by the Federal Reserve’s decision to maintain a cautious stance on future rate cuts. Although the Fed lowered rates as expected, its projection of only two cuts in 2025 signals a slower path of monetary easing, bolstering the dollar and Treasury yields. Fed Chair Jerome Powell emphasized the need for further progress in controlling inflation before considering additional policy adjustments. Traders now await upcoming U.S. GDP and inflation data, which could influence the monetary policy outlook. On the demand front, India’s gold imports are expected to slow in December following record purchases in November, driven by weak domestic demand. Gold discounts in India widened to $9 per ounce, up from $2 last week, as higher domestic prices during the wedding season dampened buying interest. Similarly, discounts in China expanded to $19.4-$25 per ounce, reflecting tepid consumer confidence despite government stimulus measures. Meanwhile, central banks reported robust gold purchases, with India adding 27 tons in October, leading the year-to-date tally with 77 tons, a fivefold increase over 2023. Turkey and Poland also significantly boosted their reserves, adding 72 tons and 69 tons, respectively. Gold futures witnessed fresh selling, with open interest rising by 1.68% to 13,073 contracts, and prices declining by Rs.1,002. Key support lies at Rs.75,260, with further downside likely toward Rs.74,865. Resistance is seen at Rs.76,250, and a breakout above could push prices to test Rs.76,845.

Trading Ideas:

* Gold trading range for the day is 74865-76845.

* Gold fell after Fed signals slower easing pace in 2025

* Fed’s Powell said that Fed policymakers want to see more progress on bringing inflation down as they consider the path of future rate cuts.

* Traders now will be watching out for key U.S. GDP and inflation data due later this week that could further shape expectations around monetary policy.

Silver

Silver prices declined by 0.54%, settling at Rs.90,380, weighed down by expectations of a gradual pace of monetary easing by the U.S. Federal Reserve. The Fed's 25 bps rate cut, bringing rates to the 4.25%-4.5% range, underscored its cautious approach amidst inflationary concerns. Adding to the bearish sentiment was robust U.S. retail sales growth of 0.7% MoM in November, reflecting resilient consumer spending and reinforcing the dollar's strength. Global demand uncertainties further pressured silver prices. In China, weaker-than-expected retail sales growth and a continued slump in the property sector, despite new stimulus announcements, dampened market optimism. The lack of clarity in Beijing’s measures added to the cautious mood. According to the Silver Institute, the global silver deficit narrowed by 4% to 182 million ounces in 2024, driven by a 2% supply increase and 1% demand growth. While industrial demand and jewellery consumption reached record levels, physical investment dropped by 16%, with mine production and recycling rising by 1% and 5%, respectively. India, a major silver consumer, saw nearly double the imports this year, fueled by robust demand from the solar panel and electronics sectors, alongside investor interest in silver’s returns versus gold. Silver saw fresh selling as open interest increased by 3.46% to 29,897 contracts. Support is at Rs.89,995, with the next downside level at Rs.89,600. Resistance lies at Rs.90,860, and a break above could lead to testing Rs.91,330.

Trading Ideas:

* Silver trading range for the day is 84935-90625.

* Silver dropped amid pressure from a hawkish Federal Reserve and a poor outlook for silver’s industrial utility.

* The US economy expanded an annualized 3.1% in the third quarter of 2024

* U.S. central bankers now project they will make just two quarter-percentage-point rate reductions by the end of 2025.

Crude oil

Crude oil prices fell by 0.94% to settle at Rs.5,933, weighed down by concerns over global oil demand, particularly from China. The U.S. Federal Reserve’s indication of a slower pace of interest rate cuts in 2025 added to the bearish sentiment, as higher borrowing costs could dampen economic growth and reduce fuel demand. Additionally, a stronger dollar further pressured oil prices. Supply-side factors also played a role. Saudi Arabia's crude exports rose to 5.925 million bpd in October, the highest in four months, while Kazakhstan's production plans indicate a substantial increase in output for 2025. Barclays revised its Brent oil fair value estimate for 2025 down to $83 per barrel, citing low inventories and short-term scarcity premiums, despite a backwardated market structure. In the U.S., crude oil inventories fell by 934,000 barrels in the second week of December, lower than market expectations. Gasoline stocks rose by 2.348 million barrels, contrasting with a significant drop in distillate fuel stocks. The EIA lowered its global oil demand growth forecast for 2025 by 300,000 bpd, estimating demand at 104.3 million bpd, citing weaker economic activity in China and North America. Fresh selling saw open interest increase by 0.7% to 8,227 contracts, with prices declining by Rs.56. Crude oil has support at Rs.5,890, with further downside to Rs.5,847. Resistance is at Rs.6,000, and a break above could lead to testing Rs.6,067.

Trading Ideas:

* Crudeoil trading range for the day is 5847-6067.

* Crude oil dropped amid concerns about the outlook for oil demand, especially China

* U.S. Fed outlook for two rate cuts in 2025 stirs demand worries

* Global oil demand growth running below JP Morgan forecast

Natural Gas

Natural gas prices climbed 4.54% to settle at Rs.299.2, fueled by expectations of stronger global LNG demand and robust domestic consumption. Market sentiment was further buoyed by uncertainty surrounding Russian gas flows to Europe through Ukraine, prompting investors to secure long LNG positions. In the U.S., natural gas output in the Lower 48 states averaged 103.1 billion cubic feet per day (bcfd) in December, up from 101.5 bcfd in November. However, this remains below the record 105.3 bcfd from December 2023. Weather forecasts project seasonally colder conditions, with gas demand expected to rise from 124.0 bcfd this week to 129.1 bcfd next week. LNG export flows have also increased, averaging 14.0 bcfd in December compared to 13.6 bcfd in November. Storage levels continue to support the market. Inventories remain 6% above the five-year average, despite lower injections during the injection season. The latest data showed a withdrawal of 125 billion cubic feet last week, reducing stockpiles to 3,622 bcf, aligning with market expectations. The market witnessed fresh buying as open interest surged by 25.55% to 17,324 contracts, with prices gaining Rs.13. Natural gas has immediate support at Rs.292.1, with further downside potential to Rs.284.9. Resistance is pegged at Rs.304.9, and a breakout could push prices to Rs.310.5.  

Trading Ideas:

* Naturalgas trading range for the day is 284.9-310.5.

* Natural gas rose as bets of stronger global LNG demand magnified robust domestic consumption.

* US utilities withdrew 125 billion cubic feet of natural gas from storage

* Average gas output in the Lower 48 U.S. states rose to 103.1 bcfd so far in December, up from 101.5 bcfd in November.

Copper

Copper prices dropped 1.45% to settle at Rs.796.75, weighed down by a stronger U.S. dollar after the Federal Reserve signaled fewer rate cuts in 2025. Fed Chair Jerome Powell highlighted that future monetary policy decisions would hinge on sustained inflation reduction, contributing to the bearish sentiment. On the production front, China's refined copper output declined by 1.6% in November to 1.13 million tons, while Peru's production in October fell 1.4% year-on-year due to reduced output from major mines like Cerro Verde and Antamina. The global refined copper market is projected to have a 491,000-ton surplus in 2025, according to BNP Paribas, which also lowered its 2025 price forecast by 5% to $9,020 per ton. The International Copper Study Group (ICSG) reported a 131,000-ton deficit in the global refined copper market in September, contrasting with a 43,000-ton surplus in August. Meanwhile, China's copper imports rose 4.3% in November to a one-year high of 528,000 tons, driven by lower prices and declining domestic inventories. However, copper concentrate imports in November were 7.8% lower year-on-year, totaling 25.6 million tons for the first 11 months of 2024, a 2.2% increase compared to 2023. The copper market witnessed long liquidation as open interest fell 4.13% to 5,359 contracts, while prices dropped by Rs.11.7. Copper is finding support at Rs.794.3, with a potential test of Rs.791.9 if breached. Resistance is pegged at Rs.800.7, and a move above could see prices testing Rs.804.7.

Trading Ideas:

* Copper trading range for the day is 791.9-804.7.

* Copper declined as Federal Reserve indicated a reduced frequency of U.S. interest rate cuts for the coming year.

* China's official statistics data showed its refined copper production fell 1.6% to 1.13 million tons in November.

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

Zinc

Zinc prices fell 1.17% to settle at Rs.278.8, pressured by persistent demand uncertainty in China. Weakening retail sales growth in November and falling home prices for the 17th consecutive month underscored the challenges in the Chinese economy, the largest consumer of zinc. Beijing's recent stimulus measures failed to spark significant optimism due to their lack of detailed scope. Additionally, On the production front, zinc inventories monitored by the Shanghai Futures Exchange fell 4.4% from last week. Despite this, domestic smelter output saw notable recovery. Refined zinc production in December is expected to rise by over 20,000 mt month-on-month (5% MoM), driven by increased production in regions like Inner Mongolia, Qinghai, and Xinjiang. However, cumulative production for 2024 is down 6% YoY, reflecting the overall constrained supply environment. Globally, the zinc market deficit widened to 69,100 metric tons in October, up from 47,000 tons in September, according to the International Lead and Zinc Study Group. Despite this, the market recorded a cumulative surplus of 19,000 tons for the first ten months of 2024, down significantly from the 356,000 tons surplus last year, largely due to a 3.8% decline in global mine production. The market experienced long liquidation, with open interest dropping 17.53% to 1,543 contracts as prices slipped Rs.3.3. Zinc has immediate support at Rs.277.7, with further downside potential to Rs.276.5. Resistance is seen at Rs.280.8, and a breakout could push prices to Rs.282.7.

Trading Ideas:

* Zinc trading range for the day is 276.5-282.7.

* Zinc dropped pressured from ongoing demand uncertainty in China

* In China, new home prices fell for the 17th consecutive month, highlighting ongoing challenges in the property sector.

* Beijing's latest stimulus pledges have failed to generate significant investor optimism

Aluminium

Aluminium prices declined by 0.35%, settling at Rs.241.25 as the strong dollar and abundant supply weighed on sentiment. China, the world's largest aluminium producer, reported a 3.6% YoY increase in primary aluminium output in November, supported by improved hydropower availability in Yunnan. Cumulatively, China’s production from January to November rose by 3.86% YoY, reflecting a robust supply scenario despite some smelters undergoing maintenance due to high pot age and environmental controls.  On the trade front, China’s exports of unwrought aluminium and related products surged 17% YoY in the first ten months of 2024, totaling 5.5 million tons. In October alone, exports rose 31% YoY, indicating strong external demand. However, aluminium smelters in Guangxi, Sichuan, and Chongqing announced maintenance plans affecting approximately 100,000 mt/year of capacity, which could marginally impact supply in December. Meanwhile, Japanese buyers agreed to a 30% higher premium of $228 per ton for January-March shipments, signaling tight supply in Asia despite ample global production. November's daily aluminium output in China averaged 123,667 tons, marking a 3% increase from October. The market saw long liquidation with open interest dropping 20.27% to 1,349 contracts, while prices slipped by Rs.0.85. Aluminium has immediate support at Rs.240.7, with further downside potential to Rs.240. Resistance is seen at Rs.242.2, and a breakout above this level could test Rs.243.  

Trading Ideas:

* Aluminium trading range for the day is 240-243.

* Aluminum fell as a strong greenback and ample supply magnified the impact of uncertain demand.

* The latest data showed that the output of primary aluminum in China rose by 3.6% from the previous year in November.

* China’s aluminum production increased by 2.74% YoY

Cottoncandy

Cotton candy futures declined by 0.3%, settling at Rs.54,020, weighed down by projections of increased global cotton production for 2024-25, expected to rise by 1.2 million bales to 117.4 million bales. This growth is driven by higher output in India and Argentina. In contrast, the northern Indian states of Punjab, Haryana, and Rajasthan have reported a 43% decline in kapas arrivals compared to the previous year, exacerbating raw material shortages for ginners and spinners. Farmers are holding back produce, anticipating higher prices, which has disrupted the supply chain. Cotton imports into India for 2024-25 are estimated at 25 lakh bales, a sharp increase from the 15.20 lakh bales of the previous year. By November 30, approximately 9 lakh bales had arrived at Indian ports. Closing stocks for September 2025 are projected at 26.44 lakh bales, down from 30.19 lakh bales in the prior year. Globally, U.S. cotton production for 2024/25 has been revised upwards to 14.3 million bales, while world production is projected at 117.4 million bales, with notable increases in India, Argentina, and Brazil. Consumption is expected to rise by 570,000 bales, driven by higher demand in India, Pakistan, and Vietnam. The market experienced long liquidation, with open interest declining 0.58% to 341 contracts as prices dropped by Rs.160. Cotton candy has immediate support at Rs.53,690, with further downside potential to Rs.53,370. Resistance is seen at Rs.54,240, and a break above could test Rs.54,470.

Trading Ideas:

* Cottoncandy trading range for the day is 53370-54470.

* Cotton dropped as Global cotton production is projected to rise by more than 1.2 million bales to 117.4 million bales

* 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 25507.7 Rupees dropped by -0.16 percent.

Turmeric

Turmeric prices edged up 0.13% to settle at Rs.13,824, driven by strong buying due to low market supplies ahead of the new crop arrivals. Arrivals rose to 9,030 bags, up from 7,965 bags in the prior session, with key trading centers like Hingoli and Erode seeing strong activity, although Hingoli markets were closed. Despite this, the upside is capped as the crop is reported to be in good condition, with minimal weather-related disruptions. However, prolonged rains have delayed harvesting in some regions, potentially delaying fresh supplies. On the supply front, turmeric sowing has significantly increased compared to last year. Reports suggest sowing in Erode has doubled, while in Maharashtra, Telangana, and Andhra Pradesh, acreage is estimated to be 30-35% higher. Total sowing for the year is expected to rise from 3-3.25 lakh hectares to 3.75-4 lakh hectares, which could pressure prices in the medium term. Exports between April and October 2024 rose by 6.57% to 108,879.96 tonnes, with a notable 57.22% year-on-year jump in October 2024 exports. Imports also surged by 118.99% during the same period, reflecting increased global trade activity. The market is experiencing short covering, as open interest fell by 0.76% to 11,115 contracts, while prices gained Rs.18. Immediate support lies at Rs.13,674, with a potential downside to Rs.13,524. Resistance is at Rs.13,966, and a breakout could push prices to Rs.14,108.

Trading Ideas:

* Turmeric trading range for the day is 13524-14108.

* Turmeric gained on strong buying activity amid reports of low supplies till the arrival of new crop.

* However upside seen limited as turmeric crop is reported to be in good to excellent condition.

* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.

* In Nizamabad, a major spot market, the price ended at 13732.65 Rupees dropped by -1.02 percent.

Jeera

Jeera prices settled slightly higher by 0.02% at Rs.24,045, as sowing activities in Gujarat and Rajasthan faced delays due to weather issues. Higher temperatures over the past few weeks have impacted seeding and germination, resulting in a sowing delay of 20-25 days. Gujarat, the largest producing state, has seen sowing on only 57,915 hectares as of November 25, compared to 2.44 lakh hectares during the same period last year. India’s cumin production in 2023-24 increased to 8.6 lakh tonnes from 11.87 lakh hectares, compared to 5.77 lakh tonnes from 9.37 lakh hectares the previous year. However, production is expected to decline by 10%, with Rajasthan’s cultivation also dropping by 10-15%. Despite this, India remains the world’s cheapest source for cumin, quoted at $3,050 per tonne, attracting global buyers, including China, whose cumin prices are $200-250 higher. Exports during April-October 2024 surged 77.37% to 135,450.64 tonnes, with October exports showing a 161.04% year-on-year rise. The recent tensions in the Middle East have boosted demand from Europe and other regions, further supporting prices. The market exhibited fresh buying with a 0.71% rise in open interest to 2,544 contracts, while prices gained Rs. 5. Immediate support lies at Rs.23,940, with further downside potential to Rs.23,830. Resistance is expected at Rs.24,150, and a break above could push prices to Rs.24,250.  

Trading Ideas:

* Jeera trading range for the day is 23830-24250.

* Jeera prices 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 24374.8 Rupees dropped by -0.02 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views