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Gold

Gold prices retreated by 0.34%, settling at Rs.85,523, as investors booked profits after hitting a record high. The decline was fueled by concerns over a global trade war following U.S. President Donald Trump's 25% tariffs on steel and aluminum imports. Rising geopolitical tensions also weighed on sentiment as Hamas suspended hostage releases over alleged Israeli ceasefire violations, increasing the risk of conflict in Gaza. Meanwhile, expectations of looser monetary policy are providing support to gold, with markets anticipating two Fed rate cuts in 2024. Additionally, China's central bank increased its gold reserves for a third straight month, bringing total holdings to 73.45 million troy ounces by the end of January. However, gold inventories in London fell 1.7% due to higher shipments to the U.S., where gold futures are trading at a significant premium over spot prices. In India, record-high prices dampened gold jewellery demand, with dealers offering a $31 per ounce discount over official domestic prices. The World Gold Council (WGC) expects India’s gold demand in 2025 to moderate from last year’s nine-year peak of 802.8 tons, forecasting between 700-800 metric tons. Investment demand, however, remains robust, driven by interest in ETFs, digital gold, and coins and bars. Technically, gold is witnessing long liquidation, with a 7.3% drop in open interest to 16,432 contracts. Gold has support at Rs.84,780, with further downside potential to Rs.84,040. On the upside, resistance is at Rs.86,310, and a breakout above could push prices towards Rs.87,100.

Trading Ideas:
# Gold trading range for the day is 84040-87100.
# Gold prices slipped as investors booked profits following a record high.
# Trump substantially raised tariffs on steel and aluminium imports to a flat 25% "without exceptions or exemptions".
# PBoC increasing its reserves for the third consecutive month in January.

Silver

Silver prices fell 0.76%, settling at Rs.94,568, as investors booked profits amid a stronger U.S. dollar and President Donald Trump's 25% tariff on steel and aluminium imports. Market participants are now awaiting U.S. inflation data and Fed Chair Jerome Powell’s testimony, which could shape expectations for monetary policy. The U.S. economy added 143,000 jobs in January, missing the 170,000 forecast, while the unemployment rate stood at 4%, slightly better than expected. Despite the strong labor data, investors continue to anticipate two Fed rate cuts in 2024, aligning with FOMC projections. The Bank of England and RBI also adopted dovish policies, contributing to silver’s appeal. On the supply side, the Silver Institute projects a fifth consecutive market deficit in 2025, driven by rising industrial demand and investment interest. Global silver demand is expected to remain steady at 1.20 billion ounces, with industrial fabrication growing 3% to over 700 Moz due to green economy applications. Physical investment demand is also forecast to rise by 3%, while jewelry demand is set to drop by 6%, primarily due to high prices in India. Silver mine production is expected to hit a seven-year high, growing 2% to 844 Moz, while silver recycling is projected to increase by 5%. Technically, silver is experiencing long liquidation, with a 11.44% drop in open interest to 19,594 contracts. Silver has support at Rs.93,250, with further downside to Rs.91,930. On the upside, resistance is at Rs.95,555, and a breakout above could push prices towards Rs.96,540.

Trading Ideas:
# Silver trading range for the day is 91930-96540.
# Silver dropped on profit booking as dollar index maintained its recent rally.
# A Labor Department report showed the U.S. economy added 143,000 jobs in January, compared with a rise of 170,000 expected
# Investors were also preparing for the release of the latest US inflation figures and comments from Federal Reserve Chair Jerome Powell.

Crude oil

Crude oil prices edged up by 0.47% to settle at 6,367 amid concerns over disruptions in Russian and Iranian oil supplies due to U.S. sanctions. Shipments to key importers like China and India have been significantly affected, leading to supply tightness in the market. Additionally, U.S. sanctions on networks transporting Iranian oil to China have fueled further uncertainty. Despite these concerns, OPEC+ remains committed to its gradual production strategy, keeping existing output cuts until the end of March. Meanwhile, U.S. crude oil imports from Mexico hit a record low of 149,000 bpd, reflecting supply-side changes. According to the U.S. Energy Information Administration (EIA), crude inventories surged by 8.7 million barrels to 423.8 million barrels in the week ending January 31, far exceeding market expectations of a 2-million-barrel build. Gasoline inventories also climbed by 2.2 million barrels, while distillate stockpiles, including diesel and heating oil, fell sharply by 5.5 million barrels, surpassing forecasts of a 1.5-million-barrel drop. The EIA revised its outlook for global oil production in 2025 to 104.4 million bpd, up from 104.2 million bpd, while demand is expected to average 104.1 million bpd, slightly below pre-pandemic levels. Technically, the market witnessed short covering as open interest declined by 27.68% to 3,874 while prices rose by 30 rupees. Crude oil is finding support at 6,309, with a break below possibly testing 6,250 levels. On the upside, resistance is seen at 6,419, and a move above this level could push prices towards 6,470.

Trading Ideas:
# Crudeoil trading range for the day is 6250-6470.
# Crude oil gains amid concerns over Russian and Iranian oil supply and sanctions threats.
# Shipping of Russian oil to leading importers China and India has been significantly disrupted by U.S. sanctions targeting tankers.
# Decisions made by oil producer group OPEC take a long-term view of the global markets and are aimed at providing price stability.

Natural Gas.

Natural gas prices rose by 0.82% to settle at 306.3, driven by increasing flows to LNG export plants and forecasts for colder weather, which boosted heating demand expectations. The U.S. Commodity Futures Trading Commission reported that speculators cut their net long positions for the first time in nine weeks, signaling a shift in market sentiment. U.S. gas output in the Lower 48 states climbed to 106.2 bcfd in February, up from 102.7 bcfd in January, despite recent freeze-offs that temporarily affected production. However, daily output has declined by 1.2 bcfd over the past four days, reaching a one-week low of 105.5 bcfd. Meteorologists project colder-than-normal temperatures across the Lower 48 states through February 25, leading to an expected increase in gas demand from 132.9 bcfd this week to 138.9 bcfd next week. U.S. utilities withdrew 174 bcf of gas from storage in the week ending January 31, exceeding market expectations of 168 bcf. Storage levels now stand at 2,397 bcf, 8% lower than last year and 4.4% below the five-year average. The EIA projects record gas production of 104.5 bcfd in 2025, rising to 107.2 bcfd in 2026, while LNG exports are expected to reach 14.1 bcfd in 2025 and 16.2 bcfd in 2026. Technically, the market witnessed fresh buying as open interest rose by 2.92% to 15,718, while prices gained 2.5 rupees. Natural gas is finding support at 300.6, with a break below potentially testing 294.8 levels. On the upside, resistance is seen at 311.4, and a move above could push prices toward 316.4.

Trading Ideas:
# Naturalgas trading range for the day is 294.8-316.4.
# Natural gas climbed on rising flows to LNG export plants and a drop in daily output.
# US gas storage withdrawals close to record high in January
# US gas production on track for record high in February
 

Copper

Copper prices declined by 1.55% to settle at 853.9, pressured by the U.S. President’s decision to exclude copper from new import tariffs, increasing competition among domestic producers. However, prices remain 15% higher since the start of the year, supported by signs of improving demand. U.S. manufacturing activity expanded for the first time in over two years, raising concerns that the sector’s downturn may have ended. Meanwhile, expectations of strong fiscal stimulus from China have bolstered base metal demand outlooks. China also aims to increase domestic copper ore resources by 5-10% by 2027, signaling long-term investment in supply. The premium of U.S. Comex copper over LME copper surged to a record $920 per metric ton, reflecting tightening supply in the U.S. Chile’s Cochilco maintained its copper price forecast for 2025 and 2026 at $4.25 per pound, expecting prices to remain above $4.00 per pound over the next decade. It also projected a global copper deficit of 118,000 metric tons for 2024, shifting to a surplus of 210,000 metric tons in 2025. Chile’s copper production is expected to grow 4.6% this year to 5.76 million tons and another 3.6% in 2026. The global refined copper market recorded a 131,000 metric ton deficit in November, widening from 30,000 metric tons in October, driven by higher consumption. Technically, the market saw long liquidation as open interest fell by 4.96% to 5,976, while prices dropped by 13.45 rupees. Copper is finding support at 847.7, with a break below potentially testing 841.5 levels. On the upside, resistance is at 862.7, and a move above could push prices toward 871.5.

Trading Ideas:
# Copper trading range for the day is 841.5-871.5.
# Copper fell after US President Trump refrained from placing tariffs on imports of copper, as previously threatened.
# US manufacturing activity unexpectedly expanded for the first time in over two years
# China aims to increase domestic copper ore resources by 5 – 10% by 2027

Zinc

Zinc prices declined by 1.55% to settle at 266.55, pressured by investor concerns over new U.S. tariffs on steel and aluminum, which could slow economic growth and impact metals demand. Meanwhile, Shanghai Futures Exchange zinc inventories surged by 81.8% since the last report on January 24, further weighing on prices. However, the downside remained limited due to supply constraints, as global mined zinc production fell for the third consecutive year in 2024. China’s refined zinc output dropped by 7% due to lower processing rates, impacting overall supply. Additionally, production from the world’s largest Red Dog Mine in Alaska is expected to slow in 2025. LME-registered warehouse inventories remained at their lowest levels since February 2024, supporting prices. The global zinc market deficit in November narrowed to 52,900 metric tons from 65,400 tons in October, according to ILZSG data. For the first 11 months of 2024, the market faced a deficit of 33,000 metric tons, compared to a surplus of 312,000 metric tons in the same period of 2023. In January 2025, China’s refined zinc production increased slightly by 1% month-on-month but fell nearly 8% year-on-year due to maintenance and holiday-related shutdowns. Technically, the market is under long liquidation, with open interest falling by 1.03% to 2,790, while prices dropped by 4.2 rupees. Zinc finds support at 264.7, with a break below testing 262.8 levels. Resistance is seen at 269.3, and a move above could push prices toward 272.

Trading Ideas:
# Zinc trading range for the day is 262.8-272.
# Zinc dropped as investors worried that new U.S. tariffs and a potential global trade war will curb economic growth.
# U.S. President Trump substantially raised tariffs on steel and aluminium imports to a flat 25% “without exceptions or exemptions”.
# Inventories in warehouses monitored by the Shanghai Futures Exchange rose 81.8% from last release on Jan 24
 

Aluminium

Aluminium prices declined by 0.98% to settle at 257.65, weighed down by the gradual resumption of production in China. Domestic operating capacity is expected to rise slowly in February, with January's aluminium production increasing by 3.8% YoY but dipping 0.3% MoM. While most smelters maintained stable production, Shanxi saw cuts of 20,000 mt/year. Meanwhile, Russian-origin aluminium stocks in LME warehouses increased to 67% of total available stocks in January, up from 56% in December, while Indian-origin stocks declined. The European Union's proposal to phase out Russian aluminium imports over a year has raised market concerns. On the supply side, global primary aluminium output in December rose 3% YoY to 6.236 million tonnes, as per IAI data. Japan’s aluminium stocks at major ports rose 13.2% MoM to 323,600 metric tons by December-end. China’s aluminium exports grew by 17% YoY in the first ten months of 2024, reaching 5.5 million tons. Despite higher production, Chinese smelters faced profitability challenges, with average losses of 687 yuan per ton, the first negative margin in three years. For 2024, China’s total output stood at 44.01 million metric tons, marking a 4.6% YoY rise. Technically, the market is witnessing long liquidation, as open interest dropped by 16.24% to 3,512 while prices fell by 2.55 rupees. Aluminium has support at 255.8, with a break below likely testing 253.8 levels. Resistance is now seen at 261, and a move above this level could push prices toward 264.2.

Trading Ideas:
# Aluminium trading range for the day is 253.8-264.2.
# Aluminium dropped amid resumption of aluminium production in China
# China's aluminum production in January 2025 (31 days) increased by 3.8% YoY
# Russian aluminium stocks in LME warehouses available to the market rose in January from December.

Cottoncandy

Cottoncandy prices declined by 0.33% to settle at 53,830 as market sentiment turned bearish following an upward revision in India's cotton crop projections by the Cotton Association of India (CAI). The association raised its forecast by 2 lakh bales to 304.25 lakh bales for the 2024-25 season, driven by higher output in Telangana. However, consumption estimates were also increased by 2 lakh bales to 315 lakh bales, reflecting robust demand. Meanwhile, cotton arrivals in north India declined sharply by 43% year-on-year till November 30, leading to supply constraints and concerns among market participants. Brazil's cotton production forecast for 2024-25 was revised lower to 3.79 million tonnes from 3.83 million tonnes due to reduced acreage in Mato Grosso. The WASDE report projected higher global cotton production and ending stocks, adding pressure to prices. Global production is expected to increase by 1.2 million bales to 117.4 million bales, mainly due to higher output in India and Argentina. Despite supply concerns in some regions, rising demand from garment industries and strong export orders supported yarn prices in South India, limiting the downside in cotton prices. Technically, the market is under long liquidation, with open interest dropping by 1.17% to 253 while prices declined by 180 rupees. Cottoncandy finds support at 53,800, and a break below could push prices to 53,780. On the upside, resistance is seen at 53,840, with a move above potentially testing 53,860 levels.

Trading Ideas:
# Cottoncandy trading range for the day is 53780-53860.
# Cotton dropped as CAI has revised upwards its crop projections by 2 lakh bales of 170 kg each
# Brazil's 2024-25 cotton production forecast was revised down to 3.79 million tonnes from 3.83 million tonnes in December
# Global cotton production is projected to rise by more than 1.2 million bales to 117.4 million bales.
# In Rajkot, a major spot market, the price ended at 25406.4 Rupees gained by 0.23 percent.
 

Turmeric

Turmeric fell by 0.12% to 13,228, as weak demand and rising arrivals weighed on prices. With harvesting progressing and the bulk of the crop expected in the next month, the market remains under pressure. However, lower yield estimates of 10-15% due to crop issues in Nanded are offering some downside support. Farmers continue to report slow rhizome growth and concerns over quality, but the exact impact will be clearer as harvesting picks up. Arrivals in the spot market surged to 13,190 bags, nearly doubling from 6,780 bags in the previous session, with higher arrivals reported in Nizamabad and Hingoli. This influx is expected to keep pressure on prices in the near term. On the export front, turmeric exports from April to November 2024 increased by 9.80% to 121,601.21 tonnes, compared to 110,745.34 tonnes in the same period last year. However, November exports dropped 20.18% from October 2024, but still showed a 48.22% rise compared to November 2023. On the import side, turmeric imports rose significantly by 101.80% year-on-year, but November imports declined 34.84% from October levels. Technically, turmeric is under fresh selling pressure, with open interest rising by 0.29% to 12,170 contracts. Support is seen at 13,152, and a break below could test 13,076. Resistance is at 13,312, and a move above this level could push prices toward 13,396.

Trading Ideas:
# Turmeric trading range for the day is 13076-13396.
# Turmeric dropped on weak demand and marginal improvement in arrivals.
# However downside seen limited as new crop yields are expected to be 10-15% lower this year.
# Farmers have indicated that the yield may be lower than expected.
# In Nizamabad, a major spot market, the price ended at 13213.15 Rupees dropped by -0.91 percent.

Jeera

Jeera prices rose 2.6% to Rs.20,705, driven by low-level buying after recent price drops. Despite weak demand, the export business is being fulfilled through existing stocks. Farmers still hold around 20 lakh bags, with only 3-4 lakh bags expected to be traded by season-end, leaving a carry-forward stock of 16 lakh bags. The production for the 2023-24 season is estimated at 8.6 lakh tonnes, significantly up from 5.77 lakh tonnes the previous year, thanks to improved sowing and favorable crop conditions. However, a limited downside is expected due to stock shortages. Global demand remains strong, with Indian cumin being the cheapest in the world at $3,050 per tonne, compared to Chinese cumin, which is $200-250 higher. This pricing advantage is expected to attract large-scale purchases, including from China. Additionally, Middle East tensions have boosted demand for Indian jeera, benefiting exporters in Gujarat. Festive season demand in Europe and other international markets has further supported prices. India's jeera exports surged 74.04% to 147,006.20 tonnes during Apr-Nov 2024, compared to 84,467.16 tonnes a year earlier. However, November exports fell 28.92% to 11,555.56 tonnes from October’s 16,257.44 tonnes. Technical Outlook: Jeera saw fresh buying, with open interest rising 1.67% to 2,745 lots, while prices gained Rs.525. Support is at Rs.20,150, with a break below testing Rs.19,580. Resistance is seen at Rs.21,040, with an upward move potentially testing Rs.21,360.

Trading Ideas:
# Jeera trading range for the day is 19580-21360.
# Jeera gained on low level buying after prices dropped as demand is low.
# However, only 3-4 lakh bags are expected to be traded by the end of the season, leaving a carry-forward stock of about 16 lakh bags.
# The current season is expected to have similar production levels as last year due to better crop conditions and good sowing.
# In Unjha, a major spot market, the price ended at 20454.8 Rupees gained by 0.32 percent.

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