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Gold

Gold prices declined by -0.55% to settle at 73,094, pressured by a strengthening dollar and rising Treasury yields as traders positioned themselves for the upcoming U.S. Federal Reserve rate decision. The market is now pricing in a 65% chance of a 50-basis-point cut, up from 34% the previous week, as indicated by the CME FedWatch tool. U.S. retail sales rose unexpectedly in August, signaling robust economic activity, while inflation appears to be easing but remains somewhat sticky, as highlighted by producer price data showing higher-than-expected service costs. In the labor market, initial jobless claims rose, reflecting a softening trend, supported by weaker August payrolls data. Meanwhile, in Europe, the European Central Bank (ECB) delivered a 25 bps rate cut, showing confidence that inflation is steadily declining. Despite these factors, retail demand for gold in key Asian markets remained weak due to high prices, prompting deep discounts from dealers in India and China. Indian dealers offered discounts as high as $22 per ounce, the largest in two months, while Chinese dealers provided discounts of $8.6-$10. Demand in China is expected to pick up by October-November despite current lackluster interest, while India's gold demand is projected to improve in the second half of 2024, supported by reduced import taxes and good monsoon rains, according to the World Gold Council. From a technical standpoint, gold is experiencing long liquidation, with open interest dropping by -7.05%. Prices are supported at 72,820, and a break below could lead to a test of 72,550. On the upside, resistance is at 73,480, with a potential move higher toward 73,870 if breached.

Trading Ideas:
* Gold trading range for the day is 72550-73870.
* Gold eased as slightly dollar and Treasury yields edged higher.
* U.S. retail sales unexpectedly rose in August, suggesting that the economy remained on a solid footing
* Traders positioned themselves for a potential U.S. interest rate cut decision by the Federal Reserve.

Silver

Silver prices declined by -0.52%, settling at ?89,140 as the U.S. dollar steadied following a four-day decline ahead of the Federal Reserve's policy meeting. The market currently expects a 65% probability of a 50 basis-point rate cut and a 34% chance of a 25 basis-point cut, according to the CME FedWatch Tool. Regardless of the decision, the Fed is anticipated to continue cutting rates throughout the year, which could influence silver's safe-haven appeal. On the U.S. economic front, manufacturing production increased by 0.9% in August, surpassing market expectations of a 0.3% rise, driven by a 2.1% jump in durable goods manufacturing. U.S. industrial production also rose 0.8%, the most in six months, compared to forecasts of a 0.2% increase. Additionally, capacity utilization improved to 78%, although it remains 1.7 percentage points below its long-run average. These stronger-than-expected figures suggest a resilient U.S. economy, which could weigh on silver prices in the short term as investors assess the need for further Fed rate cuts. In India, silver demand is set to nearly double in 2024 due to strong demand from the solar panel and electronics industries, alongside growing investment interest. India's silver imports surged to 4,554 tons in the first half of 2024, up from just 560 tons a year ago, as industrial buyers stockpile the metal amid expectations of higher prices. Technically, silver is undergoing long liquidation, with a 2.3% drop in open interest. Support is seen at ?88,700, and a break below could lead to a test of ?88,265. On the upside, resistance is at ?89,745, with a potential move toward ?90,355 if breached.

Trading Ideas:
* Silver trading range for the day is 88265-90355.
* Silver prices traded lower as the dollar steadied after a four-day decline
* Manufacturing production in the US rose 0.9% from a month earlier in August 2024
* Industrial production in the US rose 0.8 percent from a month earlier in August 2024

Crude oil

Crude oil prices rose by 1.73% to settle at 5,989, driven by expectations of lower U.S. crude stockpiles and concerns over production following Hurricane Francine. Although supply disruptions eased, with 12% of U.S. Gulf of Mexico crude production still offline (down from over 40% during the peak of the hurricane), companies like Exxon Mobil and Chevron have begun restarting their offshore platforms. In China, oil refinery output dropped for the fifth consecutive month in August due to declining fuel demand and weak export margins, further highlighting concerns over demand in the world's second-largest economy. U.S. crude oil inventories rose by 0.833 million barrels in the week ending September 6, 2024, falling short of market expectations for a 1 million barrel increase, according to the EIA report. Gasoline stocks jumped by 2.311 million barrels, while distillate stockpiles, including diesel and heating oil, increased by 2.308 million barrels, both exceeding forecasts. In contrast, crude stocks at the Cushing, Oklahoma delivery hub fell by 1.704 million barrels, adding further complexity to the U.S. supply outlook. China's crude oil imports fell by 7% year-on-year in August but recovered slightly from July's levels, marking a slow rebound. Annual demand growth in China has decelerated significantly, reflecting the broader economic challenges the country is facing. Technically, crude oil is under fresh buying pressure, with open interest rising by 1.1% to settle at 9,085. Crude oil finds support at 5,874, with a potential test of 5,758 if the support breaks. Resistance is seen at 6,066, and a move above this level could push prices toward 6,142.

Trading Ideas:
* Crudeoil trading range for the day is 5758-6142.
* Crude oil gains amid prospects of lower U.S. crude stockpiles and concerns over U.S. production in the aftermath of Hurricane Francine.
* BSEE said 12 percent of crude production remained offline in Gulf of Mexico, compared to over 40 percent shut-in.
* Exxon Mobil said it was working to safely restart operations at its Hoover offshore platform in the Gulf.

Natural gas

Natural gas prices declined by 1.45% to settle at 196.5 as U.S. Gulf of Mexico producers gradually resumed operations after Hurricane Francine, easing concerns over supply and triggering profit-taking. About 10% of natural gas output in the Gulf remained offline, down significantly from the 53% that was shut in during the storm’s peak. The U.S. Bureau of Safety and Environmental Enforcement (BSEE) confirmed this progress, alleviating immediate supply fears. Additionally, LSEG's forecast of 134 cooling degree days (CDDs) over the next two weeks, above the seasonal norm of 94, suggests higher-than-usual cooling demand in the near term. Despite this, natural gas demand in the Lower 48 states is expected to rise slightly from 100.0 billion cubic feet per day (bcfd) this week to 100.5 bcfd next week, while supply is anticipated to increase from 101.9 bcfd to 102.2 bcfd. The U.S. Energy Information Administration (EIA) projected a slight dip in U.S. natural gas production in 2024 to 103.4 bcfd, down from a record 103.8 bcfd in 2023, while consumption is forecast to rise to a record 89.9 bcfd in 2024. U.S. utilities added 40 billion cubic feet (bcf) of gas into storage for the week ending September 6, 2024, below expectations of a 49 bcf rise. Total stockpiles now stand at 3,387 bcf, 198 bcf higher than last year and 296 bcf above the five-year average. Technically, the market is under long liquidation, with open interest down by 4.14% to 31,468. Natural gas has support at 193.4, with a potential test at 190.2. Resistance is expected at 202, and a move above could push prices toward 207.4.

Trading Ideas:
* Naturalgas trading range for the day is 190.2-207.4.
* Natural gas fell as Gulf of Mexico producers slowly ramp up production after Hurricane Francine
* About 10% of natural gas output in the U.S. Gulf of Mexico was offline in the aftermath of Francine, the U.S. BSEE said.
* The U.S. EIA said utilities added 40 billion cubic feet (bcf) of gas into storage.

Copper

Copper prices edged down by -0.17% to settle at ?807.95, weighed down by weak economic data from China, including disappointing industrial production, retail sales, and fixed asset investment figures. These factors have dented the demand outlook for copper, a key industrial metal. However, losses were limited by expectations of fresh government stimulus, as Chinese President Xi Jinping called for efforts to achieve the country’s economic goals. Copper inventories in Shanghai Futures Exchange warehouses dropped 13.9% from last week, marking a 45% decline over the past three months, with inventories at their lowest since February. Despite weak demand data, the import discount for copper in China swung to a premium two months ago, now standing at $65 per ton, reflecting tighter supply. Globally, the copper market is expected to remain in surplus through 2025 and 2026, with Macquarie forecasting average prices of $9,100 per ton this quarter, and a recovery expected in the fourth quarter if visible stocks decline. On the production front, Chilean state miner Codelco reported a 10.7% year-on-year decline in copper output for July, while the Escondida mine saw a 29% increase. According to the International Copper Study Group (ICSG), the global refined copper market showed a surplus of 95,000 metric tons in June, up from a 63,000-ton surplus in May, further pressuring prices. Technically, the copper market is experiencing long liquidation, with open interest dropping by 2.45%. Support for copper is seen at ?804.3, and a break below could lead to a test of ?800.7. On the upside, resistance is expected at ?812.5, with a move above potentially testing ?817.1.

Trading Ideas:
* Copper trading range for the day is 800.7-817.1.
* Copper dropped amid disappointing economic data from China
* Chile state miner Codelco produced 111,400 metric tons of copper in July, down 10.7% from a year earlier.
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 13.9% from last Friday.

Zinc

Zinc prices declined by 0.93% to settle at 267.5, pressured by concerns over global economic growth. However, hopes of economic stimulus in China provided some support after President Xi Jinping urged authorities to achieve the country's annual economic goals, raising expectations for more recovery measures. On the supply side, Swedish miner Boliden announced delays and cost overruns for its Odda zinc smelter expansion in Norway. The project, initially set to increase capacity from 200,000 to 350,000 tonnes of zinc annually, will now begin ramping up production at the end of Q1 2025, with full output expected during 2025. In China, exports grew by 4.6% year-on-year in August 2024, marking the slowest growth since April, while imports rose by 2.5%, slightly beating market expectations. Meanwhile, zinc stockpiles in LME warehouses increased by 2.6% in August, reaching 217,575 tonnes. The global zinc market surplus narrowed to 8,700 metric tons in June from 44,000 tons in May, according to the International Lead and Zinc Study Group (ILZSG). China's refined zinc production dropped by 10.3% month-on-month in July to 489,600 metric tons, with heavy rainfall in Sichuan and production cuts in Yunnan, Guangdong, and Guangxi contributing to the decline. Maintenance in key smelting regions like Henan and Inner Mongolia further reduced output. Technically, the zinc market is under long liquidation, with open interest dropping by 6.4% to settle at 2,192 as prices fell. Zinc has support at 265.5, with a potential test of 263.6 if this level is breached. Resistance is seen at 270.8, with a move above possibly pushing prices to test 274.2.

Trading Ideas:
* Zinc trading range for the day is 263.6-274.2.
* Zinc dropped as concerns about global economic growth kept industrial metals under pressure.
* President Xi Jinping pushed for the country to achieve its annual economic target.
* Boliden said the expansion of its Odda zinc smelter in Norway will take longer than expected due to a delay in construction work.

Aluminium

Aluminium prices declined by 0.8% to settle at 229.95 as stockpiles at Japan's major ports rose to 327,300 metric tons by the end of August, an increase of 9.2% from the previous month. However, downside pressure was limited due to several supportive factors. Aluminium supply has been shrinking, with inventories in LME warehouses falling 18% over the last three months, reaching 820,850 tons, the lowest in 18 weeks. Additionally, demand is gradually recovering as the market enters its traditional peak season, leading to expectations of further inventory reduction. In China, aluminium output surged to 3.73 million metric tons in August, the highest monthly output since 2002, driven by higher prices and steady profitability for smelters. Increased production in southwestern Yunnan province, benefiting from ample hydropower supply, further supported this rise. However, aluminium inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.4%, indicating stronger demand. China's August exports of alumina reached 146,708 tons, with 92.5% of that total going to Russia. On the global front, primary aluminium output in July increased by 2.4% year-on-year to 6.194 million metric tons, as reported by the International Aluminium Institute (IAI). Production in China rose 2.5% to 3.69 million tons, while output in the rest of Asia climbed by 3.3% to 408,000 tons. Technically, aluminium is under long liquidation, with open interest dropping by 17.27% to settle at 2,189 as prices fell by 1.85 rupees. Aluminium has support at 228.8, with a potential test of 227.4, while resistance is expected at 232.4, with a move above potentially testing 234.6.

Trading Ideas:
* Aluminium trading range for the day is 227.4-234.6.
* Aluminium dropped as Japan's August aluminium stocks up 9.2% m/m
* However downside seen limited supported by lower inventory, and expectations the Fed will announce a bigger rate cut.
* China's manufacturing data sank to a six-month low last month

Cotton

Cotton prices edged up by 0.17% to settle at 58,670 as the USDA lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales due to crop damage from excessive rains and pest issues. Acreage in cotton for the current kharif season is also down by around 9%, with 110.49 lakh hectares compared to 121.24 lakh hectares last year. Despite these challenges, raw cotton arrivals have begun in Punjab's mandis, offering some support to prices. Cotton exports for the 2023-24 season, ending in September, are projected to rise significantly, with an estimated 28 lakh bales exported, largely driven by demand from Bangladesh and Vietnam. This marks a substantial increase from the 15.50 lakh bales exported in the previous year. On the other hand, cotton imports have risen to 16.40 lakh bales, up from 12.50 lakh bales last year. The Cotton Association of India (CAI) estimates closing stocks as of September 30, 2024, at 23.32 lakh bales, down from 28.90 lakh bales a year ago, while consumption is expected to reach 317 lakh bales. Globally, the U.S. cotton balance sheet for 2024/25 shows lower production, exports, and ending stocks, with U.S. production forecasted at 14.5 million bales, down 600,000 bales from August. World cotton production is reduced by 1.2 million bales, as declines in the U.S., India, and Pakistan offset gains in China. Technically, the market is seeing short covering, with open interest down by 3.42%. Cotton prices are finding support at 58,270, with a potential test of 57,860. Resistance is likely at 59,020, with a move above potentially testing 59,360.

Trading Ideas:
* Cottoncandy trading range for the day is 57860-59360.
* Cotton gains as USDA has lowered India's production forecast for the 2024-25 season to 30.72 million bales.
* Cotton exports for the 2023-24 crop year or season ending September are estimated at about 80 per cent at 28 lakh bales
* The U.S. cotton balance sheet for 2024/25 shows lower production, exports, and ending stocks compared to last month.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.

Turmeric

Turmeric prices remained unchanged at 14,426 as profit booking and increased sowing activity capped upward momentum. In Indonesia, dry weather has accelerated harvesting, pushing farmers to sell turmeric in its wet stage, leading to reduced production. Rising acreage and low export demand could put further pressure on prices. However, the downside is limited by tighter market supplies and emerging buying interest from stockists. Additionally, export opportunities are facing complications due to anticipated volatility in Bangladesh. Sowing activity has surged in key areas, with reports from Erode indicating double the sowing compared to last year. In Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher than last year. Turmeric acreage, which stood at around 3-3.25 lakh hectares last year, is expected to rise to 3.75-4 lakh hectares this year. Despite increased sowing, market participants anticipate lower availability of turmeric during 2025 due to stock depletion and increasing consumption, which may support prices in the longer term. On the export front, turmeric shipments during April-June 2024 dropped by 19.52% year-on-year, with 46,498 tonnes exported compared to 57,775 tonnes in the same period in 2023. Meanwhile, turmeric imports surged by 485.4% year-on-year during the same period, indicating increasing reliance on external supplies. Technically, the turmeric market is under long liquidation, with open interest down by 0.6%. Turmeric is finding support at 14,324, with a potential test of 14,222 if this level is breached. On the upside, resistance is likely at 14,564, with a move above possibly pushing prices toward 14,702.

Trading Ideas:
* Turmeric trading range for the day is 14222-14702.
* Turmeric prices pared gained on profit booking and amid news of increased sowing.
* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.
* However downside seen limited amid tighter supplies in the market and emerging buying from stockists.
* In Nizamabad, a major spot market, the price ended at 14484.15 Rupees gained by 0.84 percent.

Jeera

Jeera prices rose by 0.78%, settling at ?25,915, driven by strong domestic and export demand alongside tight global supplies. Farmers have been holding back their stocks, anticipating better prices, which has further supported the market. However, upside momentum was limited due to expectations of higher production. Jeera production in India is expected to rise by 30% this season, reaching 8.5-9 lakh tonnes, as the sowing area in Gujarat increased by 104%, and Rajasthan saw a 16% rise. Global jeera production has also surged, with China significantly increasing its output to 55-60 thousand tonnes from the previous 28-30 thousand tonnes. Countries like Syria, Turkey, and Afghanistan have also expanded production, which could lead to a decline in prices as these new supplies enter the market. Despite this, Indian jeera exports grew by 46.56% during April-June 2024, reaching 73,770 tonnes compared to 50,335 tonnes in the same period last year. However, monthly exports in June saw a 29.12% decline compared to May 2024 but remained significantly higher than June 2023 figures. Favorable weather conditions and increased sowing areas in major cumin-producing states like Gujarat and Rajasthan have led to record production estimates. Analysts predict increased cumin exports for the year as international prices decline, further supporting export activity. Technically, the market is experiencing fresh buying, with open interest rising by 2.54%. Jeera prices are supported at ?25,660, and a break below this level could see prices testing ?25,400. On the upside, resistance is expected at ?26,120, with potential for prices to test ?26,320 if breached.

Trading Ideas:
* Jeera trading range for the day is 25400-26320.
* Jeera prices gains amid robust domestic and export demand besides tight global supplies.
* Farmers holding back their stocks on expectation of better prices too bolstered prices.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 25677.65 Rupees dropped by -0.03 percent.

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