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Gold

Gold prices experienced a decline of -0.45%, settling at 63389, as profit-booking ensued, driven by signs of recovery in US Treasury yields. Despite this, the overall outlook for gold remains positive, with investors anticipating a reduction in interest rates by the Federal Reserve (Fed) starting in March. Investors are closely monitoring Federal Reserve Chairman Jerome Powell's commentary, as there is a high likelihood of a market reaction to any indications of rate cuts. However, Fed policymakers currently consider rate cut discussions as "premature," expressing a lack of confidence in inflation reaching the target of 2%. On the economic front, the US Department of Labor reported that Initial Jobless Claims (IJC) for the week ending December 22 rose to 218K, exceeding the consensus of 210K and the prior reading of 206K. In China, net gold imports via Hong Kong surged by about 37% in November compared to the previous month, according to Hong Kong Census and Statistics Department data. Net imports into the world's leading gold consumer reached 36.801 metric tons in November, up from 26.793 tons in October, indicating robust demand. From a technical perspective, the market witnessed long liquidation, with a -1.96% drop in open interest to settle at 16033, while prices decreased by -289 rupees. Gold is currently finding support at 63210, and a breach of this level could lead to a test of 63030. On the upside, resistance is expected at 63695, and a move beyond that level might propel prices to test 64000.
Trading Ideas:
* Gold trading range for the day is 63030-64000.
* Gold price eases amid recovery in US Treasury yields.
* The broader appeal for price is bullish as Fed may unwind its restrictive policy stance sooner.
* Fed policymakers see a high likelihood of a market reaction on rate-cut commentary from Fed Chairman Powell.

Silver

Silver experienced a decline of -0.91% yesterday, closing at 74959, attributed to profit booking following earlier gains spurred by expectations of impending interest rate cuts by the US Federal Reserve. Economic indicators revealed a rise in weekly claims to 218K, surpassing estimates of 210K. Additionally, the core PCE index dropped to 3.2% in November from October's 3.4%, below the predicted 3.3%, signaling a downward trend in US inflation. The market sentiment is inclined towards an 88% likelihood of the Fed initiating rate cuts in March, with a 65% chance of further reductions in May, reflecting confidence in the data-driven policy shift. Investors are positioning for early rate cuts as underlying inflation dipped to 3.2% in November, aligning with the Fed's projection for the end of December 2023. The potential for a soft landing is plausible given the steady Unemployment Rate at 3.7%, coupled with consistently lower lay-offs compared to new payroll additions throughout 2023. Technically, the market is witnessing long liquidation, evidenced by a 1.6% drop in open interest to 15260, coupled with a price decrease of -688 rupees. Silver is currently finding support at 74635, and a breach below this level could test 74310. On the upside, resistance is anticipated at 75515, and a breakthrough could propel prices towards 76070. The technical outlook suggests a nuanced market, influenced by both profit-taking and anticipation of future policy measures by the Federal Reserve.
Trading Ideas:
* Silver trading range for the day is 74310-76070.
* Silver falls on profit-taking post price surge on anticipation of Fed rate cuts.
* Economic data showed an increase in weekly claims to 218K, surpassing the estimated 210K.
* The Fed is expected to start reducing interest rates as inflation in US economy is in a downtrend.

Crude oil

Crude oil prices tumbled by 2.62%, settling at 6048, as concerns eased over shipping disruptions in the Red Sea, despite lingering tensions in the Middle East. Maersk's decision to reroute most container vessels through the Suez Canal contributed to the market sentiment. In the US, crude oil stocks surged by 1.837 million barrels, marking the largest weekly gain since November 17th, according to API's Weekly Statistical Bulletin. The US finalized contracts to purchase 3 million barrels of oil for the Strategic Petroleum Reserve (SPR) at an average of $77.31 per barrel, below the 2022 average of $95. About 14 million barrels have been acquired for replenishment after last year's historic sale, with 4 million barrels returning to the SPR by February as borrowed oil is repaid. Meanwhile, Nigerian crude oil exports are expected to average 657,000 barrels per day in February, a slight decrease from the previous month. Technically, the market witnessed fresh selling with a 23.21% increase in open interest, settling at 14304. Despite a drop of Rs 163 in prices, Crudeoil finds support at 5986, and a breach could test 5925 levels. Resistance is anticipated at 6154, and a move above may lead to testing 6261 levels.
Trading Ideas:
* Crudeoil trading range for the day is 5925-6261.
* Crude prices fell as concerns eased about shipping disruptions along the Red Sea route.
* US crude oil inventories rise the most in 5 weeks : API
* US buys 3 million barrels of oil for strategic reserve

Natural gas

Natural gas prices experienced a 2.36% increase, settling at 212.3, primarily driven by forecasts of colder weather and heightened heating demand in January. The surge was further fueled by record amounts of gas flowing to U.S. liquefied natural gas (LNG) export plants. Despite U.S. utilities pulling 87 billion cubic feet of natural gas from storage during the week ending December 22, exceeding market expectations, the drawdown was less than the 195 bcf recorded in the same week the previous year. Meteorologists anticipated warmer-than-normal weather until December 30, followed by a shift to colder-than-normal conditions from December 31 to January 6. This projection, coupled with financial firm LSEG forecasting a dip in U.S. gas demand to 120.5 bcfd this week due to the Christmas shutdown, contributed to the short-term decrease. However, a subsequent rise in demand to 130.7 bcfd was projected for the next week as January was expected to bring colder temperatures. LSEG reported an increase in average gas output in the Lower 48 U.S. states from 108.3 bcfd in November to 108.7 bcfd in December. Gas flows to major U.S. LNG export plants also rose to 14.6 bcfd in December, up from the previous record of 14.3 bcfd in November. From a technical standpoint, the market witnessed short covering, as open interest dropped by -5.12% to 26385 while prices rose by 4.9 rupees. Support for Natural Gas is identified at 205.1, with a potential test of 198 levels if this level is breached. On the upside, resistance is expected at 216.5, and a move beyond could lead to prices testing 220.8.
Trading Ideas:
* Naturalgas trading range for the day is 198-220.8.
* Natural gas gains on forecasts for much colder weather and higher heating demand
* US utilities pulled 87 billion cubic feet of natural gas from storages during the week that ended December 22, 2023
* U.S. gas demand in the Lower 48, including exports, at 120.5 bcfd this week

Copper

Copper prices saw a decline of -0.62%, settling at 734.7, as demand in China weakened due to a recent restocking surge, leading to a shift from premiums to discounts of 110 yuan per ton. China's focus on boosting domestic demand, as outlined in its 14th five-year plan interim report, seeks to expedite economic recovery and ensure stable growth. The emphasis on restoring and expanding consumption, stabilizing bulk consumption, and promoting service consumption aligns with efforts to revitalize the economy. Notably, China's top copper smelters revised their first-quarter guidance for copper concentrate processing treatment and refining charges (TC/RCs) lower, citing mine closures and disruptions affecting supply. The rates, set by the China Smelters Purchase Team (CSPT), decreased to $80 per metric ton and 8 cents per pound, a 16% drop from the fourth-quarter guidance, indicating tightening market conditions. The International Copper Study Group (ICSG) reported a 53,000 metric tons deficit in the global refined copper market for October, slightly lower than the 56,000 metric tons deficit in September. World refined copper output in October stood at 2.34 million metric tons, with consumption at 2.39 million metric tons. From a technical perspective, the market underwent long liquidation, with a -0.94% drop in open interest to settle at 5080, while prices decreased by -4.6 rupees. Copper is now finding support at 732.4, and a breach of this level could lead to a test of 730.2. On the upside, resistance is anticipated at 738.5, and a move beyond may propel prices to test 742.4.
Trading Ideas:
* Copper trading range for the day is 730.2-742.4.
* Copper prices dropped as demand in China was subdued after a burst of restocking seen recently
* China aims to expand domestic demand, ensure speedy recovery, promote stable growth
* China smelters cut Q1 copper guidance price as supply outlook tightens

Zinc

Zinc prices experienced a marginal decline of -0.19%, settling at 231.95, attributed to a global zinc market deficit easing to 52,500 metric tons in October from 62,000 tons in September, according to data from the International Lead and Zinc Study Group (ILZSG). The surplus for the first 10 months of 2023 was 295,000 tons, contrasting with a deficit of 33,000 tons during the same period in 2022. The market's optimism about potential U.S. interest rate cuts in March has been growing, contributing to a bullish sentiment as the U.S. dollar index continues to decline. The industrial outlook for the upcoming year improved with hopes of early interest rate cuts from major central banks and a robust economic recovery in China, the world's top consumer. Despite China reporting another month of factory-gate deflation, the Caixin China General Manufacturing PMI for November 2023 rose to 50.7, indicating a gradual rebound in the sector. Expectations of additional stimulus measures from Beijing and monetary easing by the People's Bank of China (PBOC) further fueled optimism. In November 2023, China's refined zinc output decreased to 579,000 mt, down 4.23% month-on-month but up 10.62% year-on-year. From a technical standpoint, the market observed fresh selling, with a 1.23% increase in open interest to settle at 5015, while prices declined by -0.45 rupees. Zinc is currently finding support at 231.1, and a breach of this level could lead to a test of 230. On the upside, resistance is expected at 233.2, and a move beyond that level might push prices to test 234.2.
Trading Ideas:
* Zinc trading range for the day is 230-234.2.
* Zinc dropped as Global zinc market deficit shrinks in October
* The market's optimism that the U.S. will cut interest rates as early as March continues to grow
* The industrial outlook for the next year improved on hopes of early interest rate cuts from major central banks

Aluminium

Aluminium prices experienced a 0.42% decline, closing at 211.15, attributed to rising inventories in the London Metal Exchange (LME) warehouses. The stockpiles surged by 42,400 metric tons over two days, reaching 551,050, the highest since June 19. This 24% increase in the past two weeks signals an oversupply trend. Meanwhile, China's focus on stimulating domestic demand for economic recovery is evident in its 14th five-year plan. The plan emphasizes restoring and expanding consumption, stabilizing bulk consumption, and promoting service consumption. Additionally, market-oriented reforms and institutional opening up are part of China's strategy for development. In response to an earthquake in Gansu province, neighboring Qinghai, a major aluminum production hub, initiated emergency measures to ensure power supply. Despite the quake, existing aluminum capacity in Qinghai, totaling 2.83 million mt, remains largely operational, with smelters reporting normal activity due to manageable power supply shortages. Technically, the market saw a fresh selling trend with a 0.31% increase in open interest, settling at 4897. Despite the -0.9 rupees downturn in prices, Aluminium finds support at 209.8; a breach could test 208.4 levels. Resistance is anticipated at 212.9, and a move above may lead to a testing of 214.6 levels.
Trading Ideas:
* Aluminium trading range for the day is 208.4-214.6.
* Aluminium dropped as LME inventories in jumped to fresh highs this week.
* Aluminium stocks over the past two days rose by 42,400 metric tons to 551,050, the highest since June 19.
* Aluminum production hub Qinghai issues power rationing emergency plan

Cottoncandy

Cottoncandy faced a marginal decline of -0.32%, settling at 56240, driven by profit-taking following recent gains. The Cotton Association of India (CAI) maintained its pressing estimate for the 2023-24 season at 294.10 lakh bales, contributing to market dynamics. CAI President Atul S Ganatra highlighted that total supply until the end of November was estimated at 92.05 lakh bales, incorporating market arrivals, imports, and opening stocks. Reports indicate a decline in pink bollworm infestation in the cotton crop, reducing from 30.62% in 2017-18 to 10.80% in 2022-23 across various cotton-growing zones. Meanwhile, certified cotton stocks available for delivery against contracts dropped significantly from their peak on December 1st. Brazilian cotton shipments increased by 12% in November compared to October 2023, reaching 253.71 thousand tons but decreased by 5.5% compared to November 2022. The International Cotton Advisory Committee (ICAC) projected a global surplus in cotton production for the second consecutive year, with production expected to grow to 25.4 million metric tons in the 2023-2024 season. The U.S. cotton balance sheet for 2023/24 shows higher production and ending stocks, slightly lower consumption, and unchanged exports. Globally, lower consumption but higher production and stocks are reflected in the 2023/24 balance sheet. In the technical outlook, the market is witnessing fresh selling with a 3% increase in open interest to 206, and prices down by -180 rupees. Cottoncandy has support at 56060, with a potential test of 55880 levels below, while resistance is likely at 56360. A move above this level could lead to testing 56480.
Trading Ideas:
* Cottoncandy trading range for the day is 55880-56480.
* Cotton dropped  on profit booking after prices gained as Cotton output may decline by 8%
* Total supply till end November was estimated at 92.05 lakh bales, which consisted market arrivals of 60.15 lakh bales
* ICAC projected that global cotton production will likely outpace consumption for the second year in a row.
* In Rajkot, a major spot market, the price ended at 26440.85 Rupees dropped by -0.13 percent.

Turmeric

Turmeric prices experienced a modest uptick of 0.41%, settling at 14198, driven by concerns of potential yield losses due to unfavorable weather conditions. However, the upside is constrained as buying activities have been sluggish, anticipating stock releases before the onset of new crops in Jan’24. Pressure on prices is also evident from improved crop conditions owing to favorable weather. Support is found in the form of enhanced export opportunities. The location concerns of PM Modi's Turmeric Board in Telangana have sparked worries among Maharashtra farmers, impacting sentiment. The overall crop condition is deemed satisfactory, with the harvest expected from January to March. Current buying levels and decreasing supplies are anticipated to maintain price stability. Despite a 20–25% expected decline in turmeric seeding, exports have increased by 25%, driven by heightened demand in both developed and emerging nations. In Oct 2023, turmeric exports rose by 11.58%, but a 9.30% drop was recorded compared to Oct 2022. Technically, the market reflects fresh buying, with a 0.86% increase in open interest, settling at 12355. The price is up by 58 rupees. Turmeric finds support at 14124, and a breach below this level could lead to a test of 14052. On the upside, resistance is anticipated at 14274, and a breakthrough above this level might propel prices to test 14352.
Trading Ideas:
* Turmeric trading range for the day is 14052-14352.
* Turmeric gained due to the potential for yield losses caused by the crop's unfavourable weather.
* However, upside seen limited as buying activities has been slower in expectation of new crops.
* While Support is also evident for improved export opportunities.
* In Nizamabad, a major spot market, the price ended at 13312.7 Rupees gained by 1.03 percent.

Jeera

Jeera (cumin) prices witnessed a significant decline of -5.99% to settle at 31695, attributed to optimistic production prospects in Gujarat and Rajasthan. The surge in Jeera sowing, particularly in Gujarat, marked a remarkable increase of 102%, reaching 544,099.00 hectares. Rajasthan also recorded a 13% rise in cumin cultivation, totaling 6.32 lakh hectares. Despite robust sowing activities fueled by favorable weather conditions, the global demand for Indian jeera faced a downturn due to elevated prices, prompting buyers to explore alternatives in Syria and Turkey. The aggressive expansion of Jeera cultivation in India led to a substantial drop in exports during Apr-Oct 2023, plunging by 34.02% compared to the same period in 2022. In October 2023 alone, jeera exports experienced a sharp decline of 46.77% compared to October 2022. Unjha, a major spot market, saw prices settling at 33809.55 Rupees, reflecting a modest decrease of -0.18%. The subdued export scenario is expected to persist in the coming months, influenced by both seasonal trends and the current lack of price competitiveness in the global market. From a technical standpoint, the market is undergoing long liquidation, witnessing a -7.27% drop in open interest to settle at 2601. Despite the decline in prices by -2020 rupees, Jeera finds support at 31220, and a breach below this level could lead to a test of 30750. On the upside, resistance is anticipated at 32630, and a breakthrough above this level might propel prices to test 33570.
Trading Ideas:
* Jeera trading range for the day is 30750-33570.
* 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 33809.55 Rupees dropped by -0.18 percent.

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