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Gold

Gold prices experienced a notable increase of 0.85%, settling at 79,002, following an inflation report that aligned with market expectations. This development has heightened the probability of a Federal Reserve rate cut in the upcoming meeting, with traders now predicting a 96% chance of a 25-basis-point reduction. The U.S. consumer price index rose by 0.3% monthly and 2.7% annually, indicating a steady inflation environment. Meanwhile, the Bank of Canada reduced its key policy rate by 50 basis points, signaling a shift in its monetary policy approach amidst uncertainties regarding potential tariffs from the U.S. In the physical gold market, demand has softened, particularly in India, where gold was sold at a discount for the first time in six weeks due to a weaker rupee. Discounts were also noted in China, while Singapore and Hong Kong saw premiums. Central banks reported significant gold purchases in October, with India leading the way, reflecting a robust demand trend. The World Gold Council noted that global gold demand remained stable year-on-year, driven by investment activity despite a decline in jewelry consumption. From a technical perspective, the market is witnessing fresh buying, with open interest rising by 10.5%. Support levels are identified at 78,430, with potential tests at 77,865, while resistance is anticipated at 79,340, with a possibility of reaching 79,685 if upward momentum continues.

Trading Ideas:

* Gold trading range for the day is 77865-79685.

* Gold gains as inflation data fuels Fed rate cut optimism

* The Bank of Canada slashed its key policy rate by 50 basis points to 3.25% and indicated further cuts would be more gradual

* Investors awaited U.S. Producer Price Index (PPI) data for further direction on monetary policy.

Silver

Silver prices experienced a modest increase of 0.29%, closing at 95,802 amid expectations of a potential interest rate cut by the Federal Reserve. The backdrop of overcapacity in China's solar panel sector has led photovoltaic companies to engage in a self-discipline program aimed at regulating supply, which may dampen silver demand. The recent inflation data in the U.S. showed a slight rise to 2.7% in November, reinforcing market speculation for a 25 basis points rate cut, thereby reducing the opportunity cost of holding silver. The annual core inflation rate remained steady at 3.3%, with service prices slowing down, indicating a mixed inflationary environment. The Silver Institute forecasts a 4% decline in the global silver deficit to 182 million ounces in 2024, driven by a 2% increase in supply against a 1% growth in demand. Despite a significant drop in physical investment, industrial demand and jewelry consumption are expected to bolster overall demand to 1.21 billion ounces. Notably, India's silver imports are projected to nearly double this year, driven by heightened demand from solar and electronics sectors, which could further support global prices. From a technical perspective, the silver market is currently experiencing short covering, with open interest down by 3.08%. Support levels are identified at 94,915, with potential testing at 94,020, while resistance is anticipated at 96,540, with a breakout possibly leading to prices testing 97,270.

Trading Ideas:

* Silver trading range for the day is 94020-97270.

* Silver gains amid bets of a rate cut by the Fed.

* A relatively steady inflation print in the US consolidated bets for the Fed is due to cut its interest rate by 25bps this month.

* The annual inflation rate in the US rose for a 2nd consecutive month to 2.7% in November 2024 from 2.6% in October

Crude oil

Crude oil prices experienced a notable increase of 1.52%, settling at 5934, driven by improved demand prospects and investor expectations of a Federal Reserve rate cut next week. However, OPEC has revised its forecasts for global oil demand growth for 2024 and 2025, marking the fifth consecutive reduction. The organization now anticipates a rise of 1.61 million barrels per day (bpd) in 2024, down from 1.82 million bpd, and a decrease in the 2025 estimate to 1.45 million bpd from 1.54 million bpd. The U.S. is projected to see a significant drop in net crude oil imports, forecasted to fall by 20% to 1.9 million bpd, the lowest since 1971, due to increased domestic production and reduced refinery demand. The Energy Information Administration (EIA) has also adjusted its outlook, predicting global oil demand growth of 1.2 million bpd for next year, which is 300,000 bpd lower than previous estimates. U.S. oil demand is expected to rise to 20.5 million bpd, slightly down from earlier forecasts. U.S. oil production is anticipated to grow modestly, with projections of 13.22 million bpd this year and 13.54 million bpd in 2025. From a technical perspective, the market is showing fresh buying interest, with open interest increasing by 0.66%. Crude oil is currently supported at 5865, with potential testing of 5797 levels if it falls below. Resistance is seen at 5974, with a breakout potentially leading to a test of 6015.

Trading Ideas:

* Crudeoil trading range for the day is 5797-6015.

* Crude oil gains as demand prospects brightened and investors anticipated a Federal Reserve rate cut next week.

* OPEC said it now expects 2024 global oil demand to rise by 1.61 mbpd, down from its forecast of 1.82 mbpd last month.

* US net crude oil imports to fall by 20% in 2025 to lowest since 1971, EIA says

Crude oil

Crude oil prices experienced a 1.52% increase, settling at 5934, driven by improved demand prospects and expectations of a Federal Reserve rate cut. However, OPEC has revised its global oil demand growth forecasts downward for 2024 and 2025, marking the fifth consecutive reduction. The organization now anticipates a rise of 1.61 million barrels per day (bpd) in 2024, down from 1.82 million bpd, and a decrease to 1.45 million bpd for 2025. The U.S. is expected to see a significant drop in net crude oil imports, projected to fall by 20% to 1.9 million bpd, the lowest since 1971, due to increased domestic production and reduced refinery demand. In the natural gas market, prices surged by 7.1% to 286.7, spurred by forecasts of colder weather and rising heating demand. The U.S. has become the largest LNG supplier globally, with average gas output in the Lower 48 states increasing to 102.8 billion cubic feet per day in December. Despite warmer weather predictions, gas demand is expected to decrease slightly next week. The U.S. began the winter heating season with the highest natural gas storage levels since 2016, with inventories 6% above the five-year average. The natural gas market is showing signs of fresh buying, with open interest rising by 9.5% to 18042. Current support is at 274.7, with potential testing of 262.6 levels if it falls below. Resistance is anticipated at 293.3, with a breakout potentially leading to prices testing 299.8.

Trading Ideas:

* Naturalgas trading range for the day is 262.6-299.8.

* Natural gas climbed on forecasts for colder weather and higher heating demand

* Average gas output in the Lower 48 U.S. states rose to 102.8 bcfd so far in December, up from 101.5 bcfd in November.

* U.S. January futures premium over February near record high

Copper

Copper prices experienced a slight decline of 0.13%, settling at 829.55, influenced by reports of potential yuan devaluation by the Chinese government in response to U.S. tariff threats. A weaker yuan could lower the export prices of refined copper, impacting global commodity exchanges. Industrial metals faced pressure amid skepticism regarding China's commitment to large-scale economic support. Notably, Chinese manufacturing activity showed growth in November, particularly among domestic companies. Chile, the largest copper producer, is expected to produce between 5.4 and 5.6 million tons by 2025, with Codelco reporting a production of 127,900 metric tons in October. Concerns over copper concentrate availability were highlighted by agreements between Antofagasta and Jiangxi Copper to reduce processing fees for 2025. Rio Tinto anticipates a significant increase in copper production from its Mongolian assets. The global refined copper market reported a deficit of 131,000 metric tons in September, contrasting with a surplus in August. China's copper imports surged to a one-year high in November, driven by restocking efforts amid declining prices. For the first 11 months of the year, unwrought copper imports increased by 1.7% year-on-year. Technically, the copper market is experiencing long liquidation, with open interest down by 0.89%. Support levels are identified at 825.2 and 820.8, while resistance is seen at 834.9, with potential testing of 840.2 if prices rise further.

Trading Ideas:

* Copper trading range for the day is 820.8-840.2.

* Copper erased gains after reports indicated that the Chinese government is willing to devalue the yuan next year.

* Copper production in Chile, is projected to range between 5.4 and 5.6 million tons in 2025

* The latest data showed that Chinese manufacturing activity expanded in November, especially for domestically-focused companies.

Zinc

Zinc prices settled down by 0.61% at 290.95, influenced by a slight increase in smelter production, which was less impacted by reductions in key regions like Henan and Gansu than anticipated. Notably, production surged in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi. Projections indicate that domestic refined zinc production will rise by over 20,000 mt month-on-month in December 2024, marking a 5% increase, although the cumulative output for the year is expected to decline by over 6% year-on-year. The anticipated production recovery in December is largely due to minor maintenance-related reductions in specific areas, while other regions are set to see production boosts. The outlook for January 2025 remains optimistic, with high smelter production expected. China's economic landscape is under scrutiny, especially following disappointing export growth and shrinking imports in November, raising concerns about the construction sector. The upcoming Central Economic Work Conference is anticipated to provide clarity on future economic targets and stimulus measures. Meanwhile, the global zinc market deficit has slightly decreased, indicating a shift from a surplus in the previous year. From a technical perspective, the zinc market is experiencing long liquidation, with open interest dropping by 9.18%. Current support levels are at 289.6, with potential testing of 288.1. Resistance is identified at 293.2, with a breakout above this level suggesting a test of 295.3.

Trading Ideas:

* Zinc trading range for the day is 288.1-295.3.

* Zinc dropped as smelter production slightly increased.

* The major increase in production came from the higher-than-expected production in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi.

* In December 2024, domestic refined zinc production will increase by over 20,000 mt MoM or about 5% MoM

Aluminium

Aluminium prices experienced a slight decline of 0.29%, settling at 244.75, influenced by a 2.74% year-on-year increase in China's aluminum production. Cumulative production from January to November 2024 rose by 3.86% year-on-year. Despite some domestic smelters undergoing pot maintenance due to high pot age and environmental regulations, the ramp-up of new capacities is expected to boost domestic operating capacity. However, maintenance at a Guangxi smelter is projected to impact 100,000 mt/year capacity, with additional small-scale maintenance anticipated in Sichuan and Chongqing. The Chinese Politburo's shift to a “moderately loose” monetary policy and more proactive fiscal support is expected to bolster economic growth, potentially extending the ambitious 5% GDP target into the next year. This change in rhetoric has led to increased investor confidence, supporting local currency and export bets despite looming tariff threats from the incoming US administration. China's aluminum exports surged by 17% year-on-year in the first ten months, with October alone seeing a 31% increase compared to the previous year. The National Bureau of Statistics reported a 1.6% rise in October's aluminum output, driven by strong demand and improved profitability.  The market is currently experiencing long liquidation, with open interest dropping by 4.12% to 3000. Support is identified at 243.3, with potential testing at 241.8. Resistance is noted at 246.1, with a breakout above this level possibly leading to a test of 247.4.

Trading Ideas:

* Aluminium trading range for the day is 241.8-247.4.

* Aluminium dropped as China’s aluminum production increased by 2.74% YoY.

* China's imports of unwrought aluminium and aluminium products in October slid 8.7% year-on-year to 320,000 metric tons year-on-year

* In November, some domestic aluminum smelters underwent pot maintenance and winter environmental protection-related controls requiring production cuts.

Cottoncandy

Cottoncandy's market showed a slight increase of 0.04%, settling at 54,730, driven by rising cotton yarn prices in South India due to heightened demand from garment industries and robust export orders. However, the USDA reported a significant 47% drop in weekly export sales of upland cotton for the 2024/2025 season. India's cotton production is projected to decline by 7.4% to 30.2 million bales, attributed to reduced planting areas and damage from excessive rainfall. This reduction is expected to impact exports, which are anticipated to fall from 2.85 million bales to 1.8 million bales, while imports may rise to 2.5 million bales from 1.75 million bales. The Cotton Association of India (CAI) highlighted that farmers in Gujarat are shifting to more profitable crops like groundnuts, further decreasing cotton acreage. On a global scale, the U.S. cotton production estimate for 2024/25 has been revised upwards to 14.3 million bales. The world cotton balance sheet reflects increased production, consumption, and ending stocks, with notable contributions from India, Argentina, and Brazil. Rajkot's spot market saw prices drop slightly to 25,703.75 Rupees. Technically, the market is experiencing fresh buying, with open interest rising by 1.26%. Support levels are identified at 54,620, with potential testing at 54,510, while resistance is noted at 54,820, with a possible upward movement to 54,910.

Trading Ideas:

* Cottoncandy trading range for the day is 54510-54910.

* Cotton settled flat as Cotton yarn prices in south India increased due to rising demand

* India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago

* Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA

* In Rajkot, a major spot market, the price ended at 25703.75 Rupees dropped by -0.14 percent.

Turmeric

Turmeric prices fell by 0.61% to settle at Rs.13,952 per quintal, as reports suggest that the crop is in good to excellent condition with minimal weather disruptions. Arrivals increased to 9,030 bags from 7,965 bags in the previous session, with strong arrivals noted in key trading centers like Hingoli and Erode. However, Hingoli markets remained intermittently closed due to the ongoing assembly elections in Maharashtra. Despite the decline, prices are expected to stay firm in the short term due to limited supplies until the arrival of the new crop. Higher acreage is likely to weigh on prices in the longer term. Turmeric sowing in regions like Erode has doubled compared to last year, with states like Maharashtra, Telangana, and Andhra Pradesh estimating a 30-35% increase in sowing. Total turmeric acreage is projected to rise from last year’s 3–3.25 lakh hectares to 3.75–4 lakh hectares this year. While the production for 2024 is estimated at 45–50 lakh bags, prolonged rains have delayed harvesting, potentially impacting the timelines for fresh supplies. Exports during April-September 2024 rose slightly by 0.96% year-on-year to 92,911.46 tonnes, while imports surged 184.73% to 15,742.12 tonnes during the same period. The market witnessed fresh selling, with open interest rising by 4.68% to 8,395 contracts. Turmeric prices have immediate support at Rs.13,862, with a further downside target of Rs.13,774. Resistance is pegged at Rs.14,098, and a breakout above this level could push prices towards Rs.14,246.

Trading Ideas:

* Turmeric trading range for the day is 13774-14246.

* Turmeric dropped as turmeric crop is reported to be in good to excellent condition.

* However downside seen limited on strong buying activity amid reports of low supplies till the arrival of new crop.

* Although crop acreage has improved, delay in harvesting due to prolonged rains may impact the timelines of fresh supplies.

* In Nizamabad, a major spot market, the price ended at 13747.8 Rupees dropped by -0.32 percent.

Jeera

Jeera prices dropped by 1.09% to settle at Rs.23,965 per quintal, driven by profit booking after recent gains. The market has been underpinned by delays in sowing across major producing states like Gujarat and Rajasthan due to higher day temperatures. In Gujarat, only 57,915 hectares of jeera have been sown as of November 25, compared to 2.44 lakh hectares in the same period last year. This represents just 15% of the normal sowing area for the state, with delays estimated at 20-25 days. Rajasthan's jeera cultivation is similarly expected to decline by 10-15%.India’s cumin production for 2023-24 increased to 8.6 lakh tonnes from an area of 11.87 lakh hectares, up from 5.77 lakh tonnes in the previous year. However, production is forecasted to decrease by 10% for the upcoming season. Indian cumin remains the cheapest globally at $3,050 per tonne, significantly lower than Chinese cumin prices, which are $200-$250 higher. This competitive pricing, along with strong international demand from countries like China and Europe, is expected to support the market. Exports during April–September 2024 rose sharply by 70.02% year-on-year to 119,249.51 tonnes, with September exports surging 162.34% compared to the same month last year. The market experienced fresh selling with open interest rising by 1.89% to 2,421 contracts. Prices are currently supported at Rs.23,830, with the next level of support at Rs.23,680. Resistance is expected at Rs.24,200, and a breakout above this level could push prices towards Rs.24,420.

Trading Ideas:

* Jeera trading range for the day is 23680-24420.

* Jeera dropped on profit booking after prices gained as sowing has been delayed.

* Higher day temperatures in the past few weeks has impacted the seeding of jeera and has also led to poor germination in various places.

* In Gujarat, jeera sowing has taken place in only 57,915 hectares till November 25 during the rabi 2024-25 cropping season.

* In Unjha, a major spot market, the price ended at 24591.55 Rupees gained by 0.15 percent.

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