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Gold

Gold prices declined by 0.25% to Rs.76,871, pressured by a firmer U.S. dollar and Treasury yields as markets anticipated the Federal Reserve's interest rate decision. While a 25 bps rate cut is expected with a 97% probability according to the CME FedWatch tool, traders foresee a cautious pace of monetary easing in 2024, with only a 17% chance of a cut in January. In India, gold imports are expected to slow significantly in December after record-high purchases in November. Discounts in India widened to $9 per ounce, up from last week’s $2, as elevated domestic prices during the wedding season dampened demand. Similarly, in China, discounts ranged between $19.4-$25, reflecting subdued consumer confidence despite recent stimulus measures. Central banks remained key players, purchasing 60 tons of gold in October, led by India, which added 27 tons, bringing its year-to-date purchases to 77 tons, a five-fold increase from 2023. Turkey and Poland also added 72 tons and 69 tons, respectively, reflecting strong buying from emerging markets. Meanwhile, global gold demand in Q3 2024 was steady at 1,176.5 tons, with record OTC trading flows boosting total demand to 1,313 tons, up 5% year-on-year, per the World Gold Council. Technically, the market witnessed long liquidation with a 2.38% drop in open interest to 12,880, alongside a Rs.190 price decline. Gold finds support at Rs.76,500, with further downside to Rs.76,135, while resistance is at Rs.77,215, and a break above may test Rs.77,565.

Trading Ideas:

* Gold trading range for the day is 76135-77565.

* Gold slips on expectations of a cautious Fed next year

* The odds of a 25 bps cut this week stand at 97%, but the chances of a reduction in January are just around 17%.

* Traders are increasingly convinced the central bank will lower borrowing rates only gradually next year.

Silver

Silver prices fell by 0.34% to Rs.90,875, pressured by concerns over a cautious pace of interest rate easing by the U.S. Federal Reserve in 2024. While a 25 bps rate cut is widely expected this week, the Fed is likely to signal fewer reductions in 2025 amid persistent inflation risks. Additionally, robust U.S. retail sales data, up 0.7% in November, highlighted strong consumer spending, further weighing on silver. Demand concerns in China, the largest consumer of metals, also added pressure. Retail sales growth in China slowed more than anticipated in November, and new home prices marked their 17th consecutive month of decline, reflecting a weak property sector. On the supply side, the global silver deficit is projected to narrow by 4% to 182 million ounces in 2024, with a 2% rise in supply offsetting a 1% demand increase, according to the Silver Institute. Industrial demand is forecast to reach a record 1.21 billion ounces, driven by growth in electronics, EVs, and solar panels, despite a 16% drop in physical investment. India's silver imports have surged in 2024, with 4,554 tons imported in H1 compared to 560 tons in the same period last year. Technically, the market experienced fresh selling, with a 3.61% rise in open interest to 28,863, alongside a price decline of Rs.308. Support is at Rs.90,195, with further downside to Rs.89,515, while resistance is at Rs.91,350, and a move above could test Rs.91,825.

Trading Ideas:

* Silver trading range for the day is 89515-91825.

* Silver fell weighed down by concerns about a more measured pace of easing from the US Federal Reserve next year.

* Retail sales in the US increased 0.7% mom in November 2024, following an upwardly revised 0.5% rise in October

* The Fed is widely expected to implement a 25 basis point interest rate cut this week, but it may signal fewer reductions for 2025

Crude oil

Crude oil prices fell by 1.53% to Rs.5,930, weighed down by concerns over weakening global demand and cautious market sentiment ahead of the U.S. Federal Reserve's policy meeting. A lackluster economic outlook from China, the world’s largest crude importer, and expectations of oversupply in 2024 further pressured prices. Additionally, disappointing manufacturing activity in the U.S. and Eurozone signaled weaker industrial demand, compounding bearish trends in the oil market. U.S. crude oil production hit a record high of 13.631 million bpd for the week ending December 6, surpassing the previous weekly record of 13.513 million bpd. However, crude inventories fell by 1.425 million barrels, exceeding market expectations of a 1.1 million-barrel draw. Gasoline and distillate stockpiles saw significant increases of 5.086 million barrels and 3.235 million barrels, respectively, reflecting potential seasonal shifts in fuel demand. The U.S. EIA revised its global oil demand forecast downward for 2024 to 104.3 million bpd, a reduction of 300,000 bpd from prior estimates. U.S. oil demand for 2024 is now projected at 20.5 million bpd, slightly lower than earlier forecasts, while production growth is expected to moderate, with output reaching 13.22 million bpd this year. Technically, the market witnessed long liquidation, with a sharp 15.21% drop in open interest to 10,325, alongside a price decline of Rs.92. Crude oil is now finding support at Rs.5,863, with a further downside likely to test Rs.5,797. Resistance stands at Rs.6,010, and a move above this could target ?6,091.

Trading Ideas:

* Crudeoil trading range for the day is 5797-6091.

* Crude oil fell amid renewed concerns about weakening global demand.

* China’s lackluster economic data added to uncertainty over the country’s economic outlook, stoking fears about reduced consumption.

* Additional downward pressure came from weaker-than-expected manufacturing activity in the US and Eurozone, which negatively impacts fuel demand.

Natural gas

Natural gas prices fell by 1.46% to settle at Rs.270, pressured by increased production and forecasts for mild weather and lower heating demand through the start of 2024. Rising U.S. output, averaging 103.1 billion cubic feet per day (bcfd) in December, up from 101.5 bcfd in November, has kept the market well-supplied. This compares with a record output of 105.3 bcfd in December 2023. Furthermore, milder-than-expected weather in the Lower 48 U.S. states is expected to limit heating demand, with projections showing average gas demand rising from 124.0 bcfd this week to 129.1 bcfd next week due to colder seasonal conditions. Despite these factors, LNG exports continue to provide some support, with gas flows to the eight major U.S. export plants averaging 14.0 bcfd in December, up from 13.6 bcfd in November but below the record 14.7 bcfd set in December 2023. The U.S. entered the winter heating season with the highest natural gas storage levels since 2016 at 3,922 billion cubic feet, which are currently 6% above the five-year average and 1.8% higher than last year’s levels. Technically, the market is under long liquidation, with open interest declining by 3.1% to 14,795 contracts as prices dropped by Rs.4. Natural gas is now finding support at Rs.262.5, with a further decline potentially testing Rs.255.1. On the upside, resistance is seen at Rs.277.7, and a move above this could push prices toward Rs.285.5.

Trading Ideas:

* Naturalgas trading range for the day is 255.1-285.5.

* Natural gas eased on rising output and forecasts for mild weather.

* Average gas output in the Lower 48 U.S. states rose to 103.1 bcfd so far in December, up from 101.5 bcfd in November.

* Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through Jan. 1.

Copper

Copper prices dropped by 0.87% to settle at Rs.807.15, as uncertainty looms over demand from China, the top consumer, and the possibility of a slower pace of easing by the U.S. Federal Reserve next year. Weak retail sales growth in China during November highlighted reduced consumption, raising concerns about the metal's demand. Additionally, Peru’s copper production in October declined by 1.4% year-on-year to 236,797 metric tons, impacted by lower output at major mines like Cerro Verde (-6.6%) and Antamina (-22.2%). On the supply side, the global refined copper market is expected to see a 491,000-ton surplus in 2025, the largest since 2020, according to BNP Paribas. Consequently, the firm downgraded its 2025 copper price forecast by 5% to $9,020 per ton. Meanwhile, China’s copper imports surged to a one-year high in November, reaching 528,000 tons, driven by restocking efforts and lower global prices. Despite this, copper concentrate imports fell 7.8% year-on-year to 2.25 million tons, reflecting fluctuating supply dynamics. Globally, refined copper production in September totaled 2.22 million tons, while consumption reached 2.35 million tons, resulting in a 131,000-ton deficit, compared to a 43,000-ton surplus in August, as reported by the International Copper Study Group (ICSG). Technical Overview: Copper is under fresh selling pressure, with open interest rising by 5.1% to 6,036 contracts. Prices are supported at Rs.804.1, with further declines potentially testing Rs.800.9. Resistance is seen at Rs.812.1, and a breakout could lead to Rs.816.9.

Trading Ideas:

* Copper trading range for the day is 800.9-816.9.

* Copper dropped amid ongoing uncertainty over demand from China

* Pressure also seen amid concerns about a more gradual pace of easing by the US Federal Reserve next year.

* Retail sales growth in China slowed more than expected in November, reflecting weakening consumption.

Zinc

Zinc prices declined by 0.68% to settle at Rs.283.45, pressured by ongoing demand concerns in China, the largest consumer of metals. November retail sales growth in China fell short of expectations, signaling weak consumption, while new home prices dropped for the 17th consecutive month, reflecting continued challenges in the property sector. Investor sentiment remains subdued despite Beijing's stimulus pledges, which lack clarity on size and scope. Additionally, weaker-than-expected Chinese exports and shrinking imports in November further added to the bearish outlook. Zinc inventories in Shanghai Futures Exchange warehouses fell 4.4% last week, while November refined zinc production in China rose by 1,000 metric tons month-on-month, though it was down nearly 12% year-on-year. Cumulative refined zinc production from January to November reached over 5.6 million metric tons, marking a 6% year-on-year decline. However, December production is expected to increase by 20,000 metric tons month-on-month, or about 5%, as production ramps up in regions like Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi. The global zinc market deficit narrowed to 79,500 metric tons in September from 85,000 tons in August, according to ILZSG. For the first nine months of 2024, the market recorded a small 8,000-ton deficit, compared to a 358,000-ton surplus in the same period last year. Zinc is experiencing long liquidation, with open interest falling by 8.74% to 2,181 contracts. Prices are supported at Rs.281.9, with further declines testing Rs.280.3. Resistance is seen at Rs.285.7, with a breakout potentially leading to Rs.287.9.

Trading Ideas:

* Zinc trading range for the day is 280.3-287.9.

* Zinc dropped pressured from ongoing demand uncertainty in China

* In China, new home prices fell for the 17th consecutive month, highlighting ongoing challenges in the property sector.

* Beijing's latest stimulus pledges have failed to generate significant investor optimism

Aluminium

Aluminium prices fell by 0.37%, settling at Rs.242.45, driven by rising production in China and concerns about economic challenges, including potential U.S. trade tariffs under a second Trump administration. In November, China’s aluminium output increased by 3.6% year-on-year to 3.71 million metric tons, with daily production averaging 123,667 tons, up 3% from October. Cumulative output from January to November reached 40.22 million metric tons, marking a 4.6% year-on-year increase. While November production was supported by new capacity ramp-ups, it faced constraints from pot maintenance due to environmental protection policies and increased alumina costs. Further capacity resumptions are anticipated in December, though small-scale pot maintenance in Guangxi, Sichuan, and Chongqing may limit growth. Aluminium inventories in Shanghai Futures Exchange warehouses declined by 4.4% last week, reflecting steady demand. China’s exports of unwrought aluminium and related products rose 17% year-on-year in the first ten months of 2024, reaching nearly 5.5 million tons. In October alone, exports grew 31% year-on-year to 577,000 tons. Amid concerns over supply tightening, Japanese buyers agreed to pay a 30% higher premium of $228/ton for January-March shipments. The market is undergoing long liquidation, with open interest dropping by 25.37% to 1,797 contracts. Aluminium is supported at Rs.241.4, with further declines potentially testing Rs.240.2. Resistance is at Rs.243.8, and a break above this level could see prices testing Rs.245.

Trading Ideas:

* Aluminium trading range for the day is 240.2-245.

* Aluminium prices fell amid rising output in China.

* Beijing braces for more U.S. trade tariffs under a second Donald Trump administration.

* China’s industrial output grew ahead of expectations.

Cottoncandy

Cottoncandy prices edged lower by 0.26%, settling at Rs.54,530, as global production for CY 2024-25 is projected to increase by 1.2 million bales to 117.4 million bales, driven by higher output in India and Argentina. Despite this, domestic supply constraints in India are pressuring the market. Cotton arrivals in North India (Punjab, Haryana, and Rajasthan) have dropped by 43% year-on-year till November 30, 2024, as farmers hold back their produce in anticipation of higher prices, causing shortages for ginners and spinners. India's cotton production is expected to decline by 7.4% in 2024/25 to 30.2 million bales, primarily due to a reduction in planted area and crop damage from excessive rainfall. The area under cotton cultivation has fallen to 11.29 million hectares from 12.69 million hectares last year, as farmers in Gujarat shifted to groundnuts for better returns. Consequently, India's cotton imports are forecasted to rise to 2.5 million bales (from 1.75 million last year), while exports may drop to 1.8 million bales (from 2.85 million). On the global front, U.S. cotton production for 2024/25 has been revised higher to 14.3 million bales, contributing to an increase in world ending stocks by 267,000 bales. World trade is also projected to grow, with higher exports expected from Brazil, Benin, and Senegal. The market is experiencing long liquidation, with open interest remaining unchanged at 342 contracts. Prices are finding support at Rs.54,520, with further downside testing at Rs.54,510. Resistance is anticipated at Rs.54,540, with a break above possibly testing Rs.54,550.

Trading Ideas:

* Cottoncandy trading range for the day is 54510-54550.

* Cotton dropped as Global cotton production is projected to rise by more than 1.2 million bales to 117.4 million bales

* India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago

* Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA

* In Rajkot, a major spot market, the price ended at 25533.95 Rupees dropped by -0.19 percent.

Turmeric

Turmeric prices surged by 2.69% to settle at 14,366 due to strong buying activity amid low supplies until the arrival of the new crop. Market arrivals increased to 9,030 bags compared to 7,965 bags in the previous session, with major trading centers like Hingoli and Erode witnessing significant activity, though Hingoli markets remained closed. Despite this, the upside was capped as the turmeric crop is reported to be in good to excellent condition, with minimal weather disruptions. While improved crop acreage has been reported across Maharashtra, Telangana, and Andhra Pradesh—30-35% higher than last year—delays in harvesting due to prolonged vegetation growth from extended rains may impact fresh supplies. Total turmeric sowing is estimated to have increased from 3-3.25 lakh hectares last year to 3.75-4 lakh hectares this year. Production for 2024 is projected at 45-50 lakh bags, with an outstanding stock of 35-38 lakh bags. Trade data highlights turmeric exports during April-September 2024 increased slightly by 0.96% to 92,911.46 tonnes, while imports surged by 184.73% to 15,742.12 tonnes during the same period. In September 2024, exports dropped by 4.06% to 15,326.76 tonnes compared to August but rose by 68.69% year-on-year. In Nizamabad, a major spot market, prices gained 0.36%, closing at 13,821.65 rupees. Technically, the market saw fresh buying, with open interest rising 5.83% to 10,445 while prices climbed 376 rupees. Turmeric has support at 14,068, with further downside at 13,770. On the upside, resistance is seen at 14,576, and a break above could push prices to 14,786.

Trading Ideas:

* Turmeric trading range for the day is 13770-14786.

* Turmeric gains on strong buying activity amid reports of low supplies till the arrival of new crop.

* However upside seen limited as turmeric crop is reported to be in good to excellent condition.

* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.

* In Nizamabad, a major spot market, the price ended at 13821.65 Rupees gained by 0.36 percent.

Jeera

Jeera prices settled 0.52% higher at 24,025 due to delays in sowing in Gujarat and Rajasthan caused by higher day temperatures, which have impacted germination. In Gujarat, the largest producing state, jeera sowing has only covered 57,915 hectares by November 25, compared to 2.44 lakh hectares during the same period last year. This represents just 15% of the normal cropping area of 3.81 lakh hectares, delaying sowing by 20-25 days. Meanwhile, jeera production in 2023-24 increased to 8.6 lakh tonnes over 11.87 lakh hectares compared to 5.77 lakh tonnes on 9.37 lakh hectares the previous year. The current season is expected to see a 10% decline in production, with Rajasthan witnessing an estimated 10-15% decrease in cumin cultivation. However, India's competitive pricing at $3,050 per tonne, nearly $200-250 lower than Chinese cumin, makes it the preferred choice in global markets. Export demand remains robust, with jeera exports rising by 70.02% during April-September 2024 to 1,19,249.51 tonnes, compared to 70,139.89 tonnes last year. Notably, exports surged 162.34% in September 2024 to 15,635.04 tonnes year-on-year. In the spot market at Unjha, prices closed at 24,428.15, dropping 0.17%. Technically, fresh buying was observed as open interest increased by 0.37% to 2,424, with prices gaining 125 rupees. Jeera finds support at 23,930, with further downside at 23,830, while resistance is seen at 24,100, and a move above this level could push prices to 24,170.

Trading Ideas:

* Jeera trading range for the day is 23830-24170.

* Jeera prices gained as sowing has been delayed

* Higher day temperatures in the past few weeks has impacted the seeding of jeera and has also led to poor germination in various places.

* In Gujarat, jeera sowing has taken place in only 57,915 hectares till November 25 during the rabi 2024-25 cropping season.

* In Unjha, a major spot market, the price ended at 24428.15 Rupees dropped by -0.17 percent.

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