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Gold

Gold prices rose by 0.62% to settle at 72,188, driven by the anticipation of a U.S. interest rate cut in September and a weaker dollar. Market participants are closely watching upcoming jobs data and key inflation reports from the U.S. to gauge the Federal Reserve's future policy direction. Federal Reserve Bank of Atlanta President Raphael Bostic hinted that with inflation moderating and unemployment slightly higher than expected, it might be time to consider rate cuts, although he remains cautious about the timing. The CME FedWatch tool indicates a 65.5% probability of a 25-basis-point rate cut and a 34.5% chance of a larger 50-bp reduction in the next Fed meeting. In the U.S. labor market, new jobless claims declined last week, but opportunities for re-employment are becoming scarcer, suggesting that the unemployment rate may have remained elevated in August. The U.S. economy expanded at a 3.0% annualized rate in Q2, driven by robust consumer spending and a rebound in corporate profits. Meanwhile, the rally in gold prices has led to reduced demand in major Asian markets, with dealers offering deeper discounts to attract buyers. In China, discounts on gold ranged from $18 to $3 per ounce, while in India, discounts increased to $6 per ounce. However, the reduction in import taxes on gold in India is expected to boost demand during the upcoming festival season. On the technical front, gold saw fresh buying with a 1.53% increase in open interest, settling at 16,822 contracts. Gold is currently supported at 71,840, with a potential test of 71,495 if this support is breached. Resistance is seen at 72,390, with a move above this level possibly leading to prices testing 72,595.
 

Trading Ideas:
* Gold trading range for the day is 71495-72595.
* Gold prices gained, helped by prospects of a U.S. interest rate cut in September and a weaker dollar.
* Fed’s Bostic said that with inflation down farther and the unemployment rate up more than he anticipated, it may be "time to move" on rate cuts.
* Traders have fully priced in a Fed easing for next month, with a 65.5% chance of a 25-basis-point cut and about 34.5% chance of a bigger 50-bp reduction.


Silver
Silver prices rose by 0.62% to settle at 87,049, supported by growing expectations that the U.S. Federal Reserve will begin cutting interest rates in September. This outlook has bolstered the appeal of commodities, including silver. Fed policymakers have recently signaled imminent rate cuts due to easing inflation and rising risks in the labor market, with Fed Chair Jerome Powell stating that it may be time to adjust the restrictiveness of current monetary policy. Despite a slight decrease in new jobless claims last week, the scarcity of re-employment opportunities suggests that the unemployment rate likely remained elevated in August. Nevertheless, the labor market's gradual slowdown is occurring in a way that supports ongoing economic expansion. The U.S. economy grew at a faster pace than initially estimated in the second quarter, driven by strong consumer spending and a rebound in corporate profits, which should continue to sustain economic growth. The Commerce Department's Bureau of Economic Analysis revised its estimate of second-quarter GDP growth to an annualized rate of 3.0%. Additionally, U.S. wholesale inventories increased by 0.3% in July 2024, slightly above expectations. India, the world's largest silver consumer, is on track to nearly double its silver imports this year. India's silver imports in the first half of 2024 surged to 4,554 tons from 560 tons a year ago, reflecting strong industrial demand and stockpiling due to depleted inventories in 2023. Technically, the silver market is experiencing fresh buying, with a 6.99% increase in open interest, settling at 23,335 contracts. Silver finds support at 86,460, with further support at 85,875. On the upside, resistance is expected at 87,490, and a move above this level could push prices to test 87,935.
 

Trading Ideas:
* Silver trading range for the day is 85875-87935.
* Silver rose underpinned by expectations that the US Federal Reserve will start cutting interest rates in September
* The number of Americans filing new applications for jobless benefits slipped last week
* US second-quarter economic growth revised higher on consumer spending


Crudeoil
Crude oil prices rose by 1.18% to settle at 6,362, driven by concerns over supply disruptions in Libya, which helped counterbalance a smaller-than-expected draw in U.S. crude inventories. Libya's Waha Oil Company significantly cut production from 280,000 barrels per day (bpd) to 150,000 bpd, with further reductions expected. This reduction in supply comes as some Libyan oilfields halted production amid a struggle for control of the central bank, contributing to an overall decline in production by approximately 700,000 bpd. These supply worries provided some support to crude prices, especially considering Libya's significant role as a member of OPEC. Despite these concerns, supply from the North Sea is expected to rise, with the five crude oil grades underpinning the Brent benchmark projected to average 610,000 bpd in October, up from 536,000 bpd in September. This increase in supply slightly tempered the bullish sentiment in the market. In the U.S., crude oil inventories fell by 0.846 million barrels for the week ending August 23, 2024, less than the anticipated 3 million barrel reduction. Stocks at the Cushing, Oklahoma delivery hub also decreased by 668,000 barrels. However, gasoline inventories saw a significant decrease of 2.203 million barrels, well above the projected 1.5 million barrel drop, while distillate fuel inventories rose by 0.275 million barrels against a forecasted drop of 0.55 million barrels. On the technical front, the market experienced short covering as open interest dropped by 11.93% to settle at 6,163 contracts. Crude oil currently has support at 6,237, with a potential test of 6,112 if this support is breached. Resistance is expected at 6,473, and a move above this level could see prices testing 6,584.
 

Trading Ideas:
* Crudeoil trading range for the day is 6112-6584.
* Crude oil prices edged higher amid concerns over Libyan supplies.
* Some oilfields in Libya have halted production amid a fight for control of the central bank.
* Libya's Waha Oil Company, cut production to 150,000 barrels from 280,000 barrels previously.


Naturalgas
Natural gas prices edged up by 0.5% to settle at 179.7, supported by a decline in daily output and a smaller-than-expected weekly storage build. This price increase occurred despite forecasts indicating lower demand next week than previously anticipated. According to LSEG, natural gas output in the Lower 48 U.S. states has decreased to an average of 102.4 billion cubic feet per day (bcfd) in August, down from 103.4 bcfd in July. Meteorologists predict that weather across the U.S. will remain mostly hotter than normal through mid-September, though the expected temperatures at the start of September will be slightly cooler than those at the beginning of August. LSEG forecasts average gas demand, including exports, to decrease from 105.8 bcfd this week to 102.4 bcfd next week. The U.S. EIA revised its forecast for natural gas output, projecting a larger decline this year due to record-low prices earlier in 2024, which led producers to scale back production. The EIA now expects output to average around 103.3 bcfd this year, down from the previous year's 103.8 bcfd and slightly lower than the July forecast of 103.5 bcfd. U.S. utilities added 35 billion cubic feet of gas into storage during the week ending August 23, 2024, aligning with market expectations. This brings total stockpiles to 3,334 Bcf, 228 Bcf higher than the same period last year and 361 Bcf above the five-year average. Technically, the natural gas market is experiencing short covering, as indicated by a 4.05% drop in open interest, settling at 47,517 contracts. The market finds support at 173.5, with further support at 167.3. On the upside, resistance is expected at 183.4, and a move above this level could see prices testing 187.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 167.3-187.1.
* Natural gas climbed on a decline in daily output and a smaller-than-expected weekly storage build.
* US utilities added 35 billion cubic feet of gas into storage during the week that ended August 23, 2024
* Last week's increase raised stockpiles to 3,334 Bcf, 228 Bcf higher than last year at this time and 361 Bcf above the five-year average of 2,973 Bcf.


Copper
Copper prices edged up by 0.06% to settle at 807.5, despite ongoing pressure from rising inventories, weak demand in China, and a strong dollar. Copper inventories in LME-registered warehouses surged by 8,700 tons to 322,950 tons, marking the highest level in about five years and doubling since mid-June. The bulk of these recent inflows have been directed into Asian LME warehouses, largely due to heavy exports from China. This increase in inventories highlights the persistent weakness in demand from the world's largest copper consumer. Adding to the bearish sentiment, mining giant BHP downgraded its forecast for China's copper demand growth to just 1-2% this year, citing an expected sharp contraction in housing completions. While BHP remains cautious about copper's near-term outlook, it still adheres to the widely-held belief that the metal is headed for severe shortages and much higher prices in the long term due to the global energy transition.The global copper market also showed a surplus, with the International Copper Study Group (ICSG) reporting a 95,000 metric ton surplus in June, up from a 63,000 metric ton surplus in May. For the first half of the year, the market was in a surplus of 488,000 metric tons, compared to 115,000 metric tons in the same period last year. On the technical front, the market saw fresh buying with a 2.43% increase in open interest, settling at 10,920 contracts. Copper is currently supported at 801.6, with a potential test of 795.7 if this support level is breached. Resistance is expected at 812.2, with a move above this level possibly leading to prices testing 816.9.
 

Trading Ideas:
* Copper trading range for the day is 795.7-816.9.
* Copper dropped pressured by rising inventories, lacklustre demand in China and a strong dollar.
* LME copper inventories increased by 8,700 tons to 322,950 tons, the highest for about five years.
* Miner BHP downgraded its forecast for China's copper growth to 1-2% this year.


Zinc
Zinc prices rose by 0.32% to settle at 268.2, driven by expectations of reduced supply and a seasonal increase in demand over the coming months. However, gains were limited by ongoing concerns about the strength of China's demand recovery, despite sufficient supply levels. A significant factor influencing zinc's market dynamics is the sharp decline in treatment charges for zinc concentrates, which have reached historical lows due to tight supply conditions. China's zinc output has been on a downward trend, with July marking the second consecutive monthly decline. Production dropped by 9.2% from June to 536,000 tons, the lowest monthly level in a year. This trend is expected to continue, with potential cuts of 30,000 to 40,000 tons per month from September to December, potentially reducing annual zinc ingot output by 3-4%. The global zinc market also reflected tighter conditions, with the surplus shrinking to 8,700 metric tons in June from 44,000 tons in May, according to the International Lead and Zinc Study Group (ILZSG). In July 2024, China's refined zinc production fell to 489,600 metric tons, down 10.3% from June and 11.15% year-on-year. The first seven months of 2024 saw a total production of 3.671 million metric tons, a 2.81% decrease from the previous year. Production was notably impacted by heavy rainfall in Sichuan and unexpected production cuts and controls in Yunnan, Guangdong, and Guangxi, alongside scheduled maintenance in several regions. Technically, the zinc market is experiencing fresh buying, with a 2.01% increase in open interest, settling at 2,180 contracts. Zinc finds support at 266.7, with further support at 265.2. On the upside, resistance is expected at 269.4, and a move above this level could push prices to test 270.6.
 

Trading Ideas:
* Zinc trading range for the day is 265.2-270.6.
* Zinc remains supported by reduced supply and seasonal demand uplift.
* Limited upside due to concerns about China's demand recovery.
* Treatment charges for zinc concentrates have fallen to historical lows.


Aluminium
Aluminium prices declined by 0.48% to settle at 227.3, pressured by concerns over excess supply as inventories continue to climb in SHFE-approved warehouses. SHFE aluminium stocks have increased by 36% over the past three months, signaling ample supply in the market. Additionally, the discount of the spot price to the three-month contract on the London Metal Exchange widened to $29 per ton, further indicating that immediate global supplies are sufficient. Global primary aluminum production reached 5.9031 million tons in June, while consumption stood at 5.8059 million tons, resulting in a supply surplus of 97,200 tons, according to the World Bureau of Metal Statistics. For the first half of the year, global production amounted to approximately 35.45 million tons, with consumption at around 34.73 million tons, leading to a surplus of nearly 720,000 tons. LME aluminium inventory, however, has dropped by 22% over the past three months to 877,950 tons, the lowest since May 8. China, the world's largest aluminium producer, saw its July output rise by 6% year-on-year to 3.68 million metric tons, the highest monthly output since 2002. This increase is attributed to new projects in Inner Mongolia and sustained strong production in other regions due to profitable market conditions. Global primary aluminium output in July increased by 2.4% year-on-year to 6.194 million metric tons, with China's production rising by 2.5% to 3.69 million tons, according to the IAI. Technically, the aluminium market is under fresh selling pressure, with a 5.42% increase in open interest, settling at 3,503 contracts. The metal finds support at 225.9, with further support at 224.5. On the upside, resistance is likely at 228.3, and a move above this level could see prices testing 229.3.
 

Trading Ideas:
* Aluminium trading range for the day is 224.5-229.3.
* Aluminium dropped pressured by concern about excess supplies as inventories climb in SHFE-approved warehouses
* SHFE aluminium stocks have gained 36% over the past three months.
* Aluminium supply remains elevated, while downstream demand recovery in China is limited


Cottoncandy
Cottoncandy prices rose by 0.57% yesterday, closing at Rs.58,020, driven by concerns over reduced acreage in the current kharif cropping season. The area under cotton cultivation has decreased by approximately 9% to 110.49 lakh hectares (lh) compared to 121.24 lh last year, with the Cotton Association of India (CAI) projecting an even lower total acreage of around 113 lh for this year, down from 127 lh in the previous year. This reduction is largely attributed to farmers shifting to other crops due to lower yields and high production costs. The CAI has also highlighted a tighter cotton balance sheet for the upcoming season, driven by higher-than-expected exports to Bangladesh, which have surged from 15 lakh bales to 28 lakh bales. India’s cotton production and consumption for 2023-24 are both estimated at around 325 lakh bales. However, the gap created by higher exports and imports will tighten the availability of cotton stocks, with an estimated 70 lakh bales available for consumption up to September 30. If the new crop is delayed, this could further strain supply for mills. Globally, the 2024/25 cotton balance sheet shows reductions across production, consumption, and stock levels, with world production down by 2.6 million bales due to lower output in the United States and India. Consumption has also decreased, particularly in China, leading to a reduction in world ending stocks to 77.6 million bales. Technically, the Cottoncandy market is experiencing fresh buying, with open interest increasing by 0.57%. The price finds immediate support at Rs.57,940, with further support at Rs.57,870. On the upside, resistance is likely at Rs.58,090, with potential testing of Rs.58,170 if the upward momentum continues.
 

Trading Ideas:
* Cottoncandy trading range for the day is 58000-58000.
* Cotton dropped on profit booking after prices gaied as Cotton acreage trails by 9% at 110 lh
* CAI predicts acreage to be around 113 lh this year, up from 127 lh in the previous year.
* Global cotton production cut by 2.6 million bales; lower in US, India.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric prices surged by 4.37% to settle at 13,418, driven by tighter supplies in the market and increased buying from stockists. The market also faces complications from anticipated volatility in Bangladesh, which could further influence export opportunities. In Indonesia, dry weather has accelerated harvesting, leading to peak levels of production. However, attractive prices have prompted many farmers to sell their turmeric in the wet stage, potentially reducing overall production. Despite the current price surge, the combination of rising acreage and low export demand could exert downward pressure on prices. Reports indicate increased sowing across key turmeric-producing regions in India, including Erode, Maharashtra, Telangana, and Andhra Pradesh. Turmeric sowing in these areas is estimated to be 30-35% higher than last year. Overall, turmeric was sown in about 3-3.25 lakh hectares in 2023, with an increase expected to 3.75-4 lakh hectares this year. Despite the increased sowing, farmers are holding back stocks in anticipation of further price rises. Last year's low sowing, combined with unfavorable weather, led to an estimated production of 45-50 lakh bags in 2024, with outstanding stocks of 35-38 lakh bags. This year, even with the expected increase in sowing, the upcoming crop is projected to be around 70-75 lakh bags, with outstanding stocks likely to be zero, leading to a potential supply shortage in 2025. On the technical front, the market witnessed fresh buying, with open interest increasing by 0.58% to settle at 16,530 contracts. Turmeric is currently supported at 12,684, with a potential test of 11,952 if this support is breached. Resistance is expected at 13,874, with prices possibly testing 14,332 if resistance is surpassed.
 

Trading Ideas:
* Turmeric trading range for the day is 11952-14332.
* Turmeric gains amid tighter supplies in the market and emerging buying from stockists.
* Pressure also seen amid news of increased sowing.
* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.
* In Nizamabad, a major spot market, the price ended at 14322 Rupees dropped by -1.31 percent.


Jeera
Jeera prices increased by 0.45% to settle at 25,535, driven by strong domestic and export demand amidst tight global supplies. However, the upside was capped by expectations of higher production this season, which could potentially weigh on prices. Farmers are holding back their stocks in anticipation of better prices, further supporting the market. This season, jeera production is expected to rise by 30% to approximately 8.5-9 lakh tonnes, thanks to a significant increase in cultivation areas. In Gujarat, the sowing area has surged by 104%, while in Rajasthan, it has increased by 16%. Globally, jeera production has also seen substantial growth, particularly in China, where output has nearly doubled to 55-60 thousand tons. Increased production is also expected from Syria, Turkey, and Afghanistan, which could put downward pressure on prices as these new supplies enter the market. Despite the expectation of higher production, the market remains supported by strong export demand. Jeera exports during April-June 2024 rose by 46.56% to 73,770.58 tonnes compared to the same period in 2023. However, June 2024 exports were down by 29.12% from May 2024 but still showed a significant increase of 60.13% year-on-year. Technically, the jeera market is experiencing short covering, with a 1.5% decrease in open interest, settling at 2,361 contracts. Jeera finds support at 25,200, with further support at 24,860. On the upside, resistance is expected at 25,990, and a move above this level could see prices testing 26,440.
 

Trading Ideas:
* Jeera trading range for the day is 24860-26440.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 25417.6 Rupees dropped by 0 percent.

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