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Gold

Gold prices fell by 0.7% to settle at 75,718 as profit booking set in following a recent rally. The decline came after gold had previously gained on increasing confidence that the U.S. Federal Reserve would implement a series of rate cuts in its upcoming decisions. In August, both headline and underlying PCE price indices remained stable, and personal income and spending slowed more than expected, fueling market speculation that the Fed may lower its funds rate to address the softening labor market. Consequently, bets on back-to-back 50bps rate cuts in November have increased, which supports gold prices by reducing the opportunity cost of holding non-interest-bearing assets like bullion.On the global front, China's gold imports via Hong Kong dropped 76% in August to their lowest level in more than two years, as a record rally in prices curtailed demand. China, the world's largest bullion consumer, imported just 6.245 metric tons in August, compared to 25.659 tons in July. Physical gold demand also shrank in key Asian markets, with buyers deterred by the high prices. Discounts in India and China increased, with Indian dealers offering up to $19 an ounce off domestic prices, while in China, discounts ranged between $16 and $7 on global spot prices. Technically, gold is seeing fresh selling pressure, with open interest increasing by 2.81% to 17,887 contracts as prices fell by 535 rupees. Gold is now supported at 75,445, with a potential downside test at 75,165. On the upside, resistance is seen at 76,215, and a move above this could lead to a test of 76,705.

Trading Ideas:
* Gold trading range for the day is 75165-76705.
* Gold dropped on profit booking after prices gained amid rising confidence that Fed will cut rates.
* Both headline and underlying PCE price indices refrained from rising in August
* Physical gold demand contracted in key Asian hubs, as a surge in prices to record highs deterred buyers

Silver

Silver prices settled down by -1.37% at 91,398, as profit booking followed a rally driven by an unexpected U.S. Federal Reserve interest rate cut. The decline came after silver saw strong demand from the industrial sector, particularly for photovoltaic products like solar panels, which have nearly doubled their silver usage over the past year. The year-ahead inflation expectations in the U.S. eased to 2.7% in August 2024, the lowest since December 2020, while the five-year outlook remained at 3.1%, highlighting a mixed inflation scenario. Additionally, consumer sentiment in the U.S. improved, with the University of Michigan revising its consumer sentiment index to 70.1 in September, higher than market expectations. The Federal Reserve's sharper-than-expected 50 basis point rate cut in September was a key factor influencing silver, as FOMC members pointed to a weakening labor market and softer inflation, signaling more potential rate cuts ahead. Silver also found support from new fiscal and monetary stimulus measures announced to boost China’s economy, which is the second-largest in the world. This boosted silver demand, particularly for industrial applications like electrification technologies and solar panels. India, the world’s largest silver consumer, is on track to nearly double its silver imports in 2024, driven by rising demand from solar panel manufacturers and electronics makers. India's silver imports in the first half of 2024 surged to 4,554 metric tons, up from 560 tons a year ago, as industrial buyers stockpiled due to depleted inventories from 2023. From a technical perspective, silver witnessed long liquidation, with a -0.53% drop in open interest. Prices are currently supported at 90,660, with further support at 89,930. Resistance is seen at 92,685, and a break above this level could push prices toward 93,980.

Trading Ideas:

* Silver trading range for the day is 89930-93980.
* Silver dropped on profit booking after a rally catalysed by an outsized U.S. Federal Reserve interest rate cut.
* The year-ahead inflation expectations in US eased for the fourth month to 2.7% in August 2024, the lowest since December 2020.
* The consumer sentiment for the US was revised higher to 70.1 in September 2024, the highest in five month

Crude oil

Crude oil prices increased by 0.55% to settle at 5,694, supported by positive market sentiment driven by China’s new stimulus measures. China's central bank lowered interest rates and injected liquidity into the banking system in an effort to meet its annual growth target of around 5%, which helped bolster confidence in future demand from the world's top oil importer. However, expectations for increased output from Libya and the OPEC+ group tempered gains. OPEC+ is set to raise production by 180,000 barrels per day starting in December, as confirmed by sources within the group. In the U.S., crude oil inventories fell sharply by 4.471 million barrels for the week ending September 20th, significantly more than the expected 1.4 million barrel decrease, according to the EIA Petroleum Status Report. Gasoline stocks also dropped by 1.538 million barrels, while distillate stockpiles, including diesel and heating oil, fell by 2.227 million barrels, both more than market forecasts. However, crude stocks at the Cushing, Oklahoma hub saw a small increase of 0.116 million barrels, following a significant decline in the previous week. On the global front, China's crude oil imports in August fell by 7% year-on-year, as weak refining margins and lower fuel consumption weighed on demand. However, imports improved from the July lows, indicating a potential recovery. For the first eight months of 2024, imports were down by 3.1% compared to the same period in 2023. From a technical standpoint, crude oil saw short covering, with open interest dropping by 2.98%. Support is currently at 5,635, and a break below this could see prices testing 5,575. On the upside, resistance is seen at 5,758, with a potential move towards 5,821 if breached.

Trading Ideas:
* Crudeoil trading range for the day is 5575-5821.
* Crude oil prices rebounded amidst global cheer at the stimulus measures rolled out by China.
* Investors weighed expectations for increased output from Libya and the broader OPEC+ group against fresh stimulus from China.
* OPEC+ will go ahead with plans to increase production by 180,000 bpd each month starting from December.

Natural gas

Natural gas surged by 6.13% to settle at 244.1, driven by Hurricane Helene, which impacted U.S. Southeast regions and led to production cuts in the Gulf of Mexico. The storm knocked out power to millions in Florida, Georgia, and the Carolinas, further tightening supply. Additionally, the Venture Global's Plaquemines LNG export plant in Louisiana is ramping up its output, matching its high of 35 million cubic feet per day from mid-August, supporting prices. U.S. gas production in the Lower 48 states has averaged 101.9 bcfd in September, down from 103.2 bcfd in August, significantly lower than the December 2023 record of 105.5 bcfd. LSEG forecasts suggest gas demand, including exports, will drop from 99.6 bcfd this week to 98.1 bcfd in the next two weeks. Furthermore, flows to the U.S. LNG export plants eased to 12.8 bcfd in September, down from 12.9 bcfd in August. Despite a slight decline in production, U.S. gas consumption is projected to rise to a record 89.9 bcfd in 2024, according to the EIA. Meanwhile, U.S. utilities added 47 billion cubic feet of gas to storage in the week ending September 20, 2024, which was below expectations of 52 bcf, bringing stockpiles to 3,492 Bcf, above the five-year average of 3,259 Bcf. Technically, natural gas is experiencing fresh buying, with open interest increasing by 0.02% to 22,658 contracts as prices rose by 14.1 rupees. Support is currently at 233, with a potential test at 222 levels. On the upside, resistance is seen at 250.2, and a move above this could lead to prices testing 256.4.

Trading Ideas:
* Naturalgas trading range for the day is 222-256.4.
* Natural gas jumped as Hurricane Helene battered the U.S. Southeast after causing Gulf of Mexico producers to cut output.
* Gas output in the Lower 48 U.S. states has fallen to an average of 101.9 bcfd so far in September, down from 103.2 bcfd in August.
* Average gas demand in the Lower 48, will drop from 99.6 bcfd to 98.4 bcfd next week and 98.1 bcfd in two weeks.
 

Copper

Copper prices settled down by -0.7% at 856.25 due to profit booking, following earlier gains driven by hopes of a rebound in China’s economy as officials pledged stimulus measures. China rolled out a significant stimulus package, including lowering interest rates, injecting liquidity into banks, and potentially issuing more than $280 billion in special sovereign bonds to boost economic growth. The premium for importing copper into China remained firm at $65 a ton, indicating robust demand from the world's largest consumer of copper. However, China's industrial profits saw a sharp contraction in August, marking the biggest decline of the year, which highlighted the ongoing struggles in the economy. This poor data strengthened the case for further stimulus, potentially boosting metals prices in the near future. Meanwhile, Europe's largest copper smelter, Aurubis, maintained its copper premium at $228 per ton for 2024 due to weak demand and subdued manufacturing activity in Europe. China’s refined copper exports dropped by 56% in August compared to the previous month, although they were still 50% higher than in August 2023. Refined copper production in China increased by 0.9% year-on-year to 1.12 million metric tons in August. Globally, the copper market showed a surplus of 95,000 metric tons in June, reflecting oversupply in the market. From a technical perspective, the copper market witnessed long liquidation, with open interest decreasing by 6.38%. Prices found support at 852.5, and a break below this level could test 848.8. On the upside, resistance is now likely at 862.8, with a move above potentially testing 869.4.

Trading Ideas:
* Copper trading range for the day is 848.8-869.4.
* Copper dropped on profit booking after prices rose on hopes of Chinese stimulus to boost the economy.
* The premium to import copper into China stayed firm at $65 a ton, indicating solid demand.
* Copper inventories in warehouses monitored by the SHFE fell 14.9 % from last Friday.

Zinc

Zinc prices dropped by 0.57% to settle at 280.9 due to profit booking after a previous rise driven by China’s economic stimulus measures. The People's Bank of China introduced its largest stimulus package since the pandemic to boost the economy, raising market optimism. Despite this, Shanghai Futures Exchange zinc inventories increased by 4.8%, indicating higher supply in the market. Total zinc ingot inventory was at 114,500 mt, with the Shanghai region seeing inventory growth due to increased arrivals of imported zinc and downstream restocking post-holiday. Meanwhile, the Guangdong region saw a significant inventory rise due to higher warehouse arrivals and weak demand. Refined zinc imports in August 2024 were 26,500 mt, marking a 44.24% month-on-month increase but a 9.01% year-on-year decline. Cumulatively, refined zinc imports from January to August were up 30.72% year-on-year. On the supply side, Swedish miner Boliden's delay in the Odda zinc smelter expansion in Norway, now expected in 2025, may lead to tighter supplies in the future. The global zinc market surplus decreased to 14,000 tons in July from 36,400 tons in June, and China’s refined zinc production fell by 0.68% in August due to heavy rains and power rationing in key regions, with some smelters resuming operations after maintenance. Technically, the zinc market is undergoing long liquidation, with a 5.23% drop in open interest to 3,174 contracts. Zinc prices are currently supported at 279.5, with a potential test of 277.9 levels. Resistance is seen at 283.1, and a move above this could lead to prices testing 285.1.

Trading Ideas:
* Zinc trading range for the day is 277.9-285.1.
* Zinc dropped on profit booking after prices rose after China unleashed wide-ranging stimulus measures.
* Refined zinc imports in August 2024 were 26,500 mt, up 8,200 mt or 44.24% MoM
* China unexpectedly leaving benchmark lending rates unchanged at the monthly fixing.

Aluminium

Aluminium prices rose slightly by 0.08% to settle at 239.5, driven by fund buying following fresh economic stimulus measures introduced by China. Ahead of the Golden Week holiday, China rolled out its most aggressive stimulus package since the pandemic, fueling optimism in the market. Fund-driven buying, largely influenced by algorithmic trading, continues to provide support for aluminium, even as similar factors weaken in other metals. Bank of America forecasts a deficit in the global aluminium market next year, with prices potentially reaching $3,000 per ton by 2025. Additionally, tightness in the physical market, as more than half of the LME inventories are earmarked for removal, is supporting prices. Global aluminium production continues to rise. In August, primary aluminium output increased by 1.2% year-on-year to 6.179 million tons, with China contributing 3.69 million tons. Despite this strong production, China's industrial profits swung back to a sharp contraction in August, signaling challenges in demand despite the stimulus measures. China's aluminium exports in August fell slightly by 1.9% from the previous year, though the majority of shipments flowed into Russia. Data from the World Bureau of Metal Statistics shows a global supply surplus of 930,000 tons for the first seven months of 2024. In contrast, China's aluminium output hit its highest level since 2002 in August, driven by high prices and strong profitability for smelters. Technically, the aluminium market experienced short covering, with open interest declining by 3.56%. Prices are supported at 238.2, and a drop below could test 236.9. On the upside, resistance is likely at 241.3, and a move above this level could push prices towards 243.1.

Trading Ideas:
* Aluminium trading range for the day is 236.9-243.1.
* Aluminium rose due to a fund buying triggered by the fresh economic stimulus measures in China.
* China rolled out its most aggressive stimulus package since the pandemic ahead of the Golden Week holiday on October 1-7.
* The global aluminium market will see a deficit next year, BofA said.

Cottoncandy

Cottoncandy prices settled lower by -0.7% at 58,080 due to profit booking, as well as subdued demand and cautious buying from mills. The USDA recently lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales, citing crop damage from excessive rains and pest issues. Additionally, ending stocks were reduced to 12.38 million bales. Acreage under cotton cultivation for the current kharif season has dropped by 9% to 110.49 lakh hectares compared to 121.24 lakh hectares during the same period last year. Cotton exports for the 2023-24 season are expected to increase by 80%, reaching 28 lakh bales due to higher demand from countries like Bangladesh and Vietnam. In comparison, exports during the previous crop year were 15.50 lakh bales. According to the Cotton Association of India (CAI), exports till August reached 27 lakh bales, while imports increased to 16.40 lakh bales, up from 12.50 lakh bales in the previous year. Closing stocks for the current season are projected at 23.32 lakh bales, lower than the 28.90 lakh bales reported last year. On the U.S. front, the cotton balance sheet for 2024/25 reflects lower production, exports, and ending stocks. U.S. production is forecasted at 14.5 million bales, down by 600,000 bales from August due to lower yields in the Southwest. Globally, cotton production is estimated to decline by 1.2 million bales, with reductions in India, Pakistan, and the U.S. offset by a larger crop in China. World trade and consumption are also forecasted to drop. Technically, Cottoncandy is under fresh selling pressure, with a 1.87% increase in open interest. Prices have support at 57,830, with a further drop potentially testing 57,590. Resistance is likely at 58,380, and a break above this level could see prices test 58,690.

Trading Ideas:

* Cottoncandy trading range for the day is 57590-58690.
* Cotton dropped on profit booking amidst low demand and cautious buying from mills.
* 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 declined by 1.24% to settle at 14,362 due to profit booking after earlier gains spurred by concerns over crop damage from heavy rains in the Nanded and Hingoli areas. The damage could be higher than initially estimated, which supports price firmness. Total arrivals dropped to 14,915 bags from the previous session's 16,975 bags, with Sangli reporting a sharp decline from 11,000 to just 890 bags. The combination of low supply and unfavorable weather conditions is expected to push prices higher in the coming weeks, especially with five months still remaining until harvest. However, the upside is capped by reports of increased sowing in key regions like Erode, Maharashtra, Telangana, and Andhra Pradesh, where sowing is estimated to be 30-35% higher than last year. In total, turmeric was sown on about 3.75 to 4 lakh hectares this year, compared to 3 to 3.25 lakh hectares last year. Despite increased sowing, availability may remain tight due to lower production and no outstanding stock for the upcoming season. Turmeric exports between April and July 2024 dropped by 13.97% to 61,609.83 tonnes, compared to the same period in 2023. Imports, however, surged by 429.58% in the same period, reflecting a significant rise in external demand. Technically, the market is under fresh selling pressure, with a 0.19% gain in open interest to 13,405 contracts as prices fell by 180 rupees. Support is seen at 14,104, with a potential test at 13,848. On the upside, resistance is expected at 14,598, and a move above this level could lead to a test of 14,836.

Trading Ideas:

* Turmeric trading range for the day is 13848-14836.
* Turmeric dropped on profit booking after prices gained amid reports of crop damage due to heavy rains
* Total arrivals were reported at 14,915 bags, lower than the previous session's 16,975 bags.
* Turmeric sowing on the Erode line is reported to be double as compared to last year
* In Nizamabad, a major spot market, the price ended at 14678.1 Rupees dropped by -0.22 percent.

Jeera

Jeera prices settled down by -0.48% at 26,860 due to expectations of higher production, which weighed on the market. However, the downside was limited by robust domestic and export demand, alongside tight global supplies. Farmers have been holding back their stocks, expecting better prices, which also lent support. Jeera production is expected to increase by 30% this season, reaching 8.5-9 lakh tonnes, primarily due to a significant rise in the sowing area, with Gujarat's sowing area up by 104% and Rajasthan's by 16%. Global jeera production has surged, led by China, where output more than doubled to 55-60 thousand tons. Increased production is also expected in Syria, Turkey, and Afghanistan, which could further pressure prices as these supplies enter the market. Additionally, reduced export trade has contributed to the price drop, signaling a shift in global market dynamics. In India, favorable weather and increased sowing in major cumin-producing areas like Gujarat and Rajasthan have resulted in record production estimates, with Gujarat's output expected at 4.08 lakh tonnes, a new high. Despite this, trade analysts anticipate a significant rise in exports, potentially reaching 14-15 thousand tonnes in February 2024. From a technical perspective, the market witnessed long liquidation, with open interest dropping by -3.52%. Prices have support at 26,750, and a break below this level could lead to testing 26,650. On the upside, resistance is likely at 27,000, with a potential move towards 27,150 if prices break higher.

Trading Ideas:

* Jeera trading range for the day is 26650-27150.
* Jeera dropped as the expectation of higher production weighed on the prices.
* However downside seen limited amid robust domestic and export demand besides tight global supplies.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 26783.9 Rupees dropped by -0.24 percent.

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