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Gold

Gold recorded a modest 0.21% increase, closing at 59405, as investors exercised caution in anticipation of the US Federal Reserve's monetary policy decision. Rising energy prices raised concerns about potential inflationary risks, prompting investors to tread carefully. While the Fed is expected to maintain interest rates, market attention is fixed on economic projections and remarks from Fed Chair Jerome Powell to gauge future directions. The forthcoming Bank of England interest rate decision on Thursday is anticipated to mark the final rate hike in the current tightening cycle. Meanwhile, the Bank of Japan is poised to announce its policy decision on Friday, sparking speculations of an earlier-than-expected exit from ultra-easy monetary policies. In a surprising move, China's central bank, the People's Bank of China (PBoC), removed temporary limits on gold imports aimed at stabilizing the renminbi, albeit causing a surge in local gold prices. The record spread between Shanghai and London gold prices hit $121 per ounce, but this gap narrowed to $76 following the PBoC's relaxation of import restrictions. From a technical standpoint, the market saw short covering as open interest dropped by -8.57% to 8237, while prices surged by 123 rupees. Gold's support level is currently at 59195, with the possibility of testing 58985 if breached. On the upside, resistance is expected around 59530, and a breakthrough could lead to prices testing 59655.
Trading Ideas:
* Gold trading range for the day is 58985-59655.
* Gold steadied as investors avoided making big bets ahead of the US Fed’s monetary policy decision
* Investors also await the Bank of England’s interest rate decision on Thursday, where it is expected to deliver its last rate hike
* China lifts gold import limits after yuan recovers, lowering local gold premium

Silver

Silver had a strong performance, gaining 0.91% to settle at 73230, thanks in part to a weaker U.S. dollar ahead of the Federal Reserve's policy meeting. Investors eagerly awaited the central bank's economic forecasts, with expectations of confidence in an economic soft-landing and the possibility of one more rate hike. Economic data revealed that German producer prices experienced a record decline in August, mainly due to the base effect from the previous year's high price levels. The producer price index dropped by 12.6% year-on-year, a significant decline compared to the prior month. Meanwhile, the UK saw an unexpected slowdown in consumer price inflation in August, with the consumer price index rising by 6.7%, the lowest level since February 2022. From a technical perspective, the market saw short covering as open interest decreased by -6.78% to 15571, while prices surged by 661 rupees. Silver now finds support at 72490, potentially testing 71755 if that level is breached. On the upside, resistance is likely at 73640, with a possible test of 74055 if prices move above it.
Trading Ideas:
* Silver trading range for the day is 71755-74055.
* Silver gains as the U.S. dollar eased from a six-month peak
* Housing starts in the US sank 11.3% month-over-month to a seasonally adjusted annualized rate of 1.283 million in August 2023
* The Fed is widely expected to pause on rate hikes in the latest review, the decision of which would be made known on Wednesday

Crude oil

Crude oil experienced a 0.94% decline, closing at 7475, but rebounded slightly after the EIA report revealed a 2.135 million barrel drop in US crude inventories, aligning with market expectations. The API report had indicated a more significant 5.25 million barrel decrease. Notably, US oil production from key shale regions is set to decrease for the third consecutive month in October, hitting 9.393 million barrels per day, the lowest level since May. Additionally, Russia is contemplating imposing export duties of $250 per metric ton on all oil products from October 1 to June 2024 to combat fuel shortages. The EIA Petroleum Status Report indicated a 2.135 million barrel decrease in US crude oil inventories for the week ending September 15, 2023, close to the anticipated 2.2 million draw. Gasoline stocks fell by 831 thousand barrels, while distillate stockpiles, including diesel and heating oil, dropped by 2.867 million barrels, contrary to expectations. From a technical standpoint, open interest decreased by -6.58% to 7364, while prices fell by -71 rupees. Crude oil's support level now stands at 7399, potentially testing 7324 if it is breached. Resistance is likely at 7554, with the possibility of prices testing 7634 if they surpass this level.
Trading Ideas:
* Crudeoil trading range for the day is 7324-7634.
* Crude oil recovered from lows after the EIA report showed that US crude inventories fell.
* US crude oil inventories fell by 2.135 million barrels - EIA
* The API report pointed for a bigger 5.25 million barrels decline.

Natural gas

Natural gas faced a significant drop of -4.22%, settling at 227. This decline was attributed to reduced gas flow to the nation's LNG export facilities, notably due to the temporary shutdown of the Cove Point LNG export plant in Maryland. Forecasts also indicated milder weather conditions and lower gas demand for the next two weeks, dampening market sentiment. Over the past few days, daily output was on course to decrease by approximately 1.9 billion cubic feet per day (bcfd), reaching a preliminary six-week low of 100.8 bcfd. Bank of America noted that despite a Texas heatwave nearly halving the US natural gas storage surplus, the possibility of a mild winter could lead to record-high gas stocks and potentially push prices below $2 per million British thermal units (mmBtu) in Q1 2024. This trajectory poses downside risks to the bank's 2024 projection of $4 per mmBtu. The Energy Information Administration (EIA) reported that US production was expected to rise from 98.1 bcfd in 2022 to 102.7 bcfd in 2023 and 104.9 bcfd in 2024. However, despite soaring temperatures in Texas boosting power demand and briefly increasing natural gas prices in August, the overall pressure on prices persisted due to rising output. From a technical perspective, the market witnessed long liquidation, with open interest dropping by -14.32% to 19114, while prices fell by -10 rupees. Natural gas now finds support at 224, potentially testing 221 if this level is breached. On the upside, resistance is likely at 231, with the possibility of prices testing 235 upon surpassing it.
Trading Ideas:
* Naturalgas trading range for the day is 221-235.
* Natural gas fell as the amount of gas flowing to the nation's LNG export plants declined
* Output over the past few days was on track to drop by around 1.9 bcfd to a preliminary six-week low of 100.8 bcfd on Wednesday.
* Mild winter could push natgas prices below $2/mmbtu in Q1 of 2024, says BofA


Copper 

Copper had a marginal gain of 0.02%, settling at 727.2, driven by improved demand prospects in China. This positive sentiment overshadowed concerns about China's overall consumption and its troubled property sector. Copper inventories in LME-registered warehouses have been steadily increasing since mid-July, reaching their highest level since May 2022 at 155,700 tons, with recent deliveries to New Orleans contributing to this rise. While it's typical for copper inventory to rise during the northern hemisphere summer holidays, this year's increase is notable, driven in part by manufacturing challenges in Europe and the United States. Additionally, a significant drop in LME time-spreads suggests more copper may be heading to exchange warehouses. Since mid-July, almost 100,000 metric tons of copper have been warranted in LME warehouses, significantly boosting headline stocks, which were at just 54,225 metric tons on July 12. Copper shipments have been diverse, going to various delivery locations in Asia, Europe, and the United States. From a technical perspective, the market saw short covering, as open interest dropped by -10.26% to 3462, while prices increased by 0.15 rupees. Copper's support level is at 724.8, with the possibility of testing 722.3 if it falls below. On the upside, resistance is likely at 730.1, and prices could test 732.9 if they break above it.
Trading Ideas:
* Copper trading range for the day is 722.3-732.9.
* Copper rose with more upbeat demand prospects from China.
* LME inventories have been rising since mid-July, are at the highest since May 2022 at 155,700 tons
* Visible exchange inventory in China amounts to a modest 99,000 metric tons with bonded warehouse stocks at a lowly 43,000 metric tons.

Zinc

Zinc had a solid gain of 1.06%, settling at 224, thanks to an improved demand outlook driven by expectations of additional stimulus measures in China. The hope for economic revival in China, the world's largest zinc consumer, played a significant role in boosting zinc prices. Recent data showed China imported 76,800 metric tons of zinc in July, the highest monthly total since April 2019, signaling a renewed appetite for the metal. Despite increased domestic production of refined zinc in China, the Shanghai market still grapples with declining inventory levels and constrained time spreads. Additionally, there are clear signs of ongoing supply challenges, particularly among small and medium-sized zinc mines in Europe and Australia. Many of these mines are struggling with profitability due to high operating costs and falling zinc prices. For instance, Almina-Minas do Alentejo in Aljustrel suspended its zinc mining operations until the second quarter of 2025 due to low zinc prices. The discount on near-term zinc delivery compared to the three-month contract on the London Metal Exchange (LME) is at its highest level since March 2021, suggesting an abundance of immediate supply. Zinc, primarily used for galvanizing steel, has seen its stocks in Shanghai Futures Exchange-monitored warehouses double this year, reaching 46,579 tons. From a technical perspective, the market witnessed short covering as open interest dropped by -4.65% to 3425, while prices rose by 2.35 rupees. Zinc's support level is currently at 221.2, with the possibility of testing 218.3 if it falls below. On the upside, resistance is likely at 226, and prices could test 227.9 if they break above it.
Trading Ideas:
* Zinc trading range for the day is 218.3-227.9.
* Zinc rises on China's stimulus hopes, boosting demand outlook
* Zinc stocks in LME warehouses, have been falling to 115,350 tons, the lowest since Aug. 14.
* China took in 76,800 metric tons of metal in July, the highest monthly tally since April 2019, indicating renewed appetite.


Aluminium 

Aluminium had a solid gain of 0.69%, settling at 204.45, as supply pressures took center stage amid signs of rising demand. China, the world's leading aluminium producer, decided to halt capacity expansion beyond its current limit of 45 million tons to prevent oversupply and curb energy consumption from outdated, inefficient infrastructure. Additionally, Indonesia's ban on bauxite exports, a key aluminium ore, posed further supply constraints. On the demand side, the outlook appeared positive as increased use of aluminium in solar panels and electric vehicles in China offset reduced usage in construction, indicating a rebound in purchasing activity. In August, global primary aluminium production increased by 2.4% compared to the previous year, according to the International Aluminium Institute (IAI). China's aluminium imports also surged by 38.9% in August, driven by low domestic stocks and promising demand prospects. From a technical perspective, open interest dropped by -7.59% to 2689, while prices rose by 1.4 rupees. Aluminium finds support at 203.2, with potential testing of 201.9 if this level is breached. On the upside, resistance is expected at 205.2, with the possibility of prices testing 205.9 upon surpassing it.
Trading Ideas:
* Aluminium trading range for the day is 201.9-205.9.
* Aluminium gains as supply pressures magnified signs of higher demand.
* China halted the expansion of production capacity beyond the current limit of 45 million tons
* Global aluminium output rises 2.4% year on year in August – IAI

Cottoncandy

Cottoncandy dipped by -0.16% to settle at 61060 due to profit booking, mainly driven by concerns about demand from China, a significant buyer of cotton. The latest U.S. cotton projections for 2023/24 show higher beginning stocks but lower production, exports, and ending stocks. In-transit stocks for July 31, 2023, turned out to be higher than estimated, contributing to increased beginning stocks for 2022/23. U.S. cotton production for 2023/24 is down by 860,000 bales, with the Southeast and Southwest regions leading the decline. Consumption projections remain the same as in August, but exports are down by 200,000 bales, leading to 100,000 bales lower ending stocks. The season-average price for upland cotton in 2023/24 is projected at 80 cents per pound, up 1 cent from the previous month. On a global scale, the 2023/24 cotton projections indicate lower beginning stocks, production, consumption, trade, and ending stocks compared to the previous month's estimates. India has witnessed a drop in cotton sowing by 3.65 lakh hectares compared to the previous year due to poor monsoon conditions in Gujarat and other factors like mill closures and low stock of old cotton crops. The new cotton crop has started arriving in parts of North and South India, with prices currently above the minimum support price (MSP). Cotton picking is expected to gain momentum in Telangana in the coming weeks. The government expects normal rainfall and an increase in cotton crop area for 2023-24. In the Rajkot spot market, cotton prices ended at 29418.9 Rupees, down by -0.29 percent. From a technical standpoint, the market saw fresh selling, with open interest increasing by 3.13% to 99, while prices fell by -100 rupees. Support for Cottoncandy is at 60980, with the possibility of testing 60890 if it falls below. Resistance is likely at 61180, and prices could test 61290 if they break above it.
Trading Ideas:
* Cottoncandy trading range for the day is 60890-61290.
* Cotton dropped on profit booking amid demand concerns from the top buyer China.
* However, heavy rainfall in China's Xinjiang region is expected to impact cotton quality and quantity.
* China's cotton production was lowered to 5.9 million metric tons on reduced planted area for 2023/24
* In Rajkot, a major spot market, the price ended at 29418.9 Rupees dropped by -0.29 percent.

Turmeric

Turmeric prices saw a significant -4.12% drop, settling at 14978, driven by profit booking and sluggish export demand in India. However, there are factors that could influence future price trends. Supplies of turmeric are limited, and production prospects appear dim due to a decrease in the turmeric cultivation area in Maharashtra. This could prevent a steep decline in prices. Additionally, the upcoming week is expected to bring normal to above-normal rainfall to Maharashtra and Telangana, which could boost turmeric crop growth. Despite these positive developments, export inquiries remain subdued, putting pressure on prices. Farmers have shifted their focus, leading to expectations of a 20-25% decrease in turmeric cultivation this year, especially in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Turmeric exports increased by 16.87% during Apr-Jun 2023 compared to the same period in 2022. India's agriculture sector received much-needed relief as the monsoon picked up pace after a historically dry August. In the Nizamabad spot market, turmeric prices ended at 13719.35 Rupees, gaining 0.73%. From a technical perspective, the market witnessed long liquidation, with a -2.22% drop in open interest and prices falling by -644 rupees. Turmeric's support level is at 14544, with the potential to test 14108, while resistance is expected at 15558, with a possibility of prices reaching 16136.
Trading Ideas:
* Turmeric trading range for the day is 14108-16136.
* Turmeric dropped on profit booking as sluggish export demand is still a major concern for Indian traders.
* Supplies are down whereas production prospects are also looking bleak
* The upcoming week is expected to bring normal to above-normal rainfall to Maharashtra and Telangana
* In Nizamabad, a major spot market, the price ended at 13719.35 Rupees gained by 0.73 percent.

Jeera

Jeera prices in India saw a modest increase of 0.23%, closing at 60180, mainly due to shrinking supplies in the local market. The rise in prices can be attributed to increased festive demand and limited availability of quality crops, prompting millers to purchase on price dips. However, while Indian jeera prices remain competitive in the global market, overseas demand has been subdued. China, a major buyer of Indian jeera, has reduced its purchases in recent months, impacting overall exports from India. There is uncertainty regarding whether China will resume purchasing Indian cumin in October-November before the arrival of new cumin crops. Additionally, the dry weather conditions in Gujarat are expected to lead to a rise in arrivals, which could limit further upward price movement. According to FISS forecasts, cumin demand is predicted to exceed supply this year. Jeera exports during Apr-Jun 2023 increased by 13.16% compared to the same period in 2022. However, there was a significant drop in exports in June 2023 compared to May 2023 and June 2022. From a technical perspective, the market witnessed short covering, with a -0.56% drop in open interest and prices rising by 140 rupees. Jeera has support at 59360 and could test 58530 if it falls below, while resistance is expected at 60910, with a possibility of prices reaching 61630.
Trading Ideas:
* Jeera trading range for the day is 58530-61630.
* Jeera prices rose due to shrinking supplies in the local market.
* Increased festive demand and limited availability of quality crops in the market is prompting miller to buy
* However, sluggish export demand is still a major concern for Indian traders
* In Unjha, a major spot market, the price ended at 60427.1 Rupees gained by 0.35 percent.