IGI Logo

Gold

Gold prices declined by 0.33% to settle at Rs.78,166 as strong U.S. jobs data bolstered the dollar and reinforced the Federal Reserve's cautious approach to interest rate cuts. The nonfarm payrolls report showed a robust gain of 256,000 jobs in December, the highest since March, while revisions to October and November reduced previous figures by 8,000 jobs. Market expectations for rate cuts this year eased to 25 basis points from 40 basis points last week. Upcoming U.S. economic indicators, including the Consumer Price Index (CPI), Producer Price Index (PPI), jobless claims, and retail sales, are expected to provide further guidance on the Fed’s policy trajectory. In the physical market, Indian gold dealers increased discounts to $17 an ounce from $14 last week due to weaker demand as local prices touched a monthly high. Conversely, the Lunar New Year festival boosted buying activity in other major Asian markets. China’s dealers quoted a range from a $2 discount to a $9 premium per ounce, while Singapore saw premiums of $0 to $2.50. Meanwhile, Hong Kong and Japan quoted smaller premiums, reflecting varying local market dynamics. Central banks continued to support gold demand in November, collectively adding 53 tonnes to reserves. Poland was the largest buyer with 21 tonnes, while India added 8 tonnes, raising its 2024 purchases to 73 tonnes. China resumed buying in November and December, with reserves reaching 73.29 million ounces. Technically, the market is under long liquidation, with open interest dropping by 6.16% to 10,488 contracts. Immediate support is at Rs.77,935, with a further test likely at Rs.77,695. Resistance is seen at Rs.78,590, and a break above could target Rs.79,005. These levels should guide traders for short-term opportunities.

Trading Ideas:

* Gold trading range for the day is 77695-79005.

* Gold prices eased as strong U.S. jobs data reinforced the Fed’s cautious stance on interest rate cuts.

* Though underlying safe-haven demand amid uncertainty around President-elect Donald Trump's policies curbed losses.

* Currently, markets anticipate 25 basis points of easing so far this year, compared with expectations of 40 basis points last week.

Silver

Silver prices declined sharply by 2.15% to settle at Rs.90,513 as the US 10-year Treasury yield approached 4.8%, its highest level since October 2023, prompting a reduction in expectations for Federal Reserve rate cuts this year. Strong U.S. labor market data, including unexpected job growth acceleration in December and a drop in the unemployment rate to 4.1%, reinforced views that the Federal Reserve would likely maintain its current policy stance. The Labor Department's report highlighted improvements in key labor metrics, easing fears of market deterioration. Globally, the silver market remains under a structural deficit, with a 4% decrease in the deficit projected for 2024 to 182 million ounces. Total supply is expected to grow by 2%, driven by higher mine output from Mexico, Chile, and the United States, alongside a 5% increase in recycling due to heightened silverware scrap in Western markets. On the demand side, industrial applications, including electric vehicles, solar panels, and electronics, along with recovering jewelry consumption, are anticipated to drive demand to 1.21 billion ounces in 2024. Notably, physical investment is forecasted to drop by 16%, while exchange-traded products (ETPs) are on track for their first annual inflows in three years, bolstered by a 32% rise in spot prices this year. Technically, the market is under fresh selling pressure, with open interest increasing by 5.41% to 21,873 contracts. Silver finds immediate support at Rs.89,625, with further downside potential to Rs.88,730. On the upside, resistance is pegged at Rs.92,040, and a breakout could lead to Rs.93,560. Traders should monitor these levels for market direction.

Trading Ideas:

* Silver trading range for the day is 88730-93560.

* Silver dropped as the yield on the US 10-year Treasury note neared 4.8%, its highest level since October 2023.

* Concerns over inflationary policies under President-elect Donald Trump also added to the cautious outlook.

* U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1%.

Crudeoil

Crude oil prices surged by 4.35% to settle at Rs.6,862 as the market reacted to new U.S. sanctions on Russia’s energy sector, fueling supply concerns. These sanctions, the most comprehensive yet, targeted major exporters, insurers, and over 150 tankers, disrupting global oil flows. Key buyers like India and China are scrambling for alternatives, with emergency meetings held by refiners. Initial disruptions include sanctioned tankers stuck off China, potentially impacting up to 800,000 barrels per day of Russian oil exports. Further adding to supply pressures, U.S. crude inventories at the Cushing, Oklahoma hub fell by 2.5 million barrels last week to their lowest levels since 2014. Total U.S. crude stocks dropped by 959,000 barrels to 414.6 million barrels, against expectations of a smaller 184,000-barrel draw. Refinery crude runs increased by 45,000 barrels per day, pushing utilization rates to 93.3%. However, gasoline and distillate inventories rose by 6.3 million and 6.1 million barrels, respectively, reflecting mixed demand dynamics. U.S. oil production also hit a record 13.46 million barrels per day in October, as demand reached pre-pandemic highs. Geopolitical concerns, including potential sanctions on Iran and trade conflicts under President-elect Donald Trump, have heightened market uncertainties. Meanwhile, increased demand for distillates such as diesel and heating oil rose to its highest in a year. Technically, crude oil is experiencing short covering, with open interest declining by 6.57% to 14,352 contracts. Immediate support is at Rs.6,740, with further downside potential to Rs.6,618. Resistance is seen at Rs.6,929, and a break above this level could push prices to Rs.6,996. These levels provide key guidance for traders.

Trading Ideas:

* Crudeoil trading range for the day is 6618-6996.

* Crude oil surged as new US sanctions on Russia’s energy sector raised concerns about supply disruptions.

* Prices were also supported by optimism around increased fuel demand from icy conditions in the U.S. and Europe.

* Support also seen amid falling US stockpiles, colder weather, and speculation that the incoming Trump administration may tighten sanctions on Iran.

Natural Gas

Natural gas prices declined by -1.75% yesterday, settling at Rs.336.7, driven by profit booking and easing disruptions from freezing pipes. Flows to the Freeport LNG export plant in Texas have improved, while colder weather forecasts and increased heating demand through January 25 provided underlying support. Meteorologists predict below-average temperatures across much of the U.S., potentially boosting demand further. Despite the dip in prices, liquefied natural gas (LNG) exports remain robust, with feedgas flows reaching a record 15.5 billion cubic feet per day, bolstered by activity at Texas's Plaquemines LNG plant. U.S. natural gas production averaged 102.6 bcfd in January, down from December’s 103.8 bcfd, as freeze-offs reduced output by 16.5 bcfd earlier in the month. This winter’s output disruptions are milder compared to prior years. U.S. storage levels saw a withdrawal of 40 bcf, bringing total inventories to 3,373 bcf for the week ending January 3rd, slightly below market expectations of a 51 bcf draw. Stocks are now 0.1% below last year’s levels but maintain a 6.5% surplus over the five-year average. The U.S. Energy Information Administration (EIA) projects production to ease to 103.2 bcfd in 2024 while domestic consumption rises to 90.5 bcfd, reflecting record demand. The market witnessed long liquidation, with open interest falling by -14.97% to 12,252 contracts. Natural gas finds support at Rs.324.5, with a potential test of Rs.312.4 on further downside. Resistance is expected at Rs.358.1, and a move above this could push prices toward Rs.379.6.

Trading Ideas:

* Naturalgas trading range for the day is 312.4-379.6.

* Natural gas dropped amid a reduction in the amount of gas curtailed by freezing pipes.

* Prices declined despite forecasts for colder weather and more heating demand next week than previously expected.

* Meteorologists expect below-average temperatures across much of the US through January 25, with even chillier conditions ahead.

Copper

Copper prices edged up by 0.27% to settle at Rs.828.25, supported by optimism around China's economic recovery. The Chinese government reaffirmed its commitment to aggressive monetary and fiscal policies to boost consumption in 2024, bolstering demand for the red metal. Additionally, China's imports of unwrought copper and copper products surged by 18% year-on-year in December to 559,000 metric tons, the highest in 13 months. This signals increased smelter activity and a potential rise in manufacturing output. Global supply concerns also lent support to prices, with aging mines posing risks of disruption. However, gains were tempered by the U.S. dollar's rally following strong labor data, which made greenback-priced commodities more expensive for foreign buyers. On the supply-demand front, the International Copper Study Group (ICSG) reported a global refined copper market deficit of 41,000 metric tons in October, narrowing from a 136,000 metric tons deficit in September. For the first 10 months of the year, the market showed a 287,000 metric tons surplus, compared to a mere 9,000 metric tons surplus during the same period last year. World refined copper output in October was 2.30 million metric tons, while consumption was slightly higher at 2.34 million metric tons. The market experienced short covering, with open interest declining by 4.59% to 5,075 contracts while prices rose by Rs.2.25. Copper has immediate support at Rs.824.5, with further downside possible to Rs.820.8. Resistance is pegged at Rs.831.4, and a breakout above this level could push prices toward Rs.834.6, indicating bullish momentum.

Trading Ideas:

* Copper trading range for the day is 820.8-834.6.

* Copper gains as the Chinese government pledged aggressive bouts of economic support.

* However upside seen capped by the dollar’s rally following strong labor data in the US.

* Imports of unwrought copper and products to China soared by 18% to 559 thousand tonnes in December

Zinc

Zinc prices remained unchanged at Rs.273.05, as a strong U.S. dollar, supported by robust economic data, weighed on the base metals market. The U.S. jobs report, highlighting unexpected job growth acceleration and a drop in the unemployment rate to 4.1%, led traders to scale back expectations for Federal Reserve rate cuts this year, bolstering the dollar. However, optimism persists about Beijing's commitment to economic stimulus, which could support demand for industrial metals like zinc. On the inventory front, zinc stocks monitored by the Shanghai Futures Exchange dropped by 10.8% from last Friday. Domestic refined zinc production in China rose by over 20,000 metric tons (mt) month-over-month in December, marking a 5% increase. Despite this, cumulative domestic refined zinc production in 2024 saw a year-on-year decline of over 6%, reflecting constrained production levels earlier in the year. The increase in December's output was attributed to higher-than-expected production in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi, offsetting reductions in other regions. Globally, the zinc market deficit widened to 69,100 metric tons in October from 47,000 tons in September, according to the International Lead and Zinc Study Group (ILZSG). However, the first ten months of 2024 recorded a global surplus of 19,000 tons, significantly lower than the surplus of 356,000 tons in the same period last year. Refined metal production fell 1.7%, while mine production declined 3.8% due to lower output in Canada, China, South Africa, and Peru. Technically, zinc is under long liquidation, with open interest dropping by 7.55% to 2,559 contracts. Immediate support is at Rs.271, with further downside potential to Rs.268.8. Resistance is seen at Rs.275.5, and a breakout could push prices to Rs.277.8. These levels will be critical for traders to monitor.

Trading Ideas:

* Zinc trading range for the day is 268.8-277.8.

* Zinc prices settled flat amid a strong U.S. dollar following robust economic data.

* However, markets remain optimistic that Beijing will follow through on its recent commitments to ramp up monetary and fiscal stimulus.

* Zinc inventories in warehouses monitored by the Shanghai Futures Exchange down 10.80% from last Friday.

Aluminium

Aluminium prices rose by 0.47% yesterday to settle at Rs.246.2, supported by concerns over declining inventories in LME-registered warehouses. Stocks have dropped 45% since May 2023 to 619,375 tons, with nearly 60% of cancelled warrants indicating further outflows in the coming weeks. This supply tightness has narrowed the discount between cash aluminium and the three-month contract to $13 per ton, down from over $40 in December. Global aluminium production remains on an upward trajectory, with December 2024 output projected to exceed 6 million tons, setting a record high. China, the world’s largest producer, increased aluminium production by 3.6% year-on-year in November to 3.71 million metric tons, driven by capacity expansions despite challenges like declining profits. Daily output in November averaged 123,667 tons, up 3% from October. For the first eleven months of 2024, China’s total aluminium production rose by 4.6% year-on-year to 40.22 million metric tons. Meanwhile, the global refined aluminium market saw a supply deficit of 40,300 tons in October, with production at 6.0856 million tons and consumption at 6.1259 million tons. Year-to-date, the cumulative supply shortage stands at 332,600 tons. Supporting the demand outlook, China’s exports of unwrought aluminium and products surged 17% year-on-year to nearly 5.5 million tons for the first ten months of 2024. The market witnessed fresh buying, with open interest increasing by 2.11% to 2,855 contracts as prices gained Rs.1.15. Aluminium has immediate support at Rs.245.4, with further downside potential to Rs.244.4. Resistance is seen at Rs.247.2, and a breakout above this level could push prices toward  Rs.248.

Trading Ideas:

* Aluminium trading range for the day is 244.4-248.

* Aluminium gains on concern over sliding stocks in LME, which have dropped 45% since May last year.

* Cancelled warrants at nearly 60% suggest more aluminium will leave LME warehouses over coming days and weeks.

* Worries about tight supplies on the LME system have narrowed the discount for the cash aluminium over the three-month contract to about $13 a ton.

CottonCandy

CottonCandy prices declined marginally by -0.09%, settling at Rs.54,650, pressured by expectations of higher global cotton production in CY 2024-25. Global production is forecasted to rise by 1.2 million bales to 117.4 million bales, supported by increases in India and Argentina. However, India’s northern cotton-producing states - Punjab, Haryana, and Rajasthan - witnessed a 43% drop in kapas arrivals until November 30, 2024, compared to the same period last year. This has created raw material shortages for ginners and spinners, particularly in Punjab, even as farmers hold back supplies, anticipating higher prices. The Cotton Association of India (CAI) has maintained its cotton consumption estimate for 2024-25 at 313 lakh bales and pressing estimates at 302.25 lakh bales. Imports are projected to rise to 25 lakh bales, a significant increase from the 15.20 lakh bales in the previous season. As of November 30, approximately 9 lakh bales have arrived at Indian ports. The closing stock for September 30, 2025, is estimated at 26.44 lakh bales, down from 30.19 lakh bales last year. Globally, U.S. cotton production is revised upward to 14.3 million bales, while world production is estimated to increase by 1.2 million bales due to higher outputs in India, Argentina, and Brazil. Consumption is raised by 570,000 bales, driven by increases in India, Pakistan, and Vietnam. The market saw fresh selling, with open interest rising by 0.47% to 426 contracts while prices fell Rs.50. Support is seen at Rs.54,040, with a potential test of Rs.53,420 on further downside. Resistance is likely at Rs.55,640, and a break above this level could push prices to Rs.56,620.

Trading Ideas:

* Cottoncandy trading range for the day is 53420-56620.

* 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 25935.7 Rupees dropped by -0.18 percent.

Turmeric

Turmeric prices dropped significantly by 4.43% to settle at Rs.14,500, pressured by the onset of harvesting in Karnataka and Andhra Pradesh, with Telangana expected to follow after Makar Sankranti. While concerns remain over slow rhizome growth and low yield estimates, the anticipated increase in supply with the new crop post-Makar Sankranti is likely to influence market trends further. Farmers have noted potential lower yields, and close monitoring of the harvesting progress is essential. In the domestic market, supply has drastically reduced in the Erode and Warangal lines, and delivery delays in the futures market highlight supply-side tightness. Despite this, new turmeric stocks are expected only after April, and unfavorable weather, exacerbated by El Niño effects, may continue to challenge production across North and South India. Additionally, international turmeric prices remain high, supported by robust domestic consumption. India produced approximately 68–70 lakh bags of turmeric last year against a consumption of 128 lakh bags, leaving no old stock by the time the new crop arrives. Turmeric exports also remain strong, with a 6.57% rise to 108,879.96 tonnes from April to October 2024 compared to the same period in 2023. October exports were up 57.22% year-on-year, reflecting sustained demand in global markets. Technically, the market is under long liquidation, with open interest declining by 1.13% to 11,400 contracts. Immediate support is seen at Rs.14,116, with further downside potential to Rs.13,734. Resistance is likely at Rs.15,180, and a breakout above this level could test Rs.15,862. Traders should watch these levels for short-term opportunities.

Trading Ideas:

* Turmeric trading range for the day is 13734-15862.

* Turmeric dropped as harvesting has commenced in Karnataka and Andhra Pradesh.

* Although concerns over slow growth of rhizomes and low yield estimates persist.

* With the arrival of new crop likely to increase after Makar Sankranti, supply is expected to increase.

* In Nizamabad, a major spot market, the price ended at 14123.35 Rupees dropped by -0.54 percent.

Jeera

Jeera prices fell by -3.41% yesterday, settling at Rs.22,535, due to subdued demand and adequate availability of stock. Farmers currently hold approximately 20 lakh bags of cumin, with only 3-4 lakh bags likely to be traded by the end of the season. This will leave a carry-forward stock of around 16 lakh bags, pressuring prices despite stable production. India’s cumin production for 2023-24 rose to 8.6 lakh tonnes, significantly higher than the previous year’s 5.77 lakh tonnes, supported by improved crop conditions and increased sowing. Globally, India remains the most competitive source for cumin, with prices at $3,050 per tonne, significantly cheaper than Chinese cumin, which is $200-250 higher. This has bolstered export demand, particularly from countries like China, Europe, and regions affected by Middle Eastern tensions. Export data highlights strong growth, with shipments rising 77.37% during April-October 2024 to 135,450.64 tonnes compared to 76,367.90 tonnes in the same period last year. October exports showed a significant 161.04% increase year-on-year, reaching 16,257.44 tonnes compared to 6,228.01 tonnes in October 2023. Despite strong export figures, the availability of ample carryover stocks and reduced domestic demand have weighed on prices. The market witnessed fresh selling, with open interest rising by 8.2% to 2,415 contracts as prices declined by Rs.795. Immediate support is at Rs.22,260, with further downside potential to Rs.21,980. Resistance is at Rs.23,010, and a move above this level could push prices toward Rs.23,480.

Trading Ideas:

* Jeera trading range for the day is 21980-23480.

* Jeera dropped as demand is low and the current export business is being met from the available stock.

* The current season is expected to have similar production levels as last year due to better crop conditions and good sowing.

* Carry-forward stock of about 16 lakh bags is expected at the end of season.

* In Unjha, a major spot market, the price ended at 23992.85 Rupees dropped by -0.4 percent.

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