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Gold:

Gold demonstrated resilience in the face of geopolitical tensions, settling up by 0.13% at 62447 amid the escalating Middle East crisis. The catalyst for this upward movement was the pledge by US President Joe Biden to retaliate against unmanned aerial drone attacks on US service personnel near northeastern Jordan, near the Syrian border. This geopolitical uncertainty has traditionally driven investors towards safe-haven assets like gold. However, the precious metal's future trajectory appears uncertain as investors eagerly await the Federal Reserve's (Fed) interest rate decision, scheduled for Wednesday. The Fed to maintain interest rates in the 5.25%-5.50% range, citing consistently easing price pressures. The focus will be on the timing of the potential commencement of a rate-cut campaign, with the Fed remaining cautious about the sustainable return of underlying inflation to the 2% target. Swiss gold exports saw a marginal decline in December compared to November, attributed to lower shipments to India and elevated prices. Switzerland, a key bullion refining and transit hub, plays a crucial role in the global gold market. India and China, the largest consumer markets, are highly sensitive to seasonal demand and gold price fluctuations. Looking ahead, the approach of China's Lunar New Year celebrations in February may trigger a buying spree, while Indian jewellers anticipate potential changes in import duties for gold bars following the federal budget review on February 1. From a technical perspective, the gold market is currently experiencing fresh buying momentum, evident in a 7.75% gain in open interest, settling at 14621. Prices have increased by 80 rupees. Gold finds support at 62260, with the possibility of testing 62075 levels on the downside. On the upside, resistance is expected at 62705, and a breakthrough could lead to a test of 62965 levels.

Trading Ideas:

* Gold trading range for the day is 62075-62965.

* Gold price jumps further on deepening Middle East tensions.

* Investors brace for Fed policy decision and US labor and Manufacturing PMI data.

* Fed’s outlook on interest rates will be in focus

Silver:

Silver experienced a slight dip of -0.05%, settling at 72342, as investors awaited updates on the U.S. Federal Reserve's policy meeting, particularly regarding the timing of potential interest rate cuts. The geopolitical landscape added to the precious metal's appeal as US President Joe Biden promised retaliation for attacks on US forces near north-eastern Jordan, even as Iran denied involvement in the aerial drone strikes. This escalation in tensions increased the attractiveness of safe-haven assets, while riskier assets faced headwinds. On the economic front, the JOLTS report unexpectedly revealed a rise in job openings to 9 million, reflecting positive signs in the labor market. Additionally, the CB consumer confidence index reached its highest level since the end of 2021, indicating optimism among consumers. Despite these positive indicators, the Federal Reserve is anticipated to maintain interest rates in the range of 5.25%-5.50% for the fourth consecutive time, driven by consistently declining price pressures. However, policymakers remain cautious about the sustainability of inflation returning to the 2% target. Looking at the silver market's fundamentals, global silver demand is projected to increase by 1%, driven by the strength of industrial end-uses and a recovery in jewelry and silverware demand. Silver industrial fabrication is forecasted to rise by 4% in 2024, reaching a record 690 million ounces. Concurrently, total global silver supply is expected to grow by 3% in 2024, reaching an eight-year high of 1.02 billion ounces, primarily fueled by a recovery in mine output. From a technical standpoint, the silver market is currently undergoing long liquidation, evidenced by a -0.8% drop in open interest to settle at 23182. Prices have decreased by -35 rupees. Silver finds support at 72005, with a potential test of 71670 levels on the downside. On the upside, resistance is anticipated at 72690, and a breakthrough could lead to a test of 73040 levels.

Trading Ideas:

* Silver trading range for the day is 71670-73040.

* Silver steadied as investors await updates on the timing of interest rate cuts from Fed.

* Geopolitical tensions have increased the appeal for safe-haven assets.

* Job openings unexpectedly rose to 9 million, while consumer confidence reached its highest level since the end of 2021.

Crude oil:

Crude oil exhibited strength, settling up by 1.23% at 6478, following the International Monetary Fund's optimistic growth forecast for the global economy in 2024. However, concerns over demand arose due to the deepening real estate crisis in China, particularly with the liquidation order issued for property giant China Evergrande Group by a Hong Kong court. This development fueled apprehensions about the impact on the world's largest crude consumer. On the supply side, Iran's crude oil exports were reported to be in the range of 1.2 million to 1.6 million barrels per day (bpd) throughout most of 2023, representing a significant portion (1-1.5%) of the global oil supply. Meanwhile, the upcoming OPEC+ meeting on Feb. 1 is not expected to bring a decision on the group's oil policy for April. In a noteworthy indication of future demand outlook, Saudi Aramco received a directive from the Saudi energy ministry to maintain its maximum sustainable capacity at 12 million bpd, rather than increasing it to 13 million bpd. U.S. crude oil stockpiles experienced a substantial decline of 9.2 million barrels to 420.7 million barrels in the week ending Jan. 19, according to the Energy Information Administration (EIA). This draw surpassed expectations for a 2.1 million-barrel decrease, driven by a sharp drop in U.S. crude imports by 1.2 million bpd. The adverse winter weather conditions impacted crude production, imports, refining, and fuel demand. From a technical standpoint, the crude oil market is witnessing fresh buying momentum, with a 0.54% increase in open interest to settle at 8704. Prices have risen by 79 rupees. Crude oil finds support at 6364, with the potential for a test of 6250 levels on the downside. On the upside, resistance is expected at 6541, and a breakthrough could lead to a test of 6604 levels.

Trading Ideas:

* Crudeoil trading range for the day is 6250-6604.

* Crude oil rose after IMF raising its growth forecast for the global economic in 2024.

* Continuing conflict in the Middle East, however, prevented further losses.

* The OPEC+ meeting in February was not expected to make a decision on oil policy for April
 

Natural gas:

Natural gas faced a decline of -0.34%, settling at 173.9, as the lower-priced March contract took the front seat and weather forecasts predicted milder conditions, reducing heating demand over the next two weeks. This shift, coupled with ongoing issues like the Freeport LNG's export plant liquefaction unit outage in Texas, contributed to the subdued sentiment in the market. The Freeport LNG outage had a notable impact on U.S. industrial demand for gas, as it kept more gas within the country, coinciding with a period of rising U.S. output. The Lower 48 states' gas output averaged 103.7 billion cubic feet per day (bcfd) in January, down from the record high of 108.0 bcfd in December. Despite the monthly decline, daily gas output was poised to surge to a preliminary three-week high of 107.1 bcfd on Monday, contributing to a rebound from the 12-month low of 90.5 bcfd on Jan. 16, attributed to freeze-offs and cold weather events. However, meteorological projections indicate that temperatures in the Lower 48 states are expected to remain warmer than normal until at least Feb. 14. This forecast, along with the ongoing recovery in gas output, suggests a continued surplus in supply compared to demand. From a technical perspective, the natural gas market is undergoing fresh selling, evident in a 7.46% increase in open interest, settling at 65232. Prices have experienced a marginal decline of -0.6 rupees. Natural gas finds support at 171.2, with the potential for a test of 168.5 levels on the downside. On the upside, resistance is expected at 177, and a breakthrough could lead to a test of 180.1 levels.

Trading Ideas:

* Naturalgas trading range for the day is 168.5-180.1.

* Natural gas dropped due forecasts are predicting milder weather and lower heating demand.

* U.S. industrial demand for gas is depressed, partly due to an ongoing outage at Freeport LNG's export plant in Texas.

* The Freeport outage has resulted in more gas remaining in the country, despite rising U.S. gas output.

Copper:

Copper closed higher by 0.38% at 734.75, buoyed by expectations of additional measures from China to stabilize its economy and stock markets. However, gains were tempered by weak demand. The recent liquidation order for debt-laden developer China Evergrande intensified concerns about the downturn in China's real estate sector, impacting investor confidence. Despite these challenges, copper prices found support from worries over supply disruptions in mines, prompting to revise their forecasts from surpluses to deficits for the current year. The Yangshan premium, an indicator of Chinese demand for imported copper, has witnessed a 50% decline since early December, reflecting the weakening appetite for the metal in China. The ongoing concerns over long-term supply failing to meet the demands of copper's crucial role in electrification further supported prices. The International Copper Study Group (ICSG) reported a 119,000 metric tons deficit in the global refined copper market for November, a significant increase from the 48,000 metric tons deficit in October. November's world refined copper output was 2.26 million metric tons, while consumption reached 2.38 million metric tons. When accounting for changes in inventory in Chinese bonded warehouses, there was a 128,000 metric tons deficit in November, up from a 70,000 metric tons deficit in October, as per the ICSG's monthly bulletin. From a technical standpoint, the copper market is witnessing fresh buying, with a 1.06% increase in open interest, settling at 4692. Prices have risen by 2.8 rupees. Copper finds support at 731.5, with the potential for a test of 728.2 levels on the downside. On the upside, resistance is expected at 736.6, and a breakthrough could lead to a test of 738.4 levels.

Trading Ideas:

* Copper trading range for the day is 728.2-738.4.

* Copper gains due to hopes of China implementing measures to stabilize its economy.

* Mine disruptions have led to concerns over copper supply

* The Yangshan premium, which reflects Chinese demand for imported copper, has dropped by 50% since early December
 

Zinc:

Zinc closed with a modest gain of 0.22%, settling at 227.65, supported by positive sentiment regarding Chinese policy support following a seasonal lull. The metal's upward trajectory was further bolstered by a reduction in bank reserves in China, aimed at injecting approximately $140 billion into the banking system. The move comes as part of broader efforts by China's central bank and cabinet to stabilize market confidence, pledging more effective measures, including increased medium- and long-term fund injections in the capital market. The International Lead and Zinc Study Group (ILZSG) reported an expanded global zinc market deficit, growing to 71,600 metric tons in November 2023 from the October deficit of 62,500 tons. However, the data also revealed a surplus of 211,000 tons for the first 11 months of 2023, compared to a deficit of 86,000 tons in the same period of 2022. In terms of China's zinc production, December 2023 saw refined zinc output of 590,900 metric tons, a 2.05% month-on-month increase and a robust year-on-year growth of 12.38%. The cumulative refined zinc output for the entire year reached 6.622 million metric tons, marking a substantial year-on-year increase of 10.77%. Additionally, domestic zinc alloy production in December amounted to 102,900 metric tons, reflecting a month-on-month increase of 9,600 metric tons. From a technical perspective, the zinc market is experiencing short-covering, with a -1.7% drop in open interest, settling at 3232. Prices have increased by 0.5 rupees. Zinc finds support at 226.1, with the potential for a test of 224.4 levels on the downside. On the upside, resistance is expected at 229.6, and a breakthrough could lead to a test of 231.4 levels.

Trading Ideas:

* Zinc trading range for the day is 224.4-231.4.

* Zinc gains supported by optimism about Chinese policy support after a seasonal lull.

* China's cabinet pledges to stabilize market confidence

* Global zinc market deficit increased in November 2023

Aluminium:

Aluminium closed with a gain of 0.47% at 205.1, spurred by robust market sentiment driven by real estate support policies and the relaxation of purchase restrictions in Guangzhou. These measures significantly boosted confidence in the aluminium market. However, the global landscape for aluminium saw a decline in Japan's imports of primary aluminium by 26% to 1.03 million metric tons in 2023. This dip was attributed to sluggish demand in the construction and manufacturing industries. The import figure for 2023 is the lowest since at least 1986, according to data from the Japanese finance ministry and the Japan Aluminium Association (JAA), even falling below the levels observed in 2020 during the COVID-19 pandemic. On the production side, a survey by the Aluminium Institute indicated that world alumina production in December 2023 reached 12.298 million tonnes, bringing the total annual output to 141.924 million tonnes, slightly down from 142.23 million tonnes in 2022. Notably, the robust alumina production in the second half of 2023 showcased a significant increase of 5.02% from the first half of the year, indicating resilience in the aluminium supply chain. A report from the World Bureau of Metal Statistics (WBMS) highlighted that global primary aluminium production in November 2023 was 5.8613 million tons, while consumption reached 5.9714 million tons, resulting in a supply shortage of approximately 80,000 tons. From a technical perspective, the aluminium market is currently witnessing short-covering, with a -1.45% drop in open interest, settling at 3658. Prices have increased by 0.95 rupees. Aluminium finds support at 204, with the potential for a test of 203 levels on the downside. On the upside, resistance is expected at 205.7, and a breakthrough could lead to a test of 206.4 levels.

Trading Ideas:

* Aluminium trading range for the day is 203-206.4.

* Aluminium gains due to China’s real estate support policies

* Japan aluminium imports falls 26% in 2023 amid slow demand

* World alumina production in December 2023 stood at 12.298 million tonnes

Cotton candy:

Cotton faced a decline of -0.42%, settling at 57380, influenced by changes in global consumption and production forecasts. World consumption for the 2023/24 season is projected to be 1.3 million bales lower than the previous month's estimates, with reductions for countries including India, Indonesia, Pakistan, Uzbekistan, and Turkey. However, ending stocks are forecast to be 2.0 million bales higher, driven by increased beginning stocks and production along with lower consumption. The Cotton Association of India (CAI) maintained its estimate for domestic consumption at 311 lakh bales for the 2023-24 season, while beginning stocks increased due to lower consumption in Uzbekistan. Brazil achieved a historic high in cotton production for the 2022-23 season, attributed to expanded cultivation and productivity. Despite the rise in global supply, sluggish demand, influenced by challenging economic conditions, resulted in bloated inventories and reduced cotton prices worldwide. Reports indicate a decline in pink bollworm infestation in the cotton crop in India. The infestation has dropped from 30.62% during 2017-18 to 10.80% in 2022-23. This reduction is a positive development for cotton growers in various regions. The International Cotton Advisory Committee (ICAC) projected that global cotton production is expected to outpace consumption for the second consecutive year. Global cotton lint production is forecasted to grow by 3.25% year-on-year to 25.4 million metric tons in the 2023-2024 season, while consumption is expected to marginally decline to 23.4 million metric tons. In the Rajkot spot market, the cotton price ended at 26518.6 Rupees, reflecting a drop of -0.55%. Technically, the cotton market is undergoing fresh selling, with a 2.54% gain in open interest, settling at 283. Prices have decreased by -240 rupees. Cotton finds support at 57260, with the potential for a test of 57150 levels on the downside. On the upside, resistance is expected at 57540, and a breakthrough could lead to a test of 57710 levels.

Trading Ideas:

* Cottoncandy trading range for the day is 57150-57710.

* Cotton dropped as world consumption is forecast 1.3 million bales lower than last month

* World 2023/24 ending stocks are forecast 2.0 million bales higher this month driven by higher beginning stocks.

*9 World production is 260,000 bales higher with China’s crop up 500,000 bales and Argentina’s production higher as well

*In Rajkot, a major spot market, the price ended at 26518.6 Rupees dropped by -0.55 percent.*

Turmeric:

Turmeric witnessed a decline of -1.51%, settling at 14830, as buying activities slowed down in anticipation of stock releases ahead of the commencement of new crops. Pressure on prices was also observed due to improved crop conditions resulting from favorable weather. However, the downside is limited by weaker production prospects and tighter stocks in the market. Support is evident for improved export opportunities. Concerns among farmers in Maharashtra were sparked by Prime Minister Modi's Turmeric Board in Telangana, specifically regarding the headquarters' location. Crop conditions are satisfactory, and the harvest is expected to be ready from January to March. Current levels of buying activity and decreasing supplies are expected to sustain price stability. The demand for turmeric has increased in both developed and emerging nations, leading to a 25% rise in exports. Expectations of a 20–25% decline in turmeric seeding this year, particularly in areas like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, reflect farmers' shifting priorities. Turmeric exports during Apr-Nov 2023 dropped by 1.07%, reaching 1,10,745.38 tonnes compared to the same period in 2022. In November 2023, around 8,582.44 tonnes of turmeric were exported, showing a fall of 15.34% compared to October 2023 and a drop of 30.78% compared to November 2022. Turmeric imports during Apr-Nov 2023 declined by 29.50%, reaching 9,384.42 tonnes compared to the same period in 2022. In November 2023, around 1,305.24 tonnes of turmeric were imported, showing a drop of 48.82% compared to October 2023 and a decrease of 12.99% compared to November 2022. Technically, the turmeric market is under long liquidation, with a drop in open interest by -1.3%, settling at 12185, while prices have decreased by -228 rupees. Turmeric finds support at 14420, with the potential for a test of 14012 levels on the downside. On the upside, resistance is expected at 15088, and a breakthrough could lead to a test of 15348 levels.

Trading Ideas:

* Turmeric trading range for the day is 14012-15348.

* Turmeric dropped as buying activities has been slower

* Pressure also seen amid expectation of release of stocks ahead of commencement of new crops.

* Prices also dropped amid Improved crop condition due to favorable weather condition.

* In Nizamabad, a major spot market, the price ended at 13805.55 Rupees dropped by -0.65 percent.

Jeera:

Jeera prices rebounded, rising by 1.92% to settle at 26745, driven by short covering after a previous drop attributed to higher production prospects in Gujarat and Rajasthan. The current rabi season sees jeera acreage reaching a four-year high, with expanded cultivation in key producing states. In Gujarat, jeera cultivation covers 5.60 lakh hectares, marking a substantial 160% increase from the previous year, while Rajasthan experiences a 25% increase, reaching 6.90 lakh hectares. Record prices in the last marketing season encouraged farmers to significantly increase the cultivation area, showcasing a strong correlation between market prices and acreage.  Global demand for Indian jeera has slumped as buyers prefer other destinations like Syria and Turkey due to higher prices in India. Export challenges include lower water availability, fewer cold days, and concerns about fusarium wilt attacks on crops. While India anticipates a potentially bumper crop, other major jeera-producing countries like China, Egypt, and Syria expect higher yields, impacting the global market. Jeera exports during Apr-Nov 2023 dropped by 33.10%, reaching 84,467.16 tonnes compared to the same period in 2022. In November 2023, around 8,099.26 tonnes of jeera were exported, showing a rise of 30.04% compared to October 2023 but a drop of 22.89% compared to November 2022. Jeera imports during Apr-Nov 2023 declined by 1,134.63%, reaching 16,330.89 tonnes compared to the same period in 2022. In November 2023, around 832.64 tonnes of jeera were imported, showing a drop of 81.18% compared to October 2023 but a significant rise of 1,426.38% compared to November 2022. Technically, the jeera market is under fresh buying, with a gain in open interest by 2.76% to settle at 2007, while prices have increased by 505 rupees. Jeera finds support at 26150, with the potential for a test of 25560 levels on the downside. On the upside, resistance is expected at 27190, and a breakthrough could lead to a test of 27640 levels.

Trading Ideas:

* Jeera trading range for the day is 25560-27640.

* Jeera gained on short covering after prices dropped due to higher production prospects

* In Gujarat, Cumin sowing witnessed very strong growth by nearly 103% with 530,030.00 hectares against sown area of 2022

* Stockists are showing interest in buying on recent downfall in prices triggering short covering.

* In Unjha, a major spot market, the price ended at 31761.05 Rupees dropped by -0.07 percent.
 

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