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Gold

Gold prices declined by 0.89%, settling at ?71,194, as the U.S. dollar strengthened and investors adjusted their positions ahead of Federal Reserve Chair Jerome Powell's speech, which is expected to provide guidance on the anticipated rate cut in September. The dollar index recovered slightly after the Fed's July 30-31 meeting minutes revealed that officials were inclined toward a rate cut in September if economic conditions warranted it. While the Fed chose to maintain the current interest rate range of 5.25%-5.5% in July, the minutes indicated a growing consensus that a rate cut might be appropriate in the near future, especially given recent improvements in inflation and rising unemployment. Boston Fed President Susan Collins further reinforced this sentiment, suggesting that a rate-cutting cycle could soon begin, citing reductions in inflation and overall healthy labor markets. In the physical gold market, demand remained subdued, with Indian dealers offering discounts up to $3 an ounce over official domestic prices due to higher gold prices dampening retail purchases. This was a shift from the previous week's premium of $9. In China, discounts ranged from $8.5 to $5 per ounce over international spot prices, reflecting a decrease from the previous week's premiums of up to $18. Singapore and Japan also saw varied discounts and premiums, indicating a mixed demand environment across key Asian markets. Technically, the gold market is under long liquidation, as evidenced by a 2.04% drop in open interest, settling at 17,109 contracts while prices fell by ?636. Gold is currently finding support at ?70,765, with a potential test of ?70,335 if this level is breached. On the upside, resistance is expected at ?71,755, and a move above this level could push prices towards ?72,315.
 

Trading Ideas:
* Gold trading range for the day is 70335-72315.
* Gold eased as the dollar rose, with investors anticipating Fed Powell's speech.
* Minutes from the Fed's July 30-31 meeting indicated a strong likelihood of a rate cut next month.
* The meeting indicated that if economic data aligns with expectations, it would be appropriate to ease monetary policy.

Silver

Silver prices fell by 1.33% to settle at 83,736 as the US dollar rebounded and bond yields rose following stronger-than-expected preliminary US S&P Global PMI data for August. The silver market was further pressured by mixed US employment data. Initial Jobless Claims for the week ending August 14 came in at 232,000, slightly higher than the anticipated 230,000, while Continuing Jobless Claims fell to 1.863 million, below both the revised figure of 1.859 million from the previous week and the 1.870 million forecast. These mixed signals reflect ongoing uncertainty in the US labor market. Additionally, the S&P Global US Manufacturing PMI dropped to 48 in August 2024, down from 49.6 in July, marking the sharpest contraction in US factory activity this year and the second consecutive month of decline. This contraction was largely driven by a steep fall in new orders, highlighting the negative impact of restrictive interest rates on manufacturing. Kansas City Fed Bank President Jeff Schmid, known for his hawkish stance, expressed caution regarding the rising unemployment rate, indicating that he would closely monitor upcoming data before deciding on whether to support a rate cut at the Fed's next policy meeting in mid-September. His comments suggest that the central bank's decision could hinge on upcoming labor market and inflation data. Technically, the silver market is experiencing long liquidation, as evidenced by a 4.43% drop in open interest, which settled at 20,296 contracts. Silver is currently supported at 82,990, with a potential test of 82,245 on the downside. On the upside, resistance is expected at 84,835, and a move above this level could push prices towards 85,935.
 

Trading Ideas:
* Silver trading range for the day is 82245-85935.
* Silver dropped due to better-than-projected preliminary US S&P Global PMI data for August.
* US Initial Jobless Claims showed higher-than-expected 232K claims in the week of August 14.
* S&P Global US Manufacturing PMI fell to 48 in August 2024, marking the second consecutive contraction in US factory activity.

Crude oil

Crude oil prices surged by 2.12% to settle at 6,158, bolstered by a significant drop in U.S. fuel inventories, which provided a strong support level. However, concerns over the global demand outlook limited further gains. Market participants are closely monitoring the actions of OPEC and its allies, including Russia, collectively known as OPEC+. There is speculation that OPEC+ may reconsider its plan to gradually unwind output cuts in October, especially if global demand remains uncertain. A recent note from Swiss bank UBS suggested that crude prices could recover to $90 per barrel if OPEC maintains a cautious stance in its upcoming September meeting and if China's economy continues to recover gradually. This highlights a potential policy risk for OPEC, which had previously committed to easing its voluntary production cuts. The bank's analysis suggests that further production cuts might be necessary to sustain current price levels. U.S. crude stocks fell by 4.6 million barrels to 426 million barrels in the week ending August 16, according to the Energy Information Administration (EIA). This decline was larger than the expected 2.7 million-barrel draw. Additionally, crude stocks at the Cushing, Oklahoma delivery hub decreased by 560,000 barrels, while refinery crude runs increased by 222,000 barrels per day. U.S. gasoline stocks also dropped by 1.6 million barrels, and distillate stockpiles fell by 3.3 million barrels, significantly more than expected. Technically, the crude oil market is experiencing short covering, with a 12.77% drop in open interest, settling at 10,134 contracts. Crude oil is currently supported at 6,062, with a potential test at 5,967 on the downside. On the upside, resistance is expected at 6,220, with a move above potentially pushing prices towards 6,283.
 

Trading Ideas:
* Crudeoil trading range for the day is 5967-6283.
* Crude oil gains due to drop in U.S. fuel inventories
* Investors anticipate OPEC+ and its allies reconsidering output cuts in October.
* Swiss bank UBS predicts a recovery to $90 per barrel if OPEC remains cautious.

Natural gas

Natural gas prices fell sharply by 4.64%, closing at ?172.8, driven by a larger-than-expected weekly storage build and forecasts for milder weather over the next two weeks, which could reduce demand for cooling. The market is also responding to strategic moves by major producers like EQT and Coterra Energy, who are scaling back output and delaying projects to better manage the current oversupply. This excess supply is expected to lead to lower consumer prices for natural gas this winter, as stockpiling efforts continue to build inventories. Despite the recent decline, natural gas production in the U.S. remains robust, though it has dipped slightly from recent highs. According to financial firm LSEG, gas output in the Lower 48 states averaged 102.3 billion cubic feet per day (bcfd) in August, down from 103.4 bcfd in July. Gas flows to the seven major U.S. LNG export plants increased to 12.9 bcfd in August, up from 11.9 bcfd in July, reflecting strong export demand. The U.S. Energy Information Administration (EIA) has revised its natural gas output forecast for 2024, expecting a larger decline in production due to record-low prices earlier this year, which led producers to curtail output. The EIA now anticipates production to average 103.3 bcfd in 2024, down from 103.5 bcfd in its previous forecast. Technically, the natural gas market is under long liquidation, as evidenced by a significant 16.02% drop in open interest, settling at 24,279 contracts while prices fell by ?8.4. Natural gas currently finds support at ?167.8, with a potential test of ?162.7 if this level is breached. On the upside, resistance is expected at ?181, and a move above this level could see prices testing ?189.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 162.7-189.1.
* Natural gas dropped due to a larger-than-expected weekly storage build.
* US utilities added 35 billion cubic feet of gas into storage during the week ending August 16, 2024.
* LSEG forecasts average gas demand in the Lower 48, will rise from 103.7 bcfd this week to 103.9 bcfd next week.


Copper

Copper prices fell by 1.27% to settle at 793.95, weighed down by a stronger dollar. However, the losses were limited by falling metal inventories and signs of improving demand. The decline in copper prices was tempered by positive U.S. economic data that eased fears of an imminent recession in the world's largest economy, which could have further dampened demand for industrial metals. On the supply side, a strike at Lundin Mining's Caserones copper mine in Chile has extended for more than a week with no signs of resolution, potentially impacting global copper supply. Copper inventories monitored by the Shanghai Futures Exchange (SHFE) fell by 8.4%, indicating tightening supply in the Chinese market. However, China's refined copper exports in July dropped to 70,006 tons, less than half of the record high seen in June, as export profits declined. Meanwhile, the LME cash copper contract traded at a significant discount to the three-month contract, suggesting an abundant near-term supply. Despite a slight improvement in Chinese physical copper demand over the past few weeks, a robust consumption rebound remains uncertain due to slowing economic growth and challenges in the property sector. The global refined copper market reported a 95,000 metric ton surplus in June, up from a 63,000 metric ton surplus in May, according to the International Copper Study Group (ICSG). World refined copper output in June was 2.31 million metric tons, while consumption was 2.21 million metric tons. Technically, the copper market experienced long liquidation, with open interest dropping by 26.07% to settle at 5,541 contracts. Copper is currently supported at 788.5, with a potential test at 783 on the downside. Resistance is expected at 803.1, and a move above this level could push prices towards 812.2.
 

Trading Ideas:
* Copper trading range for the day is 783-812.2.
* Copper dropped due to a firmer dollar, but falling metal inventories limited losses.
* China exported 70,006 tons of refined copper in July, down from a record high.
* LME cash copper contract traded at a discount, indicating abundant near-term supply.

Zinc

Zinc prices declined by 0.62%, closing at ?265.3, as profit booking took over following a period of gains driven by signs of improving demand in China, the world's largest consumer of zinc. The recent rally was supported by expectations of reduced supply, as major Chinese zinc smelters agreed to adjust maintenance schedules and delay the commissioning of new capacity. This move was prompted by falling treatment charges (TCs), which have squeezed profit margins due to a tight ore supply. In July 2024, China's zinc concentrate imports fell by 4.8% year-on-year to 375,373 tons, underscoring the supply challenges. The global zinc market also showed signs of tightening, with the surplus shrinking to 8,700 metric tons in June from 44,000 tons in May, according to the International Lead and Zinc Study Group (ILZSG). For the first half of 2024, the global surplus stood at 228,000 tons, significantly lower than the 452,000 tons surplus recorded in the same period last year. Chinese refined zinc production was notably lower in July 2024, down by 10.3% month-on-month and 11.15% year-on-year to 489,600 metric tons. Heavy rainfall in Sichuan, along with unexpected production cuts in Yunnan, Guangdong, and Guangxi, contributed to this decline. Additionally, planned maintenance in key regions like Henan and Inner Mongolia further reduced output. Technically, the zinc market is under long liquidation, as evidenced by a sharp 31.19% drop in open interest, settling at 920 contracts while prices dipped by ?1.65. Zinc is currently finding support at ?263.3, with a potential test of ?261.1 if this level is breached. On the upside, resistance is expected at ?268.6, and a move above could see prices testing ?271.7.
 

Trading Ideas:
* Zinc trading range for the day is 261.1-271.7.
* Zinc dropped on profit booking after prices rose as buying spurred by China’s improving demand.
* China's imports of zinc concentrates dropped 4.8% annually in July to 375,373 tons.
* Chinese zinc smelters agree to adjust maintenance plans.


Aluminium

Aluminium prices declined by 0.69% to settle at 224.7, as profit booking took over after a period of price increases driven by concerns over tight supply. However, the market continues to grapple with subdued demand in China and ample supply, fueled by strong domestic production and increased inflows from Russia. China's aluminium exports reached 146,708 tons in July, up 9.6% year-on-year, with the majority directed to Russia. Additionally, China imported 129,898 tons of primary aluminium in the same month, marking an 11.5% increase from the previous year, according to customs data. On the macroeconomic front, U.S. business activity dipped to a four-month low in August, with firms struggling to pass on higher prices to consumers. This suggests that inflation may continue its downward trend in the coming months. The S&P Global U.S. Composite PMI Output Index edged down slightly to 54.1 in August from 54.3 in July, still reflecting healthy business activity. In China, aluminium output in July surged by 6% year-on-year to 3.68 million metric tons, the highest monthly output since 2002, driven by new projects in Inner Mongolia and sustained production in other key regions due to a profitable market. For the first seven months of 2024, China's aluminium production reached 25.19 million tons, up 6.7% from the same period last year. Globally, primary aluminium output rose by 2.4% year-on-year in July, reaching 6.194 million metric tons, with China's production contributing significantly to this increase. Technically, the aluminium market experienced long liquidation, with open interest dropping by 31.93% to settle at 1,614 contracts. Aluminium is currently supported at 222.8, with a potential test at 220.7 on the downside. Resistance is expected at 228.3, and a move above could push prices towards 231.7.
 

Trading Ideas:
* Aluminium trading range for the day is 220.7-231.7.
* Aluminium dropped on profit booking after prices rose spurred by concern over tight supply.
* However, the market was plagued by subdued demand in China and ample supply due to strong domestic production.
* China exported 146,708 tons of alumina last month, up 9.6% from a year earlier.

Cottoncandy

Cottoncandy prices edged up by 0.47%, closing at ?57,470, supported by concerns over reduced acreage and tighter supply projections for the current kharif cropping season. The acreage under cotton has declined by approximately 9% to 110.49 lakh hectares (lh) compared to 121.24 lh in the same period last year. The Cotton Association of India (CAI) estimates that the total acreage will be around 113 lh this year, down from 127 lh the previous year. This decline is primarily attributed to farmers shifting to other crops due to lower yields and higher production costs. The CAI also highlighted a potential tightness in the cotton balance sheet for the upcoming season due to higher-than-expected exports, particularly to Bangladesh, which have surged from 15 lakh bales to 28 lakh bales. India's cotton production and consumption for 2023-24 are both estimated at around 325 lakh bales. With exports at 28 lakh bales and imports at 13 lakh bales, the gap will be filled by drawing from last year's stock. In terms of global cotton production, the 2024/25 balance sheet has seen reductions in production, consumption, and stock levels, largely due to lower output in the United States and India. Global ending stocks are reduced by 5.0 million bales to 77.6 million, reflecting the overall tightness in the market. Technically, the market is under short covering, as indicated by a 0.57% drop in open interest, settling at 175 contracts while prices increased by ?270. Cottoncandy finds support at ?57,390, with a potential test of ?57,320 if this level is breached. On the upside, resistance is expected at ?57,540, and a move above this level could push prices towards ?57,620.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57320-57620.
* Cotton prices gained as Cotton acreage trails by 9% at 110 lh
* CAI predicts acreage to be around 113 lh this year, up from 127 lh in the previous year.
* Global cotton production cut by 2.6 million bales; lower in US, India.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.

Turmeric

Turmeric prices saw a slight increase of 0.08% to settle at 15,180, although the market remains range-bound due to limited demand. Buyers are hesitant to make purchases, and export opportunities are expected to be further complicated by anticipated volatility in Bangladesh. In Indonesia, dry weather has accelerated the turmeric harvest, currently at peak levels, with many farmers selling their turmeric in its wet stage, reducing overall production. This situation, combined with rising acreage and low export demand, could put further downward pressure on prices. However, some support for prices is coming from farmers holding back stocks, anticipating a potential price rise. Turmeric sowing in key regions such as Erode has reportedly doubled compared to last year, and in Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher than the previous year. Last year, turmeric was sown on about 3 to 3.25 lakh hectares across the country, with this year’s sowing estimated to increase to 3.75 to 4 lakh hectares. Despite increased sowing, the upcoming turmeric crop is expected to be around 70-75 lakh bags, with zero carryover stock, potentially leading to tighter availability and supporting prices in 2025. Turmeric exports during April-May 2024 dropped by 20.03% compared to the same period in 2023, while imports surged by 417.74%, reflecting changing market dynamics. Technically, the turmeric market is experiencing short covering, as indicated by a slight drop in open interest by 0.05%, settling at 19,550 contracts. Turmeric is currently supported at 14,996, with a potential test of 14,810 on the downside. Resistance is expected at 15,374, and a move above this level could push prices towards 15,566.
 

Trading Ideas:
* Turmeric trading range for the day is 14810-15566.
* Turmeric settled flat as demand remains limited, as buyers are reluctant to make purchases.
* Pressure also seen amid news of increased sowing.
* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.
* In Nizamabad, a major spot market, the price ended at 15827.8 Rupees dropped by -1.07 percent.

Jeera

Jeera prices surged by 2.06%, closing at ?25,270, driven by strong domestic and export demand, coupled with tight global supplies. However, the upside remains capped due to expectations of a significantly higher production this season, which could weigh on prices in the coming months. Farmers have been holding back their stocks in anticipation of better prices, further supporting the current price levels. This season, jeera production in India is projected to be 30% higher, ranging between 8.5 to 9 lakh tonnes, thanks to a substantial increase in cultivation area. In Gujarat, the sowing area expanded by 104%, while Rajasthan saw a 16% increase. Despite the anticipated bumper crop, jeera prices are currently being buoyed by robust demand, both domestically and internationally.Globally, cumin production has also increased, with China's output more than doubling to 55-60 thousand tons. Other major producers like Syria, Turkey, and Afghanistan are also expected to see higher production, which could lead to a decline in global prices as these supplies enter the market. This dynamic, combined with reduced export trade, suggests a potential shift in global cumin market dynamics. Technically, the jeera market is under short covering, as indicated by the unchanged open interest, settling at 2,304 contracts, while prices rose by ?510. Jeera currently finds support at ?24,700, with a potential test of ?24,130 if this level is breached. On the upside, resistance is expected at ?25,790, and a move above this level could see prices testing ?26,310.
 

Trading Ideas:
* Jeera trading range for the day is 24130-26310.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 25398.05 Rupees gained by 0.21 percent.