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Gold

Gold faced downward pressure, dropping by -0.46% to settle at $58,432, primarily due to the strong US dollar hitting 2023 highs. The catalyst behind this was the looming possibility of another US interest rate hike within the year. The US 10-year treasury yields surged by 0.6%, reaching a 16-year peak at 4.564%, following the Federal Reserve's clear indication of an impending rate hike and a lower-than-expected projection of two rate cuts in 2024. Fed officials hinted at more rate hikes, emphasizing the ongoing battle with inflation. Investors are closely monitoring US personal spending data to gauge inflation and anticipate future US policies. Meanwhile, China's net gold imports via Hong Kong surged by 51.4% in August, marking a significant increase from July. Total gold imports through Hong Kong also saw a substantial uptick of 49.6% to 45.237 metric tons. From a technical perspective, the market experienced long liquidation, with a 24.15% drop in open interest, settling at 4,186. Gold's price declined by -269 rupees. Support levels are at 58,310 and 58,185, while resistance is anticipated at 58,655, with a potential upward move testing 58,875.

Trading Ideas:

* Gold trading range for the day is 58185-58875.

* Gold dropped as dollar rose amid expectations of another US interest rate hike this year.

* US 10-year treasury yields extending gains for the second straight session and scaling a 16-year high at 4.564%.

* Several Fed officials hinted at several more interest rate hikes, and said the battle with inflation isn't over yet.

Silver

Silver faced a setback, declining by -0.52% to close at 71,777. This drop can be attributed to rising Treasury yields and a stronger dollar, as investors anticipate the Federal Reserve's commitment to maintaining higher interest rates. Chicago Fed President Austan Goolsbee emphasized that the risk of inflation surpassing the Fed's 2% target remains a concern, outweighing worries about a potentially slowing economy. In the housing market, the United States saw a significant 8.7% decline in new single-family home sales in August 2023, the sharpest drop since September 2022. This slump, down to an annualized rate of 675,000 sales, reflects the impact of surging mortgage rates, indicating the Federal Reserve's aggressive rate hikes are affecting the third quarter more significantly. On a positive note, building permits in the US rose by 6.8% to 1.541 million in August, marking the highest level since October 2022. This suggests that new construction is thriving, driven by a shortage of available homes in the market, despite rising mortgage rates dampening housing demand. From a technical standpoint, the silver market is experiencing fresh selling pressure, with a 7.35% increase in open interest, settling at 19,485. Silver's price dropped by -373 rupees. Key support levels are at 71,500 and 71,215, while resistance is expected at 72,110, with the potential for a price test at 72,435.

Trading Ideas:

# Silver trading range for the day is 71215-72435.

# Silver dropped as Treasury yields and the dollar rose

# Treasury yields at 16-year peak

# Inflation staying above the Fed's 2% target remains a greater risk than tight central bank policy slowing the economy.

Crude oil

Crude oil saw a 0.99% increase, settling at 75.43, driven by expectations of a tighter supply for the remainder of the year. Russia and Saudi Arabia's decision to extend production cuts through year-end contributed to the supply constraints. Additionally, money managers increased their net long positions in US crude futures and options. Concerns lingered over demand uncertainties in China, the world's leading crude importer, although recent data suggested some economic stabilization. However, the oil and gas rig count in the US fell by 11 to 630, reaching its lowest level since February 2022, indicating a decline of 18% compared to the same time last year. This drop in rigs is driven by lower oil and gas rig counts. Despite the challenges, higher oil prices are expected to boost US crude production, with projections from the Energy Information Administration (EIA) estimating a rise from 11.9 million barrels per day in 2022 to 12.8 million in 2023 and 13.2 million in 2024. From a technical standpoint, the crude oil market is witnessing fresh buying interest, with a 15.01% increase in open interest, settling at 7,755 contracts. Crude oil prices gained 74 rupees. Key support levels are at 7411 and 72.9, while resistance is expected at 7616, with the potential for prices to test 7689.

Trading Ideas:

* Crudeoil trading range for the day is 7279-7689.

* Crude oil gains amid expectations of tighter supply for the rest of this year.

* Oil supply remains tight as Russia and Saudi Arabia have extended production cuts to the end of the year.

* Speculators raise U.S. crude oil net longs – CFTC

Natural gas

Natural gas prices experienced a decline of -1.66%, settling at 237.1. This drop was attributed to reduced gas supply to the nation's LNG export facilities, despite robust demand expectations. Gas production in the US dipped to 102.11 billion cubic feet per day (bcfd) in September, down from the August record of 102.3 bcfd. Furthermore, the oil and gas rig count, which signals future output trends, fell by eleven to 630 in the week ending September 22nd. In Romania, there's positive news as natural gas reserves for the cold season are nearly 95% filled, surpassing the targeted level of 90%. Weather forecasts for the Lower 48 states predict above-average temperatures for the next 15 days. US gas demand, including exports, is projected to remain relatively stable, ranging from 94.7 billion cubic feet per day (bcfd) this week to 94.9 bcfd next week, according to data provider LSEG. The average gas output in the Lower 48 US states eased to 102.1 bcfd in September, down from the record high of 102.3 bcfd in August. From a technical perspective, the natural gas market is witnessing fresh selling pressure, with a 19.91% increase in open interest, settling at 23,008 contracts. Natural gas prices dropped by -4 rupees. Key support levels are at 233.6 and 231.0, while resistance is expected at 241.2, with the potential for prices to test 245.2.

Trading Ideas:

* Naturalgas trading range for the day is 230-245.2.

* Natural gas dropped amid less gas flowing to the LNG export plants.

* Gas production in the US eased to 102.11 bcfd in September, down from the August record of 102.3 bcfd.

* Romania's natgas reserves nearly 95% filled

Copper

Copper prices faced a decline of -0.23%, settling at 712.25. Several factors contributed to this drop, including the Federal Reserve's cautious stance, concerns about a potential U.S. government shutdown, and worries about reduced industrial demand due to a slowing Chinese economy. Additionally, rising bond yields and a stronger dollar reduced the appeal of copper. In its recent meeting, the Federal Reserve indicated the likelihood of one more interest rate hike in 2023 and a more gradual easing of monetary policy in 2024, signaling a prolonged period of elevated interest rates. Moreover, tensions heightened over ongoing federal budget negotiations, with a looming deadline of October 1st. In China, the property sector faced further trouble as the major developer Evergrande missed a payment. Commerzbank noted some improvements in the copper supply outlook but acknowledged increased downside risks to its year-end copper price forecast, which was previously set at $8,800 per ton. On a positive note, Southern Copper, controlled by Grupo Mexico, anticipates a 17% increase in copper production in Peru this year, reaching 400,000 metric tons, contributing to the company's overall output growth. This comes after a decline in copper output last year due to community protests disrupting operations at its Cuajone mine. From a technical perspective, the copper market is witnessing fresh selling pressure, with a 5.03% increase in open interest, settling at 8,652 contracts. Copper prices dropped by -1.65 rupees. Key support levels are at 708.3 and 704.4, while resistance is expected at 715.9, with the potential for prices to test 719.6.

Trading Ideas:

* Copper trading range for the day is 704.4-719.6.

* Copper dropped amid renewed concerns about demand amid slowing Chinese economy.

* Southern copper sees Peru output hitting 400,000 T this year

* Commerzbank notes that there have been noticeable improvements in the supply outlook for the copper market.

Zinc

Zinc prices dipped by -0.6% to 223.4, driven by concerns about demand in China, the world's top metals consumer. Additionally, pressure from a strong dollar and expectations of higher interest rates contributed to the decline. Data from the International Lead and Zinc Study Group (ILZSG) showed that the global zinc market surplus narrowed to 17,400 metric tons in July, down from 75,900 tons the previous month. However, for the first seven months of the year, there was still a surplus of 495,000 metric tons compared to 199,000 tons in the same period last year. Commerzbank predicts a sideways trend for zinc prices due to subdued prospects for the Chinese real estate market, which has a significant impact on zinc demand. Social inventories of zinc ingots in China decreased slightly to 91,400 mt, driven by pre-holiday stockpiling in various regions. In August 2023, China's refined zinc output decreased by 4.46% month-on-month but increased by 13.78% year-on-year, falling below expectations. From a technical standpoint, the market is experiencing long liquidation, with a decrease in open interest by -0.3% to 4,337. Prices have dropped by -1.35 rupees. Support levels for Zinc are at 221.9, with the potential to test 220.4. Resistance is expected at 225.8, with the possibility of prices testing 228.2.

Trading Ideas:

* Zinc trading range for the day is 220.4-228.2.

* Zinc dropped due to concerns about demand in China

* Global zinc market surplus falls in July – ILZSG

* Commerzbank suggests that the zinc price is likely to trend more or less sideways

Aluminium

Aluminium prices increased by 0.37% to 205.75, finding some support amid concerns about instability in China's property development sector. Missed bond payments by Evergrande and Country Garden raised fears of financial contagion, impacting the outlook for construction materials. Commerzbank is confident in predicting an aluminium price of $2,400 per ton by the end of 2023, driven by strong demand from China, a major consumer of aluminium. China, the world's largest producer of aluminium, has halted the expansion of production capacity to prevent oversupply and high energy consumption from old infrastructure. Indonesia's ban on bauxite exports, a key aluminium ore, adds to potential supply pressures. The demand for solar panels and electric vehicles in China is expected to offset the decline in aluminium usage in construction, indicating a rebound in purchasing activity. Global primary aluminium production reached a record high in August, with smelters running at an annualized rate of 71.2 million metric tons. Technically, the market is experiencing short covering, with a decrease in open interest by -0.68% to 3,924. Prices have risen by 0.75 rupees. Support levels for Aluminium are at 204.6, with the potential to test 203.3. Resistance is expected at 206.7, with the possibility of prices testing 207.5.

Trading Ideas:

* Aluminium trading range for the day is 203.3-207.5.

* Aluminium gains on low level support after pressure seen amid mounting concerns about instability from Chinese property developers.

* Commerzbank expresses confidence in predicting an aluminum price of $2,400 per ton at the end of 2023.

* China, halted the expansion of production capacity beyond the current limit of 45 million tons as Beijing attempts to prevent oversupply

Cotton

Cottoncandy prices held steady at 60520, with concerns over Chinese demand affecting investor sentiment. The cotton belt in Haryana is battling pink bollworm infestation, adding to market worries. Globally, the cotton industry is grappling with significant reductions in both production and consumption, as indicated in the 2023-24 Cotton Outlook. In the U.S., cotton projections for 2023/24 show increased beginning stocks but decreased production, exports, and ending stocks. Unexpectedly high warehouse stocks in July 2023 led to increased beginning stocks for 2022/23. U.S. cotton production is expected to be 860,000 bales lower this month, with declines in the Southeast and Southwest. Consumption remains unchanged, but exports are down by 200,000 bales, and ending stocks are 100,000 bales lower. The projected season-average price for upland cotton in 2023/24 is 80 cents per pound, up 1 cent from the previous month. Globally, the 2023/24 world cotton projections include reduced beginning stocks, production, consumption, trade, and ending stocks compared to the previous month. India is expected to produce 330-340 lakh bales of cotton in the upcoming 2023-24 season, starting on October 1, according to J. Thulasidharan, president of the Indian Cotton Federation. Sowing has already covered 12.7 million hectares. In the current season, 335 lakh bales of cotton have arrived in the market, with more expected before the season ends. However, cotton cultivation in Telangana faced challenges due to unfavorable seasonal conditions, resulting in reduced cotton area. Cotton picking is set to pick up in northern states in November. In the major spot market of Rajkot, prices closed at 29020.3 Rupees, with a slight drop of -0.09%. Technically, the market is undergoing long liquidation, with open interest unchanged at 101. Prices have remained stable at 0 rupees. Support levels for Cottoncandy are at 60260, with the potential for a test of 60000. Resistance is expected at 60780, with a chance of prices testing 61040.

Trading Ideas:

* Cottoncandy trading range for the day is 60000-61040.

* Cotton settled flat as concerns over demand from China dominated sentiment among investors.

* India is expected to see production of 330 lakh to 340 lakh bales in 2023-2024 that begins on October 1.

* China's cotton production was lowered to 5.9 million metric tons on reduced planted area for 2023/24

* In Rajkot, a major spot market, the price ended at 29020.3 Rupees dropped by -0.09 percent.

Turmeric

Turmeric prices experienced a significant drop of -2.83% to 13680, primarily due to increased offerings following recent rains that are expected to benefit standing crops. Although this rainfall is positive for crop growth, turmeric supplies remain constrained. Furthermore, a decrease in turmeric cultivation in Maharashtra adds uncertainty to price trends and supports higher prices. Export inquiries have been muted, adding pressure to prices. Farmers have shifted focus, leading to expectations of a 20-25% decrease in turmeric sowing this year in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. On the export front, turmeric exports from April to July 2023 increased by 15.05% compared to the same period in 2022. However, in July 2023, turmeric exports declined by 24.60% from June, though they showed a rise of 8.05% compared to July 2022. The upcoming week is expected to bring normal to above-normal rainfall to Maharashtra and Telangana, further supporting turmeric crop growth. However, concerns persist due to limited supply and reduced cultivation. In the major spot market of Nizamabad, prices closed at 13337.25 Rupees, marking a decrease of -1.15%. From a technical perspective, the market is witnessing fresh selling, with open interest increasing by 0.75% to 14140. Prices have dropped by -398 rupees. Support levels for turmeric are at 13464, with the possibility of further testing down to 13250. Resistance is expected at 13988, with potential for prices to test 14298.

Trading Ideas:

* Turmeric trading range for the day is 13250-14298.

* Turmeric dropped due to increased offerings in the wake of reports that recent rains may be helpful for standing crops.

* Supplies are down whereas production prospects are also looking bleak

* The upcoming week is expected to bring normal to above-normal rainfall to Maharashtra and Telangana

* In Nizamabad, a major spot market, the price ended at 13337.25 Rupees dropped by -1.15 percent.

Jeera

Jeera (cumin) prices experienced a slight decline of -0.67% to 59895, primarily due to profit booking following earlier gains driven by shrinking local supplies. The market is witnessing increased festive demand, and the limited availability of high-quality crops is prompting millers to buy on price dips. However, Indian jeera prices remain competitive globally, which has subdued overseas demand. Unfortunately, this competitiveness is not favorable for exporters at the moment, leading to subdued export activity. China, a major buyer of Indian jeera, has reduced its purchases in recent months, impacting overall exports. The possibility of China resuming purchases in October-November adds uncertainty to market dynamics. Dry weather in Gujarat is expected to increase arrivals, potentially capping upward price movements. According to FISS forecasts, cumin demand is projected to exceed supply this year, with demand at 85 lakh bags and supply at 65 lakh bags. Jeera exports from April to July 2023 decreased by 7.99% compared to the same period in 2022. In July 2023, jeera exports declined by 20.30% from June, and a significant drop of 58.23% compared to July 2022. In the major spot market of Unjha, prices closed at 60561.5 Rupees, marking a modest gain of 0.13%. From a technical standpoint, the market is currently experiencing long liquidation, with open interest dropping by -2.98% to 4686. Prices have decreased by -405 rupees. Support levels for jeera are at 58480, with the possibility of further testing down to 57050. Resistance is expected at 60970, with potential for prices to test 62030.

Trading Ideas:

*Jeera trading range for the day is 57050-62030.

* Jeera dropped amid profit booking after prices gained due to shrinking supplies in the local market.

* Increased festive demand and limited availability of quality crops in the market is prompting miller to buy

* However, sluggish export demand is still a major concern for Indian traders

* In Unjha, a major spot market, the price ended at 60561.5 Rupees gained by 0.13 percent.