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Gold 

Gold experienced a marginal decline of -0.13%, settling at 62557, amidst a day of volatile trading influenced by mixed U.S. economic data. However, this contributed to gold's first weekly decline in four weeks, driven by a stronger U.S. dollar and elevated Treasury yields. The U.S. nonfarm payrolls report revealed a robust increase of 216,000 jobs, surpassing the consensus estimate of 168,000. Despite the positive job figures, the unemployment rate held steady at 3.7%, defying expectations of a slight increase to 3.8%. The stronger-than-expected employment data had an immediate negative impact on gold prices, as the U.S. economy demonstrated ongoing job creation and rising wages, intensifying concerns about inflationary pressures. Physical gold buying in India increased as domestic prices retreated from record highs, while China experienced higher premiums amid expectations of fiscal measures to support the economy. Dealers offered discounts of up to $11 an ounce over official prices in India, a reduction from the previous week's $16 discount. In China, premiums surged to $37-$45 per ounce over spot prices, compared to last week's $23-$38 premiums. Singapore observed $1.50-$2.50 per ounce premiums, slightly higher than the previous week's range. Technically, the market is undergoing long liquidation, evidenced by a significant -6.57% drop in open interest to 12039, accompanied by an 83-rupee decrease in prices. Gold is finding support at 62120, and a breach below could lead to a test of 61680 levels. Resistance is expected at 63040, with a move above potentially driving prices towards 63520.
Trading Ideas:
* Gold trading range for the day is 61680-63520.
* Gold held steady after fluctuating due to mixed U.S. economic data
* US services sector slows in December
* Nonfarm payrolls increase in December

Silver

Silver closed higher by 0.35%, settling at 72587, as the U.S. dollar retreated amid market reactions to key economic data, leading traders to reevaluate their expectations for rate cuts. The ISM Services PMI signaled an unexpected slowdown in the services sector, but the robust jobs report painted a picture of a resilient labor market. U.S. employers added more jobs than anticipated in December while maintaining solid wage growth, challenging market expectations of potential interest rate cuts by the Federal Reserve in March. The Labor Department's Bureau of Labor Statistics reported a growth of 216,000 jobs in December, surpassing expectations. The November payrolls were revised lower from 199,000 to 173,000. This data suggests that the U.S. economy avoided a recession in the previous year and is poised for growth in 2024, supported by the resilience of the labor market, which in turn fuels consumer spending. The unemployment rate held steady at 3.7%, with an influx of individuals into the labor force, partly attributed to increased immigration. Despite the unemployment rate rising from a five-decade low in April, the job market remains robust. Technically, the market underwent short covering, with a notable -9.43% drop in open interest to 21100, accompanied by a price increase of 251 rupees. Silver finds support at 71790, and a breach below may lead to a test of 70985 levels. Resistance is expected at 73405, and a move above could propel prices toward 74215.
Trading Ideas:
* Silver trading range for the day is 70985-74215.
* Silver gains as dollar weakens due to traders adjusting their bets for rate cuts
* ISM Services PMI shows unexpected slowdown in services sector
* Jobs report indicates strong labor market with more workers hired than expected in December

Crude oil

Crude oil recorded a gain of 1.56%, settling at 6128, driven by escalating tensions in the Middle East as U.S. Secretary of State Antony Blinken visited the region amidst the ongoing Israel-Hamas conflict. The Biden administration's move to replenish the Strategic Petroleum Reserve, after significant sales in 2022, also contributed to market dynamics. OPEC's oil output increased in December, rising to 27.88 million barrels per day (mbpd), up 70,000 bpd from November. While Saudi Arabia and other OPEC+ members continued production cuts, Iraq and Angola boosted exports, resulting in an overall output decrease of more than 1 million bpd compared to the previous year. Nigeria increased crude shipments, and the impact of its new Dangote refinery on oil products output is yet to be realized. Euro zone inflation saw a rise in December, and the expectation of further increases in early 2024 may alleviate pressure on the European Central Bank to initiate rate cuts. The U.S. Federal Reserve's latest meeting indicated a sense of control over inflation, with concerns raised about potential risks associated with an "overly restrictive" monetary policy on the economy. Technically, the market experienced short covering, evidenced by a -5.27% drop in open interest to 13182, coupled with a price increase of 94 rupees. Crude oil finds support at 6050, and a breach below may lead to a test of 5971 levels. Resistance is anticipated at 6191, and a move above could propel prices toward 6253. The drop in open interest suggests a reduction in short positions, possibly signaling a shift in market sentiment.
Trading Ideas:
* Crudeoil trading range for the day is 5971-6253.
* Crude oil increased as U.S. Secretary planned to visit the Middle East to address escalating tensions.
* President Biden administration slowly puts oil back into the SPR emergency stash
* OPEC oil output rose in December, as increases in Iraq, Angola and Nigeria offset ongoing cuts by Saudi Arabia.

Natural gas

Natural gas settled higher by 0.25%, closing at 236.5, as forecasts for extreme cold weather in mid-to-late January fueled expectations of increased demand for heating, reaching levels not seen since the record winter storm in December 2022. The anticipation of frigid temperatures leading to heightened heating demand coincided with concerns that extreme cold could disrupt production by causing freeze-offs in oil and gas wells, pipes, and energy equipment. The Energy Information Administration (EIA) reported a weekly decline of 14 billion cubic feet (Bcf) in working natural gas storage across the United States for the week ending December 29. On an annual basis, this figure increased by 553 Bcf, and compared to the five-year average of 3,077 Bcf, it rose by 399 Bcf. The total working gas is currently above the five-year historical range at 3,476 Bcf. The combination of increased demand and potential production disruptions due to extreme cold conditions adds a layer of volatility to the natural gas market. Technically, the market experienced short covering, evidenced by a -3.97% drop in open interest to 19424, coupled with a price increase of 0.6 rupees. Natural gas finds support at 227.8, and a breach below may lead to a test of 219 levels. Resistance is anticipated at 241.4, and a move above could propel prices toward 246.2. The decrease in open interest suggests a reduction in short positions, indicating a potential shift in market sentiment.
Trading Ideas:
* Naturalgas trading range for the day is 219-246.2.
* Natural gas rose as extreme cold weather in mid- to late January is expected
* Working natural gas in storage dropped by 14 billion cubic feet in the week ending December 29.
* Average gas output in the lower 48 U.S. states fell to 107.4 bcfd so far in January

Copper

Copper experienced a decline of -0.59%, settling at 720.7, influenced by a shift in market expectations regarding the timing and scale of potential interest rate cuts by the U.S. Federal Reserve. Initial optimism that the Fed would initiate policy easing in March, boosting copper prices as a key economic indicator, was tempered after the release of minutes from December's policy meeting. The minutes revealed that most policymakers believed that borrowing costs should remain elevated for an extended period, suggesting a March rate cut is less likely. Adding to market concerns were supply tensions driven by low stocks in China, where demand continued to be robust. However, copper inventories in Shanghai Futures Exchange-monitored warehouses saw a 7.2% increase from the previous week, contributing to downward pressure on prices. In Chile, a significant copper-producing country, total copper production fell by 2.34% on an annual basis in November, reaching 442,800 metric tons, according to the country's copper commission Cochilco. The ICSG reported a 53,000 metric ton deficit in the global refined copper market for October, slightly lower than the 56,000 metric ton deficit in September. Technically, the market witnessed fresh selling, with a notable 6.76% increase in open interest to 5800, coupled with a price decrease of -4.25 rupees. Copper is finding support at 718.3, and a breach below may lead to a test of 715.8 levels. Resistance is anticipated at 725.2, and a move above could propel prices toward 729.6.
Trading Ideas:
* Copper trading range for the day is 715.8-729.6.
* Copper dropped due to revised expectations of the Fed’s interest rate cuts
* Chile's total copper production fell 2.34% in November on an annual basis.
* Copper inventories in Shanghai Futures Exchange warehouses rose 7.2%.

Zinc

Zinc closed marginally lower by -0.11% at 225.5, impacted by a 2.8% increase in zinc inventories in Shanghai Futures Exchange-monitored warehouses. However, the downside was mitigated as some Chinese smelters, particularly in Shaanxi, Hunan, and Yunnan, halted production for maintenance, resulting in significant output reductions. Additionally, certain smelters in Inner Mongolia, Shaanxi, Yunnan, Guangdong, and other regions reported decreased output. In contrast, smelters in Sichuan increased production, and those in Gansu concluded maintenance activities, contributing to output growth. In November 2023, China's refined zinc output amounted to 579,000 metric tons, reflecting a 4.23% month-on-month decrease but a year-on-year increase of 10.62%. The cumulative output from January to November reached approximately 6.03 million metric tons, marking a 10.62% YoY growth. Domestic zinc alloy output in November was 93,300 metric tons, down by 4,800 metric tons compared to the previous month. On the global front, the zinc market deficit narrowed to 52,500 metric tons in October from 62,000 tons in September, according to the ILZSG. However, data for the first 10 months of 2023 indicated a surplus of 295,000 tons compared to a deficit of 33,000 tons in the same period of 2022. The technical perspective reveals fresh selling in the market, evidenced by a 1.23% increase in open interest to 3779, coupled with a price decrease of -0.25 rupees. Zinc finds support at 224.6, and a breach below may lead to a test of 223.7 levels. Resistance is anticipated at 226.9, with a move above potentially driving prices toward 228.3.
Trading Ideas:
* Zinc trading range for the day is 223.7-228.3.
* Zinc dropped as inventories in SHFE warehouses rose 2.8% from last Friday.
* Smelters in Sichuan increased production, while smelters in Gansu ended maintenance, leading to a growth in output.
* China's refined zinc output in November 2023 was 579,000 mt, a decrease of 4.23% month on month

Aluminium

Aluminium closed down by -0.32% at 205.45, influenced by China's aluminium production in December 2023 is estimated to be around 3.6 million tons, reflecting a 2.1% increase compared to the previous month and a 3.5% growth from the same month in the previous year. The annual production for 2023 is projected to reach 41.5 million tons, marking a 3.6% year-on-year growth. Despite production cuts in Yunnan province in November due to a dry season, output in December was not impacted. China's domestic aluminium production capacity reached approximately 42 million tons at the end of 2023, showing a 3.88% increase compared to 2022. The People's Bank of China (PBoC) extended CNY 350 billion to state banks, including the China Construction Bank, influencing buying levels for base metals, including aluminium. According to the International Aluminum Institute (IAI), global alumina production totaled 11.858 million tons in November, a 1.9% decline from the revised figure in the previous month. China's aluminium output in November stood at 3.488 million metric tons, marking a 4.6% year-on-year increase. The total aluminium output from January to November reached 37.946 million metric tons, up by 3.6% compared to the same period the previous year. Technically, the market observed fresh selling, with a 0.12% increase in open interest to 4257, accompanied by a price decline of -0.65 rupees. Aluminium finds support at 204.5, and a breach below may lead to a test of 203.3 levels. Resistance is anticipated at 206.6, and a move above could drive prices toward 207.5.
Trading Ideas:
* Aluminium trading range for the day is 203.3-207.5.
* Aluminium dropped as China's December production hiking by 2.1%
* Aluminium output in November decreased due to production cuts in Yunnan province
* Global alumina production in November was 11.858 million tons, a 1.9% decrease from the previous month.

Cotton

Cotton prices saw a marginal decline of -0.18%, settling at 56060, influenced by Brazil's record-high cotton production in the 2022-23 season. The expansion of cultivation and enhanced productivity contributed to a surge in global cotton supply. However, this surge in supply was met with sluggish demand, primarily attributed to unfavorable economic conditions, resulting in elevated inventories and a subsequent reduction in cotton prices worldwide. The Cotton Association of India (CAI) maintained its estimate for the 2023-24 season at 294.10 lakh bales of 170 kg each. Despite concerns about global oversupply, CAI retained its pressing figures based on inputs from cotton-growing state associations and trade sources. Reports of a decline in pink bollworm infestation in the cotton crop in India have emerged, reducing from 30.62% in 2017-18 to 10.80% in 2022-23. This reduction in infestation is a positive development for cotton production in the country. The International Cotton Advisory Committee (ICAC) projected that global cotton production is set to surpass consumption for the second consecutive year. The expected growth in global cotton lint production in the 2023-2024 season is 3.25%, reaching 25.4 million metric tons, while consumption is forecasted to marginally decline to 23.4 million metric tons. In the U.S., the cotton balance sheet for the 2023/24 season reflects slightly lower consumption but higher production and ending stocks. Global cotton balance sheets also show lower consumption but higher production and stocks, with India contributing to increased beginning stocks. Technically, the market is undergoing long liquidation, with a -1.44% drop in open interest, settling at 206. Cottoncandy is finding support at 56000, and a breach below may test 55950 levels. Resistance is anticipated at 56100, and a move above could lead to prices testing 56150. The market dynamics highlight the delicate balance between global supply and demand, with various factors influencing cotton prices in the current economic landscape.
Trading Ideas:
* Cottoncandy trading range for the day is 55950-56150.
* Cotton dropped as Brazil hits record cotton production in 2022-23
* Global cotton production expected to outpace consumption for second year in a row.
* Pink bollworm infestation in cotton crop has declined.
* In Rajkot, a major spot market, the price ended at 26475.6 Rupees gained by 0.06 percent.

Turmeric

Turmeric faced a decline of -2.76%, settling at 13434, primarily driven by sluggish buying activities ahead of the anticipated release of stocks in January 2024, coinciding with the commencement of new crops. The pressure on prices was compounded by the favorable weather conditions, contributing to improved crop conditions. However, the downside remains limited as the crop is at risk of yield losses due to the same weather conditions. The potential for such losses acts as a mitigating factor, preventing a more substantial decline in prices. Despite concerns sparked by the location of PM Modi's Turmeric Board in Telangana, which raised worries among Maharashtra farmers, the overall crop condition is reported to be satisfactory. The harvest is expected to be ready during the period from January to March, supporting the current levels of buying activity and suggesting price stability in the near term. One of the key supports for turmeric prices is the improved export opportunities. However, expectations of a 20–25% decline in turmeric seeding in various regions, including Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, may pose challenges in meeting the growing demand. In terms of technical analysis, the market is currently under fresh selling pressure, with a slight gain in open interest by 0.12%, settling at 12430. Despite this, prices have witnessed a decline of -382 rupees. Turmeric is finding support at 13268, and a breach below may test 13100 levels. On the upside, resistance is anticipated at 13712, and a move above could lead to prices testing 13988.
Trading Ideas:
* Turmeric trading range for the day is 13100-13988.
* Turmeric dropped as buying activities has been slower ahead of commencement of new crops.
* Pressure also seen amid improved crop condition due to favorable weather condition.
* Turmeric exports during Apr-Oct 2023, rose by 2.63 percent at 1,02,162.94 tonnes as compared to Apr-Oct 2022.
* In Nizamabad, a major spot market, the price ended at 13156.9 Rupees dropped by -1.07 percent.

Jeera

Jeera, also known as cumin, experienced a significant decline of -3.44% in its settlement, closing at 28195, primarily attributed to the anticipation of higher production in key regions such as Gujarat and Rajasthan. The aggressive sowing activities in Gujarat, marked by a substantial 102% increase in Jeera sowing, and a 13% rise in cumin area in Rajasthan, have contributed to a surge in production prospects. Favorable weather conditions have facilitated the smooth progress of sowing activities, further boosting output expectations. Despite the robust domestic production, the global demand for Indian jeera has suffered a setback, as buyers have opted for alternative sources like Syria and Turkey due to comparatively higher prices in India. The surge in Indian jeera prices has not translated into increased export activity, with a significant drop of 34.02% in exports from April to October 2023 compared to the same period in 2022. The subdued demand is expected to persist in the upcoming months, aligning with export seasonality. The technical outlook for Jeera indicates a market under long liquidation, with a notable -5.82% drop in open interest, settling at 1698. Despite this, prices have witnessed a decline of -1005 rupees. The current support for Jeera is identified at 27460, and a breach below may lead to a test of 26730 levels. On the upside, resistance is anticipated at 29460, and a breakthrough could propel prices towards 30730.
Trading Ideas:
* Jeera trading range for the day is 26730-30730.
* Jeera prices dropped due to higher production prospects
* In Gujarat, Cumin sowing witnessed very strong growth by nearly 103% with 530,030.00 hectares against sown area of 2022
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 30983.5 Rupees gained by 0.42 percent.

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