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Gold

Gold prices edged up by 0.07%, settling at ?71,830, as investors awaited the release of the latest FOMC minutes, which could provide critical insights into the Federal Reserve's future monetary policy direction. During their July meeting, Federal Reserve officials considered reducing interest rates but chose to hold off, hinting that a rate cut in September was increasingly likely. The meeting minutes suggested that if economic data continued to align with expectations, easing monetary policy might be appropriate. Despite the unanimous decision to maintain the current rate range of 5.25%-5.5%, some officials favored a rate cut in July due to improvements in inflation and rising unemployment. Traders are also keenly watching Fed Chair Powell's upcoming speech at the Jackson Hole Symposium for further clues on rate cuts. Markets currently anticipate a 100 basis point reduction by the U.S. central bank in its remaining decisions for the year, driven by cooling inflation and a weakening labor market. However, there is still uncertainty over whether the Fed will opt for a 25 or 50 basis point cut in September, especially after stronger-than-expected retail sales data in July. Geopolitical uncertainties and substantial global ETF inflows continue to support gold's bullish trend, with prices reaching consecutive record highs above $2,500 an ounce. Technically, the gold market is experiencing short covering, with open interest dropping by 1.38% to settle at 17,465 while prices increased by ?53. Gold is currently supported at ?71,500, with a potential test of ?71,170 if this level is breached. On the upside, resistance is expected at ?72,130, and a move above this could see prices testing ?72,430.

Trading Ideas:
* Gold trading range for the day is 71170-72430.
* Gold steadied as investors awaited the latest FOMC minutes
* Federal Reserve officials considered reducing interest rates but decided to wait.
* Geopolitical uncertainties and substantial global ETF inflows continued to support the bullish trend in gold.

Silver

Silver prices settled up by 0.16% at 84,863 as the dollar halted its slide, with investors keenly awaiting the minutes from the U.S. Federal Reserve's latest policy meeting for further clues on interest rate cuts. During their July meeting, Federal Reserve officials considered the possibility of reducing interest rates but ultimately chose to wait, signaling that a cut in September was becoming increasingly likely if economic data continues to align with expectations. While all members voted to maintain the current rate range of 5.25%-5.5%, some officials leaned towards a rate cut due to improvements in inflation and rising unemployment. The moderation of inflation in the United States has strengthened bets for a potential rate cut by the Fed in September. However, Fed Governor Michelle Bowman remains cautious about any shift in central bank policy, citing continued upside risks for inflation. Meanwhile, in Australia, Perth Mint reported a significant surge in silver product sales, with a 91% month-on-month increase to 939,473 ounces in July, the highest level since February. The majority of these sales were US-bound, with the United States remaining the firm’s largest market. Additionally, Chicago Fed President Austan Goolsbee pointed to warning signs in the US labor market and leading economic indicators, including rising levels of credit card delinquencies. Weaker-than-expected US housing starts numbers for July also contributed to a bearish sentiment. Technically, the silver market is experiencing short covering, with a 3.65% drop in open interest to settle at 21,196 contracts, while prices increased by 133 rupees. Silver finds support at 84,315, with a potential test of 83,770 on the downside. Resistance is expected at 85,340, with a move above this level possibly leading to a test of 85,820.

Trading Ideas:
* Silver trading range for the day is 83770-85820.
* Silver prices settled flat as the dollar halted its slide
* Inflation continued to moderate in US, boosting bets for a rate cut from the Fed in September.
* Fed’s Bowman said she remains cautious about any shift in central bank policy as she sees continued upside risks for inflation.

Crude oil

Crude oil prices declined by 2.01%, settling at ?6,030, amid ongoing concerns over weak demand from China and the easing of geopolitical tensions after Israel agreed to a proposal addressing issues impeding a ceasefire in Gaza. Data showed that China's crude oil imports from Russia dropped by 7.4% in July compared to the previous year, while fuel oil imports declined for the third consecutive month. China's economic challenges have led to weak processing margins and low fuel demand, causing reduced operations at both state-run and independent refineries. In the U.S., API data revealed an unexpected increase in crude oil inventories by 0.347 million barrels for the week ending August 20th, defying market expectations of a 2.8 million barrel draw. This marked the second inventory build in the last eight weeks, adding to the bearish sentiment. Additionally, the Energy Information Administration (EIA) reported a significant draw in U.S. crude stocks by 4.6 million barrels to 426 million barrels for the week ending August 16th, which was more substantial than the expected 2.7 million barrel draw. However, gasoline stocks fell by 1.6 million barrels, and distillate stockpiles decreased by 3.3 million barrels, both exceeding market expectations. Technically, the crude oil market is experiencing fresh selling pressure, with open interest increasing by 39.76% to settle at 11,617. Prices dropped by ?124, with crude oil now finding support at ?5,955. If this support is breached, prices could test the ?5,880 level. On the upside, resistance is likely at ?6,170, and a move above this level could see prices testing ?6,310.

Trading Ideas:
* Crudeoil trading range for the day is 5880-6310.
* Crude oil dropped amid China demand concerns and easing geopolitical risks
* Imports of crude oil from Russia fell in July by 7.4% from a year ago.
* Markets continued to monitor progress in the Middle East

Natural gas

Natural gas prices settled down by 1.58% at 181.2 amid concerns over an oversupply situation, with storage levels still about 13% higher than the seasonal norm. Despite this, the downside was somewhat limited due to a recent decline in output and forecasts for hotter weather over the next two weeks. The market remains oversupplied even though weekly storage builds have been smaller than usual in 13 of the past 14 weeks, including a rare storage decline last week. In August, gas output in the U.S. Lower 48 states averaged 102.3 billion cubic feet per day (bcfd), down from 103.4 bcfd in July. A daily output drop to a preliminary nine-week low of 100.6 bcfd was noted, although such data is often subject to revisions. Looking ahead, hotter weather is expected to increase gas demand, with forecasts predicting a rise from 103.9 bcfd this week to 105.1 bcfd next week, higher than earlier estimates. The U.S. EIA also revised its forecast, predicting a larger decline in natural gas output for 2024 due to record-low prices earlier in the year, which forced producers to curtail production. The EIA now expects natural gas output to average 103.3 bcfd this year, slightly down from previous estimates. On the consumption side, the forecast has been revised upwards to 89.8 bcfd for 2024. Technically, the natural gas market is under long liquidation, with open interest dropping by 10.47% to settle at 28,911 contracts while prices fell by 2.9 rupees. Natural gas is currently finding support at 177.9, with a potential test of 174.6 on the downside. Resistance is expected at 185.8, with a move above this level possibly leading to a test of 190.4.

Trading Ideas:
* Naturalgas trading range for the day is 174.6-190.4.
* Natural gas prices dropped amid tremendous oversupply of gas still in storage.
* However, downside seen limited amid decline in output in recent days and forecasts for more hot weather.
* Gas output in the U.S. Lower 48 states has slid to an average of 102.3 bcfd so far in August, down from 103.4 bcfd in July.

Copper

Copper prices rose by 0.53%, settling at ?804.2, as the ongoing strike by a workers' union at Lundin Mining's Caserones copper mine in Chile entered its second week with no resolution in sight. This labor dispute has added to supply concerns, lending support to prices. Additionally, positive U.S. economic data alleviated fears of an imminent recession, further boosting copper's appeal. Meanwhile, copper inventories monitored by the Shanghai Futures Exchange (SHFE) declined by 8.4%, indicating tighter supply in the near term. However, the overall global copper market remains in surplus. The International Copper Study Group (ICSG) reported a 95,000 metric ton surplus in June, up from a 63,000 metric ton surplus in May. For the first half of the year, the market showed a surplus of 488,000 metric tons, significantly higher than the 115,000 metric ton surplus recorded during the same period last year. World refined copper output in June stood at 2.31 million metric tons, while consumption was 2.21 million metric tons. In China, copper exports fell sharply in July to 70,006 tons, less than half of June's record high, due to reduced profitability. Despite a slight improvement in physical copper demand in China, driven by a drop in prices over the past two months, the overall consumption outlook remains uncertain due to slowing economic growth and challenges in the property sector. Technically, the copper market is experiencing short covering, with open interest dropping by 18.6% to settle at 7,495. Copper is currently supported at ?800.2, with a potential test of ?796.1 if this level is breached. On the upside, resistance is expected at ?807.2, and a move above this could see prices testing ?810.1.

Trading Ideas:
* Copper trading range for the day is 796.1-810.1.
* Copper gains as strike at Lundin's Caserones copper mine showing no signs of resolution after a week
* The global refined copper market showed a 95,000 metric tons surplus in June – ICSG
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange (SHFE) fell 8.4%.

Zinc

Zinc prices settled up by 0.89% at 266.95, driven by improved demand prospects in China and a weakening dollar, as expectations of an imminent interest rate cut in the United States mounted. The decrease in zinc inventories in warehouses monitored by the Shanghai Futures Exchange, which fell by 9.3% from last Friday, further supported prices. Additionally, the market was buoyed by expectations of higher energy costs, which constitute a significant portion of zinc production expenses. Positive economic signals from China, including inflation data that indicated a step back from deflation, also bolstered sentiment across equities and commodities markets. In the U.S., job growth slowed more than anticipated in July, with the unemployment rate rising to 4.3%, raising concerns about a weakening labor market and increasing the likelihood of deeper interest rate cuts by the Federal Reserve starting in September. Supply concerns also played a role in zinc's price rise. MMG Ltd announced a two-month halt in operations at its Dugald River zinc mine in Australia for repair work, which is expected to tighten the already constrained zinc concentrates market. This supply disruption, coupled with the global zinc market surplus falling to 8,700 metric tons in June from 44,000 tons in May, underscored the market's tightening fundamentals. From a technical perspective, the zinc market is under short covering, with open interest declining by 9.72% to settle at 1,337 contracts as prices rose by 2.35 rupees. Zinc is currently supported at 265.3, with a potential test of 263.7 on the downside. Resistance is expected at 268.3, with further gains likely if prices move above this level, potentially testing 269.7.

Trading Ideas:
* Zinc trading range for the day is 263.7-269.7.
* Zinc gains as buying spurred by signs of improving demand in China and a sliding dollar.
* Zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell 9.3% from last Friday.
* Support also seen as buying was triggered by expectations of higher energy costs

Aluminum

Aluminum prices edged down by 0.13%, settling at ?226.25, as traders locked in profits amid concerns over higher supply and weak demand, particularly from China. Despite the slight decline, the aluminum market is facing challenges due to subdued demand in China, coupled with an ample supply driven by robust domestic production and increased inflows from Russia. In July, China exported 146,708 tons of alumina, a 9.6% year-on-year increase, with 92.5% of the total exports flowing into Russia. Additionally, China's primary aluminum imports rose by 11.5% year-on-year to 129,898 tons in July. Meanwhile, the raw material for producing aluminum, alumina, has become more expensive. China's alumina futures reached a near three-month high due to increased consumption, driven by cuts in alumina refineries operated by Alcoa and Rio Tinto in Australia, which strained supply. Over 30% of alumina inventories in warehouses monitored by the Shanghai Futures Exchange (ShFE) were withdrawn over the past three weeks, as profitability in producing primary aluminum improved. China's aluminum output in July rose by 6% year-on-year to 3.68 million metric tons, marking the highest monthly output since 2002. This increase was driven by new projects coming online in Inner Mongolia and strong production in other key regions. Globally, primary aluminum output rose by 2.4% year-on-year to 6.194 million metric tons, with production in China alone increasing by 2.5% to 3.69 million tons. Technically, the aluminum market is experiencing long liquidation, with open interest dropping by 13.37% to settle at 2,371. Aluminum is currently finding support at ?224.8, with a potential test of ?223.2 if this level is breached. On the upside, resistance is expected at ?227.8, and a move above this could see prices testing ?229.2.

Trading Ideas:
* Aluminium trading range for the day is 223.2-229.2.
* Aluminium dropped after traders locked in some profits and also assessed higher supply and weak demand from China.
* 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.

Cotton

Cotton prices edged up by 0.26%, settling at ?57,200, as concerns over reduced acreage in the current Kharif cropping season provided support. The Cotton Association of India (CAI) reported a significant decrease in cotton acreage, down by around 9% to 110.49 lakh hectares compared to 121.24 lakh hectares in the same period last year. The CAI expects the total acreage for this year to be around 113 lakh hectares, a notable drop from 127 lakh hectares in the previous year. This decline is primarily due to farmers shifting to other crops, driven by lower yields and the high cost of production. Further tightening of the cotton balance sheet is anticipated for next year, primarily due to increased exports to Bangladesh, which have surged from 15 lakh bales to 28 lakh bales due to strong demand. India's cotton production and consumption for 2023-24 are both estimated at around 325 lakh bales. The country is expected to export 28 lakh bales and import 13 lakh bales, with the 15 lakh bales gap being filled by last year's stocks. As of now, spinning mills hold 25 lakh bales in stock, while ginners and the Cotton Corporation of India have 15 lakh and 20 lakh bales, respectively. With another 10 lakh bales expected during August-September, around 70 lakh bales are available for consumption until September 30. Any delays in the new crop could tighten the supply situation for mills. Technically, the cotton market is experiencing short covering, with open interest remaining unchanged. Cotton prices are currently supported at ?57,110, with a potential test of ?57,030 if this level is breached. On the upside, resistance is expected at ?57,260, and a move above this could see prices testing ?57,330.

Trading Ideas:
* Cottoncandy trading range for the day is 57030-57330.
* 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 experienced a sharp decline of 5.73%, settling at 15,168, driven by limited demand and buyer reluctance. The market sentiment is further pressured by increased arrivals as stockists reduced their holdings, anticipating a potential price drop due to low demand. Additionally, export prospects are clouded by expected volatility in Bangladesh, which could further complicate the market. In Indonesia, dry weather has accelerated the harvesting process, leading to a peak in harvest levels. This has resulted in many farmers selling their turmeric in the wet stage, ultimately reducing production. Despite these pressures, the downside has been somewhat limited as farmers are holding back stocks, hoping for future price increases. However, the combination of rising acreage and subdued export demand suggests that prices may continue to face downward pressure. Sowing activity has increased significantly, with reports indicating that turmeric sowing in the Erode region has doubled compared to last year, and in Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher. The current year's turmeric crop is expected to be around 70-75 lakh bags, with zero outstanding stock, which could lead to a situation where availability in 2025 falls short of consumption needs. However, the immediate pressure remains from the high acreage and increased imports, which surged by 417.74% during April-May 2024. Technically, the turmeric market is under long liquidation, with open interest decreasing by 4.35% to settle at 19,560 contracts as prices dropped by 922 rupees. Support is currently seen at 14,854, with a potential test of 14,538 on the downside. Resistance is likely at 15,758, with further upside possible if prices break through to test 16,346.

Trading Ideas:
* Turmeric trading range for the day is 14538-16346.
* Turmeric 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 15998.9 Rupees dropped by -0.01 percent.

Jeera

Jeera prices declined by 0.34%, settling at ?24,760, amid robust domestic and export demand, coupled with tight global supplies. Despite the current demand, prices faced pressure due to expectations of higher production this season. Jeera production is anticipated to be 30% higher, ranging between 8.5 to 9 lakh tonnes, driven by a significant rise in cultivation areas. The sowing area in Gujarat increased by 104%, and in Rajasthan by 16%, reflecting the optimism among farmers following last year's favorable prices. Globally, jeera production has also surged, with China's cumin output more than doubling to over 55-60 thousand tons. Similar trends are observed in Syria, Turkey, and Afghanistan, where increased production is expected to enter the market, potentially leading to a decline in prices. Turkey's production is anticipated to reach 12-15 thousand tons, while Afghanistan could see its output double, weather permitting. The market also saw reduced export trade, contributing to the price drop. However, trade analysts predict a significant increase in jeera exports, potentially reaching 14-15 thousand tonnes by February 2024, as the larger sowing area in Gujarat and Rajasthan and declining international prices are likely to boost exports. Technically, the jeera market is under fresh selling pressure, with open interest increasing by 0.92% to settle at 2,304. The price is currently supported at ?24,180, with a potential test of ?23,600 if this level is breached. On the upside, resistance is expected at ?25,160, and a move above this could see prices testing ?25,560.

Trading Ideas:
* Jeera trading range for the day is 23600-25560.
* 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 25301.45 Rupees dropped by -0.45 percent.

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