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Gold

Gold prices climbed by 0.29% to settle at Rs.71,584 per 10 grams, driven by strong safe-haven demand amidst heightened geopolitical tensions and anticipation of a U.S. interest rate cut. The ongoing Israel-Iran-Hamas conflict has intensified global uncertainties, prompting investors to seek refuge in gold. Additionally, expectations that the U.S. Federal Reserve will cut interest rates by 25 basis points at each of its remaining three meetings in 2024 further bolstered gold's appeal. This outlook comes in the wake of weaker-than-expected U.S. employment data, which has shifted market sentiment towards a more dovish Fed stance. In India, gold imports declined by 4.23% to $12.64 billion during April-July 2024-25, reflecting global economic uncertainties. Domestic gold dealers were compelled to offer discounts, with prices dampened by a recent hike, leading to subdued retail demand. Indian dealers offered discounts of up to $3 per ounce over official domestic prices, a significant change from the previous week’s $9 premium. Despite these short-term challenges, the World Gold Council (WGC) expects Indian gold demand to recover in the second half of 2024. Technically, the gold market is witnessing short covering, with a 2.69% drop in open interest, settling at 17,585 contracts. Prices increased by Rs.209, indicating a bullish sentiment. Gold is currently supported at Rs.71,270, with a break below this level potentially leading to a test of Rs.70,955. On the upside, resistance is expected at Rs.71,810, and a move above this level could push prices to test Rs.72,035.
 

Trading Ideas:
* Gold trading range for the day is 70955-72035.
* Gold gains on strong safe-haven demand and expectations of an imminent U.S. rate cut
* Demand for gold remains potent as geopolitical tensions is driving safe-haven demand.
* Commerzbank raises gold price forecast to $2,500 for 2024
 
 
 Silver
Silver prices surged by 1.35% to settle at Rs.84,338 per kilogram, benefiting from a weaker U.S. dollar and growing expectations of an imminent rate cut by the Federal Reserve. The dollar index fell to its weakest level in nearly eight months, pressured by concerns that the Fed may need to lower borrowing costs to prevent an economic downturn. Chicago Fed President Austan Goolsbee highlighted warning signs in the U.S. labor market and rising credit card delinquencies, which have contributed to the dovish outlook on monetary policy. Market participants are now pricing in a 100% chance that the Fed will cut rates by 25 basis points in September, with the possibility of a larger 50 basis points reduction still in play. In terms of economic data, U.S. consumer sentiment showed improvement in August, according to the University of Michigan's preliminary reading, which rose to 67.8 from 66.4 in July. This boost in sentiment is attributed to developments in the U.S. political landscape, though inflation expectations remained steady. Meanwhile, the number of Americans filing new unemployment claims dropped to a one-month low last week, suggesting a gradual slowdown in the labor market. Technically, the silver market is experiencing short covering, with open interest dropping by 5.32% to settle at 23,571 contracts. Prices rose by Rs.1,125, signaling strong upward momentum. Silver is currently supported at Rs.83,565, with a break below this level potentially leading to a test of Rs.82,790. On the upside, resistance is expected at Rs.84,955, and a move above this level could push prices to test Rs.85,570.
 

Trading Ideas:
* Silver trading range for the day is 82790-85570.
* Silver gains as the dollar index fell toward 102, hitting its weakest levels in nearly eight months.
* Prices seen supported amid expectations that the Federal Reserve will have to lower borrowing costs soon to avert an economic downturn.
* Fed’s Goolsbee said that the US labor market and some leading economic indicators are flashing warning signs, citing rising levels of credit card delinquencies.
 
 
 Crudeoil
Crude oil prices declined by 2.6% to settle at Rs.6,190 per barrel, primarily driven by concerns over weakened demand in China, which overshadowed supply risks from the Middle East. Recent economic data from China indicated a significant loss of momentum in July, with new home prices dropping at their fastest pace in nine years. The International Energy Agency (IEA) maintained its 2024 global oil demand growth forecast but slightly lowered its estimate for 2025, citing the impact of reduced Chinese consumption. In the speculative markets, money managers increased their net long positions in U.S. crude futures and options by 17,469 contracts to 163,114 during the week ending August 13, according to the U.S. Commodity Futures Trading Commission (CFTC). U.S. crude oil inventories unexpectedly rose by 1.357 million barrels in the week ending August 9, 2024, breaking a six-week streak of declines. This increase contradicted market expectations of a 2 million barrel decrease. However, stocks at the Cushing, Oklahoma delivery hub fell by 1.665 million barrels, following a significant build in the previous week. Technically, the crude oil market is under fresh selling pressure, with open interest rising by 33.45% to settle at 6,818 contracts, signaling increased bearish bets. Prices dropped by Rs.165, suggesting a continuation of the downward trend. Crude oil is currently finding support at Rs.6,121, and a break below this level could lead to a test of Rs.6,052. On the upside, resistance is expected at Rs.6,312, and a move above this level could see prices testing Rs.6,434.
 

Trading Ideas:
* Crudeoil trading range for the day is 6052-6434.
* Crude oil dropped as concern over demand in China weighed on market sentiment.
* Chinese refineries sharply cut crude processing rates last month on tepid fuel demand.
* IEA trimmed its global oil demand growth 2025 estimate, citing the impact of Chinese consumption.
 
 
 Naturalgas
Natural gas prices surged by 4.07% to settle at Rs.186.5, driven by hotter-than-expected weather forecasts that are likely to increase cooling demand across the United States. The National Weather Service has predicted that all states east of the Rocky Mountains will experience above-seasonal temperatures over the next 6 to 14 days. The impact of this increased demand was evident in the recent Energy Information Administration (EIA) report, which showed a rare summer drop in natural gas inventories. For the first time since 2016, U.S. utilities withdrew 6 billion cubic feet of gas from storage during the week ending August 9th, 2024. This withdrawal contrasts sharply with market expectations of a 43 billion cubic feet build, signaling stronger-than-anticipated demand amid ongoing hot weather. Adding to the bullish sentiment, Baker Hughes reported a slight increase in the number of rigs drilling for natural gas in the U.S., which rose by 1 to 98 this week. However, despite this uptick, the U.S. Energy Information Administration (EIA) revised its forecast for natural gas output, predicting a larger decline this year compared to earlier estimates. From a technical perspective, the natural gas market is experiencing short covering, with open interest dropping by 15.54% to settle at 33,561 contracts as prices rose by Rs.7.3. This suggests that traders are closing out short positions in response to the recent price rally. Currently, natural gas is finding support at Rs.179.8, and a break below this level could lead to a test of Rs.173. On the upside, resistance is expected at Rs.190.9, and if prices move above this level, they could potentially test the Rs.195.2 mark.
 

Trading Ideas:
* Naturalgas trading range for the day is 173-195.2.
* Natural gas traded higher as hot forecasts raise expectations for cooling demand.
* EIA reported stocks fell by six-billion cubic feet, leaving inventories at 3.26-trillion cubic feet
* The number of rigs drilling for natural gas in the United States rose by 1 this week to 98
 
 
 
 Copper
Copper prices gained 0.62% to settle at ?806.45, buoyed by diminishing fears of a U.S. recession and declining inventories in China, the world's largest consumer of the metal. Recent U.S. economic data, including strong retail sales, inflation, and producer price reports, have helped ease concerns about an economic downturn that had been sparked by weaker employment figures earlier this month. In China, copper prices received additional support due to a decline in inventories. Copper users in China increased their purchases as prices dipped, anticipating strong demand in the upcoming autumn season. The refined copper rod producers ramped up their operations more than expected, reflecting optimism about future demand. Furthermore, deliverable copper stocks on the Shanghai Futures Exchange (SHFE) have fallen to a five-month low after hovering around a four-year peak in recent weeks. On the global front, the refined copper market showed a surplus of 65,000 metric tons in May, up from an 11,000 metric ton surplus in April, according to the International Copper Study Group (ICSG). For the first five months of 2024, the market recorded a 416,000 metric ton surplus, significantly higher than the 154,000 metric ton surplus during the same period last year. Despite this surplus, China's unwrought copper imports in July fell by 2.9% year-on-year, signaling subdued demand and high existing stocks of the metal. Technically, the copper market is experiencing short covering, with a 4.61% decline in open interest to settle at 10,840 contracts as prices increased by Rs.5. Currently, copper has support at ?803.6, and a break below this level could lead to a test of Rs.800.6. On the upside, resistance is expected at Rs.808.7, and if prices move above this level, they could potentially test the ?810.8 mark.
 

Trading Ideas:
* Copper trading range for the day is 800.6-810.8.
* Copper prices rose as fears of a U.S. recession faded
* Union at BHP's Escondida copper mine in Chile signs new deal, ending risk of strike
* Commerzbank lowers copper's year-end price forecast from $9,800 to $9,500 per ton
 
 
 Zinc
Zinc prices rose by 0.67% to settle at Rs.264, driven by a combination of declining inventories, rising energy costs, and broader market sentiments. Inventories in warehouses monitored by the Shanghai Futures Exchange dropped by 9.3% from the previous Friday, indicating a tightening supply situation. This reduction in available stock supports prices as it suggests demand outpacing supply. The broader macroeconomic environment also played a role in supporting zinc prices. Inflation data indicating that China is stepping back from deflation has improved sentiment across both equities and commodities markets. In the U.S., job growth slowed more than expected in July, with the unemployment rate increasing to 4.3%. While this could signal potential economic vulnerabilities, it has also fueled expectations of deeper interest rate cuts by the U.S. Federal Reserve, potentially starting in September. On the supply side, MMG Ltd's decision to halt operations at a mill at its Dugald River zinc mine in Australia for about two months of repair work is expected to exacerbate the tightness in the zinc concentrates market. The global zinc market surplus fell to 8,300 metric tons in May from 15,300 tons in April, as reported by the International Lead and Zinc Study Group (ILZSG). Technically, the zinc market is experiencing short covering, as evidenced by a 9.51% drop in open interest, which settled at 1,628 contracts. This decline in open interest, coupled with a rise in prices by Rs.1.75, suggests that traders are closing out short positions, providing additional support to the market. Zinc is currently finding support at Rs.262.9, and a break below this level could see prices testing the Rs.261.8 mark. On the upside, resistance is expected at Rs.265.4, and if prices move above this level, they could potentially test Rs.266.8.
 

Trading Ideas:
* Zinc trading range for the day is 261.8-266.8.
* Zinc gains as Shanghai warehouse zinc stocks down 9.3%
* Support also seen as buying was triggered by expectations of higher energy costs
* MMG Ltd has halted operations at a mill at its Dugald River zinc mine in Australia for about two months of repair work.
 
 
 
 Aluminium
Aluminium prices increased by 2.24% to Rs.223.95, driven by positive U.S. economic data that alleviated concerns about a potential recession. The recent strong retail sales and employment figures from the U.S. have eased recession fears, which had previously pressured base metal prices. In Asia, the aluminium market has been influenced by declining stocks and production data. Aluminium stocks at three major Japanese ports fell to 299,600 metric tons by the end of July, marking a 5.7% decrease from the previous month. The reduction in available stocks is partly due to a significant increase in the share of Russian-origin aluminium in London Metal Exchange (LME) warehouses, which rose to 65% in July from 50% in June, while the share of Indian-origin aluminium fell to 33% from 40%. China's aluminium output in July surged to 3.68 million metric tons, the highest monthly production in over two decades, driven by profitable conditions despite recent price declines. This output represents a 6% year-on-year increase. Globally, primary aluminium production increased by 3.2% year-on-year to 5.94 million metric tons in June. The International Aluminium Institute (IAI) reported a 3.9% rise in production for the first half of 2024, totaling 35.84 million metric tons. The aluminium market is currently experiencing short covering, as evidenced by a 9.15% drop in open interest to 3,246 contracts. This reduction in open interest, coupled with a rise in prices by Rs.4.9, suggests that traders are closing out short positions, contributing to the price increase. Aluminium is finding support at Rs.221, and a breach below this level could see prices test Rs.217.9. On the upside, resistance is anticipated at Rs.226, with a move above this level potentially pushing prices towards Rs.227.9.
 

Trading Ideas:
* Aluminium trading range for the day is 217.9-227.9.
* Aluminium gains amid encouraging U.S. data that allayed fears of an imminent recession in the economy.
* China July aluminium output rises to highest monthly total in over 20 yrs
* Positive U.S. retail sales and jobs data eased worries about a potential recession in the country.
 
 
 Cottoncandy
Cotton candy prices edged up by 0.3% to Rs.57,000, driven by a decrease in cotton acreage and shifting market dynamics. The kharif season has seen a notable decline in cotton planting, with current acreage at 110.49 lakh hectares, down 9% from 121.24 lakh hectares last year. The Cotton Association of India (CAI) has adjusted its forecast, estimating the acreage for this year to be around 113 lakh hectares compared to 127 lakh hectares in the previous season. The CAI anticipates a tighter cotton balance sheet for the upcoming year due to higher exports, particularly to Bangladesh. Cotton exports have surged from 15 lakh bales to 28 lakh bales this year, driven by strong demand from neighboring countries. For the 2023-24 season, India's cotton production and consumption are both around 325 lakh bales, with exports at 28 lakh bales and imports at 13 lakh bales. Globally, the cotton balance sheet for 2024/25 shows reductions in production, consumption, and stocks. World production has been cut by 2.6 million bales due to lower outputs in the U.S. and India. Global consumption has decreased by almost 1 million bales, primarily due to reduced consumption in China. The market is experiencing fresh buying activity, with open interest increasing by 0.57% to settle at 176 contracts. Prices have risen by Rs.170, with support seen at Rs.56,900. A breach below this support could test ?56,800. Resistance is observed at Rs.57,100, and a move above this level could see prices reaching Rs.57,200.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56800-57200.
* 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 an increase of 1.21%, settling at ?16,266, largely due to short covering after recent declines. Despite the rise, demand remains weak as buyers continue to hold back, impacted by anticipated volatility in export markets such as Bangladesh. Increased arrivals were noted as stockists anticipated potential price reductions due to the current low demand environment. In Indonesia, dry weather has expedited the harvesting process, leading to peak levels of turmeric availability. Turmeric sowing has significantly increased this year compared to last. On the Erode line, sowing is reported to be double that of the previous year. In Maharashtra, Telangana, and Andhra Pradesh, sowing has increased by 30-35% compared to last year. Despite the higher sowing area, production is estimated to be between 70-75 lakh bags for the upcoming season, which is an increase from last year's 45-50 lakh bags. Export data reveals a 20.03% drop in turmeric exports for April-May 2024 compared to the same period in 2023. However, May 2024 exports showed a 23.43% increase over April 2024 but a 12.17% decrease compared to May 2023. Imports surged by 417.74% during April-May 2024 compared to the previous year, indicating a significant increase in turmeric imports. The turmeric market is experiencing fresh buying interest, with open interest rising by 2.31% to 16,198 contracts and prices up by Rs.194. Support is observed at Rs.16,152, and a drop below this level could test Rs.16,038. Resistance is likely at Rs.16,340, with a breakout above this level potentially pushing prices towards Rs.16,414.
 

Trading Ideas:
* Turmeric trading range for the day is 16038-16414.
* Turmeric gains  on short covering  after prices dropped 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 16082.15 Rupees gained by 0.79 percent.
 
 
 Jeera
Jeera (cumin) prices increased by 0.52%, settling at Rs.25,275, driven by strong domestic and export demand amid tight global supplies. However, the price upside appears limited due to expectations of higher production, which could exert downward pressure on prices. Farmers are reportedly holding back their stocks in anticipation of better prices, adding to market support. This season, jeera production is projected to rise significantly, up by 30% to approximately 8.5-9 lakh tonnes, thanks to an expanded cultivation area. In Gujarat, sowing area increased by 104%, while Rajasthan saw a 16% rise. The substantial increase in production is mirrored globally, with China’s output soaring from 28-30 thousand tonnes to 55-60 thousand tonnes. Exports have shown mixed trends. During April-May 2024, jeera exports rose by 43.50% to 58,943.84 tonnes compared to the same period in 2023. However, May 2024 exports fell by 44.99% compared to April 2024, and by 15.64% compared to May 2023. Despite this, a significant increase in exports is anticipated in 2024 due to expanded sowing and declining international prices. The jeera market is experiencing fresh buying interest, with open interest up by 0.48% to 25,040 contracts and prices rising by Rs.130. Support is currently at Rs.24,990, and a drop below this level could test Rs.24,710. Resistance is seen at Rs.25,600, with a move above potentially pushing prices to Rs.25,930. The technical outlook reflects a cautiously bullish trend as the market adjusts to evolving supply and demand dynamics.
 

Trading Ideas:
* Jeera trading range for the day is 24710-25930.
* 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 25991.05 Rupees dropped by -0.05 percent.

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