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Gold

The recent uptick in gold prices, settling at 62503 with a 0.14% gain, was triggered by the United States Bureau of Economic Analysis reporting a 4.9% growth in the economy, slightly below earlier estimates. The surprising economic resilience led to a sell-off in the US Dollar, already weakened by expectations of Fed rate cuts. While some investors doubt immediate rate cuts, Philadelphia Fed Bank President Patrick Harker emphasized a potential soft landing but cautioned about possible moderate increases in unemployment. Despite concerns, Atlanta Fed Bank President Raphael Bostic, New York Fed Bank President John Williams, and Patrick Harker expressed openness to rate cuts but ruled out an immediate move. Harker highlighted the struggle of businesses with higher interest obligations as a reason for potential rate cuts next year. Investors are eagerly awaiting the US core PCE price index data for insights into the central bank's interest rate trajectory. Technically, the market exhibits fresh buying momentum, with a 1.08% increase in open interest to 15052 and an 88 rupee price uptick. Gold finds support at 62350, potentially testing 62205, while resistance is likely at 62660, with a breakthrough possibly leading to a test of 62825.
 

Trading Ideas:
* Gold trading range for the day is 62205-62825.
* Gold price picks strength after downbeat final Q3 GDP data, US PCE data still awaited
* A sticky US core PCE report may dampen investors’ short-term appeal for Gold.
* Fed Harker said that rate cuts won’t come sooner that what the market is expecting.

Silver

Silver prices experienced a marginal decline of -0.08% to settle at 75426 as investors carefully analyzed recent economic data and the Federal Reserve's monetary policy stance. Revised figures signaling slower growth in the US economy and corporate profits raised concerns about economic expansion. Despite this, PCE prices in Q3 rose less than expected. The slight increase in Americans filing for unemployment benefits, standing at 205,000, highlighted the tightness in the US labor market, providing flexibility for the Federal Reserve to maintain its terminal rate amid persistent inflation concerns. The US economy expanded by an annualized 4.9% in Q3 2023, slightly below previous estimates, while a report emphasized the ongoing tightness in the job market. Investors are now anticipating the November core PCE index, expecting a 0.2% month-on-month increase with an annual rate decline to 3.3%, its lowest level since 2021. Market projections indicate a 70% likelihood of the Fed implementing the first rate cut in March. From a technical perspective, the market is undergoing long liquidation, with a -0.79% drop in open interest to settle at 14973. Prices have decreased by -60 rupees. Silver is finding support at 75085, and a breach could test 74740 levels. On the upside, resistance is expected at 75805, and a move above may lead to prices testing 76180.
 

Trading Ideas:
* Silver trading range for the day is 74740-76180.
* Silver settled flat as investors assess the latest economic data and Federal Reserve's monetary policy outlook.
* Revised figures indicated slower growth in the US economy and corporate profits, reigniting concerns about economic expansion.
* The number of Americans filing for unemployment benefits edged higher by 2,000 to 205,000 on the week ending December 16th

Crude oil

Crude oil faced a decline of -0.65%, settling at 6134, driven by a surprise build in US crude inventories. This development partially offset concerns about supply disruptions in the Middle East. The U.S. Energy Information Administration (EIA) reported a rise in crude inventories by 2.9 million barrels, contrary to expectations of a 2.3 million-barrel drop. Additionally, U.S. crude oil production reached a record 13.3 million barrels per day, with a weekly increase of 200,000 bpd. The monthly Drilling Productivity Report from the EIA indicated a third consecutive monthly decline in U.S. oil output from top shale-producing regions, projected to drop to 9.692 million bpd in January. Lower production from key regions like Anadarko, Appalachia, and Eagle Ford is expected to contribute to this decline. Ongoing Houthi attacks in the Red Sea disrupting global trade added to market uncertainties. Technically, the market reflects long liquidation with a -6.36% drop in open interest, settling at 11988. Prices saw a decrease of -40 rupees. Crude oil finds support at 6050, and a breach could lead to a test of 5966. Resistance is anticipated at 6221, and a move above may see prices testing 6308.
 

Trading Ideas:
* Crudeoil trading range for the day is 5966-6308.
* Crude oil fell as a surprise build in US crude inventories partially offset concerns about supply disruptions
* U.S. crude stocks, gasoline and distillate inventories rose last week - EIA
* U.S. crude output rises to record 13.3 million bpd – EIA

Natural gas

Natural gas prices experienced a notable uptick, closing 4.41% higher at 215.3 following the Energy Information Administration's (EIA) report of a larger-than-expected storage draw. The withdrawal of 87 billion cubic feet (bcf) exceeded market projections of 80 bcf, contributing to a decrease in stockpiles to 3.577 trillion cubic feet (tcf). While this is 8.5% above the seasonal norm, it remains within the five-year historical range. Despite the surplus, the upcoming weeks may witness a slowdown in storage withdrawals due to forecasts of milder weather and reduced heating demand. However, the production side presents a contrasting picture, with gas output hitting record highs at 108.6 bcfd this month. Looking ahead, the market anticipates a recovery in prices driven by increased gas demand from new LNG export plants in the US, Canada, and Mexico. Delays at certain export plants may, however, pose challenges for 2024 expectations. From a technical standpoint, the market witnessed short covering as open interest dropped by -22.81% to 14489, coupled with a price increase of 9.1 rupees. Key support is identified at 205.1, below which a test of 195 levels is conceivable. On the upside, resistance is likely at 221.1, and a move above could propel prices to test 227.
 

Trading Ideas:
* Naturalgas trading range for the day is 195-227.
* Natural gas edged up after EIA reported a bigger-than-expected storage draw.
* Data showed US utilities pulled 87 billion cubic feet of natural gas from storage last week
* Last week's decrease cut stockpiles to 3.577 tcf, 240 bcf higher than last year at this time and 280 bcf above the five-year average


Copper

Copper prices saw a marginal increase of 0.01%, settling at 726, as investors trimmed bullish positions amidst a failure to sustain fresh highs. The People's Bank of China (PBOC) assured reasonable liquidity and credit growth, stabilizing market sentiment. Physical copper premiums rose, indicating improved spot buying appetite, driven by demand to replenish stocks in China. PBoC maintained lending rates, with the one-year loan prime rate at 3.45% and the five-year rate at 4.2%, signaling stability. However, challenges loom as Anglo American reduced copper production guidance by 20% and 18% for the next two years. LME warehouse copper stocks increased by 8%, reaching 168,650 metric tons since December 6, but the 21% rise in cancelled warrants suggests potential copper leaving the LME system. Technically, the market experienced short covering, evidenced by a -38.27% drop in open interest to 1660, while prices inched up by 0.05 rupees. Support is identified at 723.2, with a potential test of 720.3 if breached. Resistance is expected at 728.5, and surpassing this level could lead to testing 730.9.
 

Trading Ideas:
* Copper trading range for the day is 720.3-730.9.
* Copper prices pulled back as investors shed some of their bullish positions
* China will keep liquidity reasonably ample, keep reasonable credit growth
* Copper stocks in LME warehouses have risen 8% to 168,650 metric tons since Dec. 6

Zinc

Zinc prices declined by -0.84%, settling at 223.5, driven by concerns over oversupply following increased arrivals of the metal into London Metal Exchange (LME) warehouses. The total zinc stocks in LME warehouses reached the highest levels since September 2021, raising worries about excess supply. Data from the International Lead and Zinc Study Group (ILZSG) showed that the global zinc market deficit narrowed to 52,500 metric tons in October from a deficit of 62,000 tons in September. However, for the first ten months of 2023, there was a surplus of 295,000 tons, compared to a deficit of 33,000 tons in the same period of 2022, highlighting the changing supply-demand dynamics. In November, China's refined zinc output decreased by 4.23% month-on-month but increased by 10.62% year-on-year. The total output for January to November reached around 6.03 million metric tons, indicating a substantial year-on-year increase. Domestic zinc alloy output in China also experienced a decline in November due to production halts and overhauls in regions like Shaanxi, Hunan, and Yunnan. Smelters' maintenance activities resulted in significant output reductions. Technically, the market is undergoing long liquidation, with a notable drop of -55.79% in open interest, settling at 836. Zinc is finding support at 222.2, with a potential test of 220.8, while resistance is expected at 225.4, and a move above could lead to testing 227.2.
 

Trading Ideas:
* Zinc trading range for the day is 220.8-227.2.
* Zinc prices dropped on worries about oversupply
* Pressure seen as arrivals into LME warehouses brought the total to the highest levels since September 2021.
* Global zinc market deficit shrinks in October – ILZSG


Aluminium

Aluminium prices experienced a decline of -1.38%, settling at 199.95, driven by an increase in aluminium stocks in London Metal Exchange (LME) warehouses. The LME reported a net inflow of 59,850 metric tons of aluminium, pushing total stocks to 504,475 tons, marking a 13% increase and reaching 2.5-month highs. This surge in stocks suggests surpluses of the metal, commonly used in transport, packaging, and construction. The rise in global primary aluminium output by 2.7% year-on-year to 5.893 million tonnes in November, as reported by the International Aluminium Institute (IAI), added to the bearish sentiment. Demand slowdowns in top consumer China and Europe, coupled with increased Chinese production in the past month due to added capacity, contributed to the market's apprehension. On the supply side, aluminium stocks at major Japanese ports decreased by 3.3% to 330,000 metric tons at the end of November, compared to 341,300 metric tons the previous month. Meanwhile, the People's Bank of China (PBoC) kept lending rates steady in December, maintaining the one-year loan prime rate (LPR) at a record low of 3.45% for the fourth consecutive month. Technically, the market is undergoing long liquidation, with a significant drop of -53.63% in open interest, settling at 735. Aluminium is finding support at 198.9, with a potential test of 197.8, while resistance is expected at 201.8, and a move above could lead to testing 203.6.
 

Trading Ideas:
* Aluminium trading range for the day is 197.8-203.6.
* Aluminium dropped as LME stocks jumped more than 13% to 2-1/2 month highs
* Global aluminium output rises 2.7% year on year in November – IAI
* China's Nov aluminium imports rise amid robust demand, concerns over supply

Cotton

Cotton futures, represented by Cottoncandy, experienced a decline of -0.43%, settling at 55,700. Reports of pink bollworm infestation in the cotton crop have contributed to a reduction in cotton stocks. The infestation, which was at 30.62% during 2017-18, has decreased to 10.80% in 2022-23 across cotton-growing areas in the north, central, and south zones of the country. Certified cotton stocks available for delivery against contracts dropped to 6,325 bales on December 5th, down from their recent high of 87,770 bales on December 1st, according to ICE data.  Global cotton production is expected to surpass consumption for the second consecutive year, with a 3.25% YoY increase to 25.4 million metric tons in the 2023-2024 season, as forecasted by the International Cotton Advisory Committee (ICAC). However, consumption is projected to marginally decline to 23.4 million metric tons. Sluggish demand, reflected in a 5-week low of global cotton bookings reported in the last week of November, exerted downward pressure on cotton futures. The Cotton Association of India (CAI) has revised down its cotton production estimate for the current 2023/2024 season to 29.4 million bales due to pink bollworm infestation in Haryana and reduced production in north Maharashtra. The USDA's November World Agricultural Supply and Demand Estimates report increased anticipated U.S. production by 273,000 bales, raising global ending stocks by 1.6 million bales. Technically, the market is under fresh selling pressure, with a 2.15% increase in open interest to settle at 190. Cottoncandy is finding support at 55,620, with a potential test of 55,540, while resistance is expected at 55,780, and a move above could lead to testing 55,860.
 

Trading Ideas:
* Cottoncandy trading range for the day is 55540-55860.
* Cotton dropped as infestation of pink bollworm has witnessed a decline.
* According to ICE data, certified cotton stocks, dropped to 6,325 bales from their highest level in over two years.
* ICAC projected that global cotton production will likely outpace consumption for the second year in a row.
* In , a major spot market, the price ended at  Rupees dropped by  percent.

Turmeric

Turmeric prices faced a decline of -0.87%, settling at 13,966, as buying activities slowed down ahead of the anticipated release of stocks before the commencement of new crops in January 2024. The market pressure is further fueled by the improved crop condition resulting from favorable weather conditions. Concerns have emerged among farmers in Maharashtra over the location of PM Modi's Turmeric Board in Telangana, impacting market sentiments. Crop conditions are currently satisfactory, and the harvest is expected to be ready from January to March. However, the downside is limited due to potential yield losses caused by unfavorable weather conditions for the crop. Support for the market also comes from improved export opportunities, with a 25% increase in turmeric exports during April-October 2023 compared to the same period in 2022. Expectations of a 20–25% decline in turmeric seeding this year, particularly in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, have been influenced by farmers' shifting priorities. The location concerns regarding PM Modi's Turmeric Board in Telangana are contributing to uncertainties among farmers in Maharashtra. Turmeric exports in October 2023 recorded a gain of 11.58% compared to September 2023, but a drop of 9.30% compared to October 2022. From a technical perspective, the market is undergoing long liquidation, with a 0.71% drop in open interest, settling at 11,940. Turmeric is finding support at 13,838, and a breach could lead to a test of 13,710 levels, while resistance is expected at 14,122, with a move above potentially testing 14,278.
 

Trading Ideas:
* Turmeric trading range for the day is 13710-14278.
* Turmeric dropped as buying activities has been slower in expectation of release of stocks ahead of commencement of new crops
* In Sep 2023 around 9,085.81 tonnes exported as against 11,322.58 tonnes in Aug 2023 showing a drop of 19.75%.
* Expectations for a 20–25 percent decline in turmeric seeding this year
* In , a major spot market, the price ended at  Rupees dropped by  percent.

Jeera

Jeera prices rebounded significantly, registering a gain of 2.61% and closing at 37,900, driven by low-level buying following a recent drop attributed to higher production expectations in Gujarat and Rajasthan. The prospect of aggressive sowing for Jeera in Gujarat and sluggish exports, coupled with a surge in production, had initially put pressure on prices. However, the recent uptick in prices can be attributed to renewed buying at lower levels. Sowing activities for Jeera in Gujarat have seen robust growth, with a staggering increase of nearly 103% reported, reaching 530,030 hectares compared to 261,635 hectares in the same period in 2022. Additionally, there has been a 13% increase in the cumin sowing area in Rajasthan, totaling 6.32 lakh hectares. Global demand for Indian Jeera has declined as buyers prefer other origins like Syria and Turkey due to the relatively higher prices in India. Despite the competitiveness of Indian Jeera prices in the global market, exporters may face challenges due to the current pricing scenario. In October 2023, Jeera exports further declined by 13.39% month-on-month and 46.77% year-on-year, amounting to 6,228.01 tonnes. In Unjha, a major spot market, Jeera prices ended at 38,500.9 Rupees, reflecting a gain of 0.55%. From a technical standpoint, the market is undergoing short covering, with a 0.38% drop in open interest, settling at 3,126. Jeera is finding support at 36,970, and a breach could lead to a test of 36,030 levels, while resistance is expected at 38,630, with a move above potentially testing 39,350.
 

Trading Ideas:
* Jeera trading range for the day is 36030-39350.
* Jeera gains on low level buying after 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 , a major spot market, the price ended at  Rupees dropped by  percent.