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Gold

Gold prices experienced a decline of -1.2% to 61719 as the U.S. economy continues to outperform job expectations, contributing to a drop in the unemployment rate to 3.7%. The Bureau of Labor Statistics reported a nonfarm payroll increase of 199,000, surpassing the consensus estimate of 184,000. The positive job data is influencing expectations for interest rates, with a slight reduction in projections for a March rate cut, though still above 50%. In response to record local prices, physical gold dealers in India raised discounts to seven-month highs to attract customers, while premiums in China decreased. Indian dealers offered discounts of up to $14 an ounce, compared to the previous week's $9. In China, premiums ranged from $12-$30 per ounce over global spot prices, down from $25-$35 the previous week. Hong Kong dealers sold bullion at par with global spot rates to $2.50 premiums per ounce. Singapore premiums remained stable at $1.25-$2.25. From a technical standpoint, the market is witnessing long liquidation, with a -6.61% drop in open interest to 15259, coupled with a price decrease of -747 rupees. Gold is currently finding support at 61370, and a break below could test 61020 levels. On the upside, resistance is likely at 62325, with a move above potentially leading to a test of 62930 levels.

Trading Ideas:
* Gold trading range for the day is 61020-62930.
* Gold dropped as the U.S. economy continues to add more jobs than expected
* U.S. nonfarm payrolls rose by 199,000 last month, according to the Bureau of Labor Statistics.
* Physical gold dealers in India increased discounts to seven-month highs in a bid to lure customers as record local prices hurt demand

Silver

The recent decline in silver prices, down by -2.42% to 72518, can be attributed to a stronger-than-expected US jobs report. The addition of nearly 200 thousand jobs in November, along with a surprising drop in the unemployment rate and robust wage growth, challenged expectations of an early rate cut by the Federal Reserve in Q1 2024. This, in turn, increased the opportunity cost of holding silver, especially with the potential for prolonged restrictive interest rates. Chile's Chochilco anticipates a 9.4% drop in silver demand in 2024 due to decreased investments, despite the market remaining in a deficit. The Silver Institute's forecast of reduced output in Peru and Mexico aligns with this expectation. Despite these challenges, the market seems to be holding near record highs, supported by the historical tightness of the US labor market and the economy's resilience to the Fed's tightening measures. From a technical perspective, the market shows signs of fresh selling with a 15.45% increase in open interest to 16875, coupled with a price decline of -1795 rupees. Silver is currently finding support at 71725, and a break below could test 70930 levels. On the upside, resistance is likely at 74050, and a move above could lead to a test of 75580 levels.
 

Trading Ideas:
* Silver trading range for the day is 70930-75580.
* Silver prices sank amid a stronger-than-forecasted jobs report.
* Chile’s state-owned Chochilco stated that silver demand is expected to fall 9.4% in 2024 due to lower investments.
* The market is expected to remain in a deficit, aligned with the Silver Institute’s forecast of lower output in Peru and Mexico.

Crude oil

Crude oil prices surged by 2.29% to settle at 5935 following joint efforts by Saudi Arabia and Russia to rally OPEC+ members towards output cuts. The agreement entails a combined 2.2 million barrels per day reduction for the first quarter of the next year. Chinese data revealed a 9% YoY decline in crude oil imports for November due to high inventory levels and weak economic indicators. Meanwhile, U.S. output remained at over 13 million bpd, contributing to a global surplus. Resilient U.S. job growth and a lower unemployment rate diminished expectations of early Fed interest rate cuts. In Nigeria, the Dangote oil refinery is set to become a net exporter after receiving its first 1 million-barrel crude oil cargo, marking a significant shift from import reliance. From a technical standpoint, the market is witnessing short covering, with a -17.62% drop in open interest to 15375, alongside a price increase of 133 rupees. Crude oil finds support at 5856, and a break below could test 5776 levels. On the upside, resistance is likely at 6000, with a move above potentially testing 6064 levels.
 

Trading Ideas:
* Crudeoil trading range for the day is 5776-6064.
* Crude oil gains after Saudi Arabia and Russia lobbied OPEC+ members to join output cuts.
* Chinese crude oil imports fell 9% in November
* US crude output holds above 13 million bpd

Natural gas

Natural gas prices experienced a 1.12% increase, settling at 217.2, attributed to record liquefied natural gas (LNG) exports. Despite this, a limited upside is expected due to forecasts of milder weather and reduced heating demand through late December. The abundance of open pipelines and robust gas flow to Europe suggests the continent is well-prepared for the winter. The US has significantly boosted oil and gas production, impacting global prices as President Biden aims to bolster the Democrats' position in the 2024 elections. A report indicates an LNG surplus until at least 2025, resulting from increased supply to replace Russian imports to Europe. Norwegian gas flow to Europe is notably high, surpassing the five-day moving average. Although Gaza tensions exist, they haven't disrupted gas flow from the Middle East to Europe. US utilities withdrew 117 bcf of gas from storage, exceeding expectations and last year's withdrawal, reflecting a proactive approach amid market dynamics. Technically, short covering is evident with a 5.41% drop in open interest, settling at 34482. Despite this, prices rose by 2.4 rupees. Support for natural gas is identified at 213.7, with a potential test of 210.2. Resistance is likely at 219.6, and a breakthrough could lead to a test of 222.

Trading Ideas:
* Naturalgas trading range for the day is 210.2-222.
* Natural gas gains on record liquefied natural gas (LNG) exports
* Global gas flow to Europe at normal to elevated levels.
* LNG surplus projected until at least 2025.


Copper

Copper prices surged by 0.92%, settling at 721.75, driven by positive signals from China, including improved exports and increased demand prospects for the commodity sector. China's exports grew for the first time in six months in November, indicating that factories in the world's second-largest economy are attracting buyers through discount pricing to overcome a prolonged slump in demand. Daily LME data revealed net canceled warrants in LME-registered warehouses at 6,725 metric tons, providing additional support to copper prices. China's copper imports rose by 10.1% from the previous month to 550,565.6 tonnes in November, according to data from the General Administration of Customs. The increase in unwrought copper and copper product imports includes anode, refined, alloy, and semi-finished copper products. The premium to import copper into China remained around a one-year high at $112.50 per ton, indicating rising demand for the metal in China. Copper inventories in warehouses monitored by the Shanghai Futures Exchange increased by 16.0% from the previous Friday, as reported by the exchange. In Chile, the world's leading copper producer, exports of the red metal reached $3.96 billion in November, marking a 3.8% increase from the previous year, according to the central bank. Technically, the market witnessed short covering, with a drop in open interest by -11.9% to settle at 4,603. Copper finds support at 716.1, and a breach below could test 710.5 levels. Resistance is now likely at 725.6, and a move above could see prices testing 729.5.
 

Trading Ideas:
* Copper trading range for the day is 710.5-729.5.
* Copper advanced as data showing improved exports from China signalled better demand prospects.
* China's exports grew for the first time in six months in November
* Shanghai warehouse copper stocks up 16.0%

Zinc

Zinc prices closed lower by -0.48% at 216.55, reflecting global concerns over the surge in local Chinese government debt and a deepening property crisis in the second-largest economy. Inventories in SHFE warehouses dropped significantly by 30.30% from the previous Friday, indicating a tightening supply situation. The decline in zinc stocks continued after robust growth in November, with daily LME data showing net fresh cancellations of warrants at 21,225 tons. Despite hopes for an economic recovery in China, driven by stimulus measures from Beijing and an unexpected increase in the Caixin Manufacturing PMI in November, concerns over the impact of the property crisis and escalating debt weighed on market sentiment. Moody's downgrade of China's government credit rating outlook from stable to negative added to the uncertainties. Zinc stocks in LME warehouses surged to 226,250 at the end of November, reaching a more-than-two-year high. Looking at the global zinc market, it shifted to a deficit of 15,400 metric tons in September from a surplus of 28,000 tons in August, as reported by the International Lead and Zinc Study Group. The cumulative surplus for the first nine months of the year was 475,000 tons, a significant increase from a surplus of 47,000 tons in the same period last year. Technically, the market is experiencing fresh selling, with open interest gaining by 2.15% to settle at 4,750. Zinc is finding support at 215.5, and a breach below could lead to a test of 214.4 levels. Resistance is likely at 218.6, and a move above could push prices to 220.6.
 

Trading Ideas:
* Zinc trading range for the day is 214.4-220.6.
* Zinc dropped amid mounting global concern over the impact of surging local Chinese government debt
* Shanghai warehouse zinc stocks down 30.30%
* LME Zinc stocks continue to decline after sharp November growth with net fresh cancellations of warrants at 21,225 tons


Aluminium

Aluminium prices closed higher by 0.26% at 195.6, driven by factors such as reduced inventories in Shanghai Futures Exchange-monitored warehouses, continued production restrictions due to China's winter power shortage, and capacity ceilings at local smelters. Additionally, China's increased support for the real estate industry and a weaker US dollar, amid expectations of the Fed loosening monetary policy next year, contributed to the positive sentiment. Inventories in warehouses monitored by the Shanghai Futures Exchange saw an 8.20% decrease from the previous Friday, indicating tightening supplies. China's winter power shortage and production restrictions have led to ongoing challenges in the aluminium market. The global aluminium shortage is anticipated to reach 1.23 million tons in 2024, nearly double the deficit observed in 2023, with prices expected to increase to US$2,600/ton in the next 12 months. The World Bureau of Metal Statistics (WBMS) reported a supply shortage of 14,900 tons in global refined aluminium production in September. China's primary aluminium production reached a record monthly high of 3.62 million tons in October, marking a 6% year-on-year increase, driven by rising smelter profits and domestic demand. China's aluminium consumption has remained stable, with strong demand from the new energy industry, particularly the solar sector. Technically, the market is experiencing short covering, with open interest dropping by -1.55% to settle at 4,815. Aluminium is finding support at 194.6, and a breach below could lead to a test of 193.6 levels. Resistance is likely at 197, and a move above could push prices to 198.4.
 

Trading Ideas:
* Aluminium trading range for the day is 193.6-198.4.
* Aluminium gains as Shanghai warehouse aluminium stocks down 8.20%
* Support also seen due to the continued production restrictions caused by China's winter power shortage.
* The global aluminium shortage is expected to reach 1.23 million tons in 2024, almost double the deficit in 2023.

Cotton

Cotton prices, represented by Cottoncandy, closed higher by 0.53% at 57300, as traders grappled with concerns over limited supplies in the near term. ICE data revealed a significant drop in certified cotton stocks, deliverable against contracts, from 87,770 bales on December 1st to 6,325 bales on December 5th. This decline in stocks heightened market apprehensions. Brazilian cotton shipments in November reached 253.71 thousand tons, reflecting a 12% increase compared to October but a 5.5% decrease compared to November 2022. The International Cotton Advisory Committee (ICAC) projected that global cotton production is set to surpass consumption for the second consecutive year. Global cotton lint production is expected to grow by 3.25% year-on-year to 25.4 million metric tons in the 2023-2024 season, while consumption is forecasted to marginally decline to 23.4 million metric tons. In contrast, sluggish demand, reflected in a 5-week low of global cotton bookings for the last week of November, exerted downward pressure on cotton futures. The Cotton Association of India (CAI) revised down its cotton production estimate for the current 2023/2024 season to 29.4 million bales. Factors include damage in Haryana from pink bollworm infestation and farmers uprooting plants. North Maharashtra is expected to see a significant 25% decline in cotton production due to inadequate rainfall. Technically, the market is under fresh buying, with open interest gaining by 2.4% to settle at 171. Cottoncandy is finding support at 57060, with potential downside testing at 56830 levels. Resistance is likely at 57660, and a move above could push prices to 58030.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56830-58030.
* Cotton gains as traders grappled with concerns regarding limited supplies in the near term.
* ICE certified cotton stocks, dropped to 6,325 bales on December 5th from their highest level in over two years at 87,770 bales on December 1st.
* 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 26432.65 Rupees dropped by -0.09 percent.

Turmeric

Turmeric prices closed lower by -0.77% at 14644, with slower buying activities as traders anticipate the release of stocks ahead of the commencement of new crops in January 2024. The market is also under pressure due to improved crop conditions resulting from favorable weather conditions. Concerns have arisen over the location of PM Modi's Turmeric Board in Telangana, sparking farmer concerns in Maharashtra. While crop conditions are reported to be satisfactory, there is potential for yield losses due to unfavorable weather, which may provide some support to prices. The current levels of buying activity, coupled with decreasing supplies, are expected to sustain price stability. Additionally, there is support for improved export opportunities, as exports have increased by 25% with growing demand in both developed and emerging nations. Expectations for a 20–25% decline in turmeric seeding this year, especially in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, reflect shifting priorities among farmers. However, in September 2023, exports dropped by 19.75% month-on-month and 35.06% year-on-year, indicating a fluctuating export trend. In the major spot market at Nizamabad, prices ended at 13266.25 Rupees, down by -0.28%. Technically, the market is under fresh selling pressure, with open interest gaining by 10.95% to settle at 8460. Turmeric is finding support at 14488, and a breach below could lead to a test of 14332 levels. Resistance is likely at 14824, and a move above could push prices to 15004.
 

Trading Ideas:
* Turmeric trading range for the day is 14332-15004.
* Turmeric dropped as buying activities has been slower in expectation of release of stocks
* 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 Nizamabad, a major spot market, the price ended at 13266.25 Rupees dropped by -0.28 percent.

Jeera

Jeera prices closed lower by -1.91% at 36470, driven by farmers insisting on increased cumin sowing. The latest data reveals a substantial surge in cumin sowing in Gujarat, reaching 3.76 lakh hectares by December 4, marking a remarkable 161% increase compared to the same period last year. Rajasthan also recorded a 13% rise in cumin cultivation. The surge in cumin sowing has led to oversupply concerns, pressuring prices downward. The increased production is driven by favorable weather conditions and farmer preferences for cumin cultivation. This surplus in the domestic market has contributed to a drop in global demand for Indian jeera, with buyers preferring other origins like Syria and Turkey due to relatively higher prices in India. Jeera exports during April to September 2023 registered a significant decline of 29.79%, totaling 76,969.88 tonnes compared to the same period in 2022. In September 2023, exports dropped by 11.02% month-on-month and a substantial 60.27% year-on-year, reflecting the impact of increased global competition and higher domestic supply. In the major spot market at Unjha, prices ended at 39900.2 Rupees, down by -1.8%, reflecting the bearish sentiments in the market. Technically, the market is currently under fresh selling pressure, with open interest gaining by 25.83% to settle at 3069. Jeera is finding support at 35780, and a breach below could lead to a test of 35090 levels. Resistance is likely at 37380, and a move above could push prices to 38290.
 

Trading Ideas:
* Jeera trading range for the day is 35090-38290.
* Jeera prices dropped as there has been a two and a half times increase in the sowing in Gujarat this year.
* An increase in sowing of about 13 percent has been recorded in the area of cumin in Rajasthan.
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 39900.2 Rupees dropped by -1.8 percent.