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Gold

Gold prices rose by 0.89% to settle at Rs.80,289 as investors focused on the Federal Reserve's first meeting of 2025. The Fed is widely expected to keep rates unchanged following the 100bps cuts since September, but market participants anticipate a dovish tone from Chairman Powell, given the recent signs of softening inflation. Expectations of two rate cuts in 2025, with a potential first move in May, have further supported bullion as a non-interest-bearing asset. Additionally, trade-related inflationary risks eased as U.S. President Donald Trump softened his stance on tariffs against China, reducing concerns over economic uncertainty. However, China’s net gold imports via Hong Kong plummeted by 84% in December to 5.26 metric tons, compared to 33.07 metric tons in November, as higher prices dampened demand. In India, dealers offered the largest discounts in over six months, rising to $38 per ounce due to subdued purchasing amid speculation of potential changes in the import duty structure in the upcoming budget. Meanwhile, China's central bank continued its gold accumulation, increasing reserves for a second consecutive month in December. The Reserve Bank of India also extended its buying streak, adding 8 metric tons in November, bringing total holdings to 876 metric tons. The market witnessed short covering, with open interest dropping by 19.44% to 3,887 contracts. Gold has immediate support at Rs.79,825, and a break below could test Rs.79,360. On the upside, resistance is seen at Rs.80,540, with a move above potentially pushing prices towards Rs.80,790.
 

Trading Ideas:
* Gold trading range for the day is 79360-80790.
* Gold prices firmed as focus shifted to the Federal Reserve's first meeting of 2025
* President Trump to call for a higher than 2.5% global tariff implementation.
* Commerzbank raises gold price forecast for end of Q1, 2025 to $2,700 per troy ounce


Silver
Silver prices climbed by 0.92% to settle at Rs.91,051 as investors awaited the US Federal Reserve’s policy decision, where rates are expected to remain unchanged. Despite this, concerns over silver demand emerged from China’s solar panel industry, as companies joined a government-led self-discipline program aimed at curbing overcapacity. Additionally, US economic data showed a sharp 2.2% decline in new durable goods orders for December, far below expectations of a 0.6% increase, raising concerns about economic slowdown. Meanwhile, US single-family home prices increased 0.3% in November, slightly above forecasts, reflecting resilience in the housing sector. The global silver deficit is projected to shrink by 4% to 182 million ounces in 2024, as supply grows by 2% while demand expands by 1%, according to the Silver Institute. Industrial demand is expected to reach a record 1.21 billion ounces, driven by increased jewelry consumption and electronics use, despite a 16% drop in physical investment. Supply growth is supported by a 1% rise in mine production from Mexico, Chile, and the US, while silver recycling is set to increase by 5% due to rising western silverware scrap. With silver prices up 32% year-to-date, exchange-traded products (ETPs) are witnessing their first annual inflows in three years, reflecting improved investor sentiment. The market witnessed short covering, with open interest declining by 4.23% to 22,097 contracts. Silver has support at Rs.90,205, with a break below potentially testing Rs.89,365. On the upside, resistance is seen at Rs.91,530, and a move above could push prices towards Rs.92,015.
 

Trading Ideas:
* Silver trading range for the day is 89365-92015.
* Silver gains as investors are preparing for the US Federal Reserve’s policy decision this week.
* New orders for manufactured durable goods in the US fell 2.2% month-over-month to $276.1 billion in December 2024.
* Trump announced plans to impose tariffs on imported computer chips, pharmaceuticals, and steel, aiming to encourage domestic production.


Crude Oil
Crude oil prices rose by 0.63% to settle at Rs.6,340, supported by supply risks in Libya despite concerns over potential U.S. trade tariffs. Protesters have threatened to shut down the Ras Lanuf and Es Sider ports, potentially disrupting hundreds of thousands of barrels of crude exports starting Tuesday. Meanwhile, U.S. trade policies remain in focus, with former President Trump advocating for broad tariffs exceeding 2.5% on foreign goods, including steel, aluminum, and copper, which could impact energy markets. In response to strong demand from China and India, Saudi Arabia is expected to raise its March official selling price (OSP) for Arab Light crude by $2-$2.50 per barrel, marking the highest increase in over a year. U.S. crude oil inventories declined for the ninth consecutive week, falling by 1.02 million barrels, though this was below market expectations of a 2.1 million barrel draw. Distillate fuel stocks fell sharply, while gasoline inventories increased further, according to the Energy Information Administration (EIA). However, the EIA’s Short-Term Energy Outlook suggests oil prices may face downward pressure over the next two years as global supply growth outpaces demand. U.S. oil production is expected to reach a record 13.55 million barrels per day in 2024, with the Permian Basin accounting for over half of the country’s output by 2026. The market witnessed short covering, with open interest dropping by 2.65% to 7,663 contracts. Crude oil has support at Rs.6,290, with a break below potentially testing Rs.6,241. Resistance is seen at Rs.6,412, and a move above could push prices toward Rs.6,485.
 

Trading Ideas:
* Crudeoil trading range for the day is 6241-6485.
* Crude oil gains driven by supply risks in Libya despite concerns over potential US trade tariffs.
* Protesters demanded the closure of two key Libyan ports, Ras Lanuf and Es Sider, threatening significant crude export disruptions.
* Saudi Arabia may hike March oil prices for Asia to highest in over a year


Natural Gas
Natural gas prices dropped by 3.32% to settle at Rs.270.4 as traders factored in the impact of a major winter storm expected to hit parts of the U.S. this week. While cold conditions and snowfall are forecasted for the Southwest, Plains, and Gulf Coast, limited Arctic air has raised doubts about sustained demand. Analysts anticipate a significant 317 billion cubic feet (bcf) gas withdrawal for the week ending January 24, which could bring inventories below the five-year average for the first time since January 2022. However, U.S. utilities withdrew 233 bcf from storage last week, lower than the expected 244 bcf draw, keeping inventories 0.7% above the five-year average. Production in the Lower 48 states fell from 104.2 bcfd in December to 102.0 bcfd in January due to freeze-offs, though output rebounded to 99.3 bcfd after a sharp decline earlier in the week. Meanwhile, liquefied natural gas (LNG) flows are expected to increase with Freeport LNG's Texas facility resuming operations. The EIA projects U.S. gas output to reach a record 104.5 bcfd in 2025, with LNG exports expected to rise from 12.0 bcfd in 2024 to 14.1 bcfd in 2025. Demand is also projected to hit a new high in 2025 before slightly easing in 2026. The market saw fresh selling as open interest surged by 29.95% to 14,665 contracts, indicating bearish sentiment. Natural gas has support at Rs.264.1, with a break below testing Rs.257.7. Resistance is seen at Rs.281.8, and a move above could push prices toward Rs.293.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 257.7-293.1.
* Natural gas dropped as traders anticipated a major winter storm expected to impact parts of the US this week.
* US utilities withdrew 233 billion cubic feet of natural gas from storage to 2,896 bcf.
* Inventories are 1.9% below the corresponding period of the previous year, but remain 0.7% above the ongoing five-year average.



Copper
Copper prices inched up by 0.02% to settle at Rs.827 as market sentiment remained cautious due to geopolitical and economic concerns. U.S. President Donald Trump’s threat to impose tariffs on Colombia weighed on risk appetite, alongside weaker-than-expected economic data from China, a major copper consumer. Manufacturing activity in China unexpectedly contracted, and the services sector showed a sharp slowdown, raising concerns over demand. Additionally, uncertainty ahead of China’s Lunar New Year holiday kept the market subdued. Meanwhile, Freeport-McMoRan reported lower-than-expected fourth-quarter output and warned of a significant drop in first-quarter production, adding supply-side concerns. Chile revised its long-term copper production outlook, forecasting 5.54 million tons by 2034, down from the earlier 6.34 million tons. However, China's imports of unwrought copper surged 17.8% in December to a 13-month high of 559,000 metric tons, signaling increased refinery demand. The global refined copper market showed a deficit of 131,000 metric tons in November, widening from 30,000 metric tons in October, according to the International Copper Study Group (ICSG). Yet, for the first 11 months of 2023, the market remained in surplus by 168,000 metric tons, compared to a 89,000 metric tons deficit a year earlier. Copper is experiencing fresh buying momentum, with open interest rising 11.83% to 6,464 contracts. The metal has immediate support at Rs.824.6, with further downside potential to Rs.822.3. Resistance is at Rs.829.1, and a breakout above this level could push prices towards Rs.831.3.
 

Trading Ideas:
* Copper trading range for the day is 822.3-831.3.
* Copper settled flat dampened by US President Trump’s threat to impose tariffs and sanctions on Colombia.
* The decline was also fueled by disappointing economic data, with manufacturing activity in China, unexpectedly contracting.
* Antofagasta reported a modest 1% rise in its 2024 copper production to 664,000 metric tons.


Zinc
Zinc prices fell by 1.47% to settle at Rs.265.3 as investors remained cautious over U.S. President Donald Trump's tariff and policy plans. However, the downside was limited due to a continuing decline in LME-registered warehouse inventories, which remain at their lowest levels since February 2024. On the demand side, China’s industrial output saw a sharp acceleration in December, and credit aggregates improved, reflecting the impact of the People’s Bank of China’s aggressive monetary stimulus. Despite the overall market deficit, signs of increasing supply weighed on prices. The global zinc market deficit narrowed to 52,900 metric tons in November from 65,400 metric tons in October, according to the International Lead and Zinc Study Group (ILZSG). For the first 11 months of 2024, the global market posted a 33,000-ton deficit, compared to a surplus of 312,000 tons in the same period in 2023. Meanwhile, China’s refined zinc production increased by nearly 10,000 metric tons in December, with further growth expected in January 2025. Domestic refined zinc production is projected to rise by over 15,000 metric tons month-on-month, with smelters in key regions ramping up output despite some maintenance-related cuts and seasonal Chinese New Year slowdowns. Zinc is experiencing fresh selling pressure, with open interest rising by 23.64% to 3,342 contracts. The metal has immediate support at Rs.263.9, with further downside potential to Rs.262.5. Resistance is at Rs.267.8, and a breakout above this level could push prices toward Rs.270.3.
 

Trading Ideas:
* Zinc trading range for the day is 262.5-270.3.
* Zinc dropped as investors looked for clarity on U.S. President Donald Trump's tariff and policy plans.
* The global zinc market deficit in November fell to 52,900 metric tons from 65,400 tons in October.
* Industrial output in China accelerated sharply in December and credit aggregates gained traction



Aluminium
Aluminium prices fell by 0.68% to settle at Rs.247.35 as investors awaited the U.S. Federal Reserve’s policy meeting for guidance on interest rates. Market sentiment fluctuated after former U.S. President Donald Trump hinted at possible trade measures against Colombia, reviving tariff concerns. The Fed is expected to keep rates steady in its upcoming meeting, with potential rate cuts anticipated by June, according to the CME Group’s FedWatch Tool. Meanwhile, the European Union is set to impose sanctions on Russian primary aluminium imports, aiming to consolidate restrictions on metal from Russia following its invasion of Ukraine. Global aluminium production rose 3% year-on-year in December to 6.236 million tonnes, according to the International Aluminium Institute (IAI). In Japan, aluminium stocks at major ports increased by 13.2% in December to 323,600 metric tons, reflecting higher inventories. China's aluminium production surged by 4.2% year-on-year to 3.77 million metric tons in December, with a full-year output of 44.01 million metric tons, up 4.6% from the previous year. The increase was driven by new capacity in Xinjiang, though average daily output in December fell slightly by 1.7% from November. Despite higher production, Chinese aluminium producers faced losses of 687 yuan per ton due to rising costs, marking the first industry-wide losses in three years. The aluminium market remains under selling pressure, with open interest rising by 12.52% to 2,974 contracts. Immediate support is at Rs.246.7, with further downside potential to Rs.246. Resistance is at Rs.248.4, and a breakout above could push prices toward Rs.249.4.
 

Trading Ideas:
* Aluminium trading range for the day is 246-249.4.
* Aluminium dropped as investors looked forward to Fed policy meeting for clues on the interest rate trajectory.
* Global primary aluminium output in December rose 3% year on year to 6.236 million tonnes - IAI
* Aluminium stocks at three major Japanese ports rose to 323,600 metric tons by the end of December, up about 13.2% from the previous month.


Cottoncandy
Cottoncandy prices declined by 0.91% to settle at Rs.52,370, driven by an upward revision in crop projections by the Cotton Association of India (CAI). The trade body increased its 2024-25 output estimate by 2 lakh bales to 304.25 lakh bales, primarily due to higher-than-expected production in Telangana, which saw a revision of 6 lakh bales. However, in North India, production is projected to decline by 3.5 lakh bales. Despite increased supply, demand remains robust, with CAI raising its consumption forecast by 2 lakh bales to 315 lakh bales for the season. The WASDE report further pressured prices by projecting a rise in global cotton production to 117.4 million bales for 2024-25, supported by higher output in India and Argentina. Meanwhile, North Indian states - Punjab, Haryana, and Rajasthan - have seen a 43% drop in kapas arrivals until November 30 compared to last year. This has led some farmers to withhold supply, while ginners and spinners in Punjab face raw material shortages. Despite these factors, downside pressure on cotton prices remains limited due to increased cotton yarn demand from garment industries and strong export orders. As of December-end, total cotton supplies in India stood at 176.04 lakh bales, with consumption reaching 84 lakh bales and exports at 7 lakh bales. The market is experiencing long liquidation, with open interest dropping by 18.85% to 99 contracts. Immediate support is at Rs.52,170, with further downside potential to Rs.51,960. Resistance is at Rs.52,720, and a breakout above this level could push prices towards Rs.53,060.
 

Trading Ideas:
* Cottoncandy trading range for the day is 51960-53060.
* Cotton dropped as CAI has revised upwards its crop projections by 2 lakh bales
* WASDE report projected higher production and ending stocks for the 2024/25 crop year, adding to the downward momentum.
* 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 25452.35 Rupees dropped by -0.69 percent.

 

Turmeric
Turmeric declined by 0.7%, settling at Rs.13,422 due to weak demand and increased arrivals in the spot market. Arrivals more than doubled, rising to 13,190 bags from 6,780 bags in the previous session, with significant volumes seen in major markets like Nizamabad and Hingoli. Prices are expected to remain under pressure as the harvesting season progresses and peak arrivals flood the market within the next month. However, concerns over a 10-15% drop in yields, particularly in the Nanded region, where small rhizomes and crop rots have been reported, are limiting further downside. The actual extent of the crop loss will be confirmed as harvesting accelerates in key producing regions. Export data reflects strong overseas demand, with turmeric exports during April-November 2024 rising by 9.80% to 121,601 tonnes compared to the same period in 2023. However, exports in November 2024 were 12,721 tonnes, down 20.18% from October 2024 but up 48.22% from November 2023. Imports also surged by 101.80% during April-November 2024 to 18,937 tonnes, although November imports dropped 34.84% compared to October 2024, signaling mixed trade dynamics. The market is under fresh selling pressure, with open interest rising by 0.22% to 11,250 contracts. Turmeric is now supported at Rs.13,314, with a break below potentially testing Rs.13,204. Resistance is seen at Rs.13,542, and a move above this level could push prices towards Rs.13,660.
 

Trading Ideas:
* Turmeric trading range for the day is 13204-13660.
* Turmeric dropped on weak demand and marginal improvement in arrivals.
* However downside seen limited amid concerns over slow growth of rhizomes and low yield estimates persist.
* With the arrival of new crop likely to increase after Makar Sankranti, supply is expected to increase.
* In Nizamabad, a major spot market, the price ended at 13519.75 Rupees dropped by -0.65 percent.


Jeera
Jeera edged down by 0.16%, settling at Rs.21,690 due to subdued demand, with current export orders being fulfilled from available stock. However, the downside remained limited as tight supplies continue to provide support. Farmers are holding approximately 20 lakh bags of cumin, but only 3-4 lakh bags are expected to be traded by the end of the season, leaving a significant carry-forward stock of 16 lakh bags. Production for the current season is expected to remain steady at 8.6 lakh tonnes due to favorable crop conditions and improved sowing, as per Spices Board data.  India's position as the world's cheapest supplier of cumin is driving international demand. Indian cumin is currently priced at $3,050 per tonne, while Chinese cumin is $200-$250 higher, making India the preferred sourcing option. Additionally, tensions in the Middle East and the festive season have boosted export orders, especially from Europe. Jeera exports from April-November 2024 surged by 74.04% to 147,006 tonnes compared to the same period in 2023. However, November exports fell by 28.92% month-on-month but saw a year-on-year increase of 42.67%. The market is under fresh selling pressure as open interest rose by 2.39% to 2,439 contracts. Jeera prices are supported at Rs.21,590, with a break below potentially testing Rs.21,480. Resistance is at Rs.21,880, and a move above this level could push prices toward Rs.22,060.
 

Trading Ideas:
* Jeera trading range for the day is 21480-22060.
* Jeera dropped as demand is low and the current export business is being met from the available stock.
* However downside seen limited amid shortage of stocks is contributing.
* 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 22508.75 Rupees dropped by -0.31 percent.

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