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Gold

Gold prices fell by 0.68%, settling at ?71,426 amid mixed U.S. jobs data that raised uncertainty over the scale of an anticipated interest-rate cut by the Federal Reserve. The U.S. economy added 142,000 jobs in August, below expectations of a 160,000 increase, and the payroll count for the previous month was revised downward by 25,000. This capped a week of disappointing labor market data, with similar downward surprises from the ADP, Challenger, and JOLTS reports. Despite this, comments from Fed officials like San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee suggested that rate cuts could be on the horizon, citing slower inflation and economic growth as justifications. On the global demand front, gold discounts in India surged to a seven-week high as high prices hurt consumer demand. Indian dealers offered discounts of up to $13 per ounce, an increase from last week's $8 discount. In China, demand remains weak amid record prices, with discounts reaching up to $8. Meanwhile, gold in Singapore and Japan traded at par or with modest premiums of up to $2.20 and $0.50, respectively. The World Gold Council reported a 5% drop in India's gold demand in Q2 2024, but demand is expected to improve in the second half due to a correction in local prices following the recent reduction in import taxes. Technically, the market is under long liquidation, with open interest dropping by 2.12% to settle at 15,037 contracts. Gold prices are now supported at ?71,015, with a potential test of ?70,610 if this level is breached. Resistance is seen at ?72,030, and a move above this could push prices towards ?72,640.

Trading Ideas:
* Gold trading range for the day is 70610-72640.
* Gold eased after mixed U.S. jobs data cast doubts on the scale of interest-rate cut from Fed.
* Fed’s Goolsbee said that the longer-run trend of the labor market and inflation data justify easing interest-rate policy soon.
* Gold discounts in India surged to a seven-week high as rising prices hurt demand

Silver

Silver prices fell by -2.59% to 82,757, as mixed U.S. jobs data cast doubts on the scale of the Federal Reserve's upcoming interest rate cuts. The U.S. economy added 142,000 jobs in August 2024, more than the downwardly revised 89,000 in July, but still below the forecast of 160,000. The unemployment rate eased to 4.2%, in line with expectations, while the ADP National Employment Report showed the smallest gain in private-sector employment since January 2021, with only 99,000 jobs added. This figure was well below market expectations of 145,000 and was accompanied by a downward revision of the previous month's data. Job openings also fell to a three-and-a-half-year low of 7.673 million in July, indicating a weakening labor market. India's silver imports surged, driven by demand from the solar panel and electronics sectors, along with investor interest in silver as a potentially more lucrative investment compared to gold. India, the world's largest silver consumer, imported 4,554 metric tons in the first half of 2024, a significant increase from 560 tons a year ago. This spike in imports is due to industrial buyers replenishing depleted inventories in anticipation of rising prices. Technically, the silver market is under fresh selling pressure, with open interest rising by 10.67% to 32,671 contracts. Silver is currently finding support at 81,470, and a break below this level could test 80,175. On the upside, resistance is expected at 84,910, and a move above that could push prices toward 87,055.

Trading Ideas:
* Silver trading range for the day is 80175-87055.
* Silver dropped after mixed U.S. jobs data raised doubts about the size of Fed’s interest rate cuts.
* The US economy added 142K jobs in August 2024, more than a downwardly revised 89K in July.
* The US unemployment rate eased to 4.2% in August of 2024 from the October 2021 high of 4.3% in the prior month.

Crude oil prices declined by 1.82%, settling at ?5,704, driven by persistent concerns about the global oil demand outlook. The drop was fueled by weaker-than-expected U.S. private sector and non-farm payroll growth data, alongside the possibility of increased oil supply from Libya. OPEC+ is reportedly nearing an agreement to delay the planned October oil output increase, which was set to add 180,000 barrels per day. This decision comes in response to crude prices hitting their lowest levels in nine months and the group's efforts to support market prices amid demand uncertainty and rising non-OPEC supply. Libyan oil exports remained largely halted, but some tankers have been allowed to load crude from storage. The Kriti Samaria tanker, for instance, is set to load 600,000 barrels of crude from Libya’s Zueitina port and transport it to Italy. Meanwhile, U.S. crude oil inventories dropped by a significant 6.9 million barrels in the last week of August, far exceeding expectations of a 1.1 million barrel draw. This marked the ninth consecutive weekly decline in domestic oil stocks. However, gasoline inventories rose by 0.8 million barrels, against expectations of a 0.7 million barrel draw, while distillate fuel inventories fell by 0.4 million barrels. From a technical perspective, crude oil is under fresh selling pressure, with open interest increasing by 0.25% to 21,233 contracts. Prices are currently supported at ?5,606, and a break below this level could see a test of ?5,509. On the upside, resistance is seen at ?5,851, and a move above this could push prices toward ?5,999.

Crude oil

Trading Ideas:
* Crudeoil trading range for the day is 5509-5999.
* Crude oil prices fell weighed down persisting concerns about the outlook for oil demand.
* OPEC+ postponed its planned production increase of 180,000 barrels per day until December
* US crude stocks fell by 6.9 million barrels, marking the ninth consecutive decline in oil stocks over last ten months.
 

Natural gas

Natural gas prices edged up by 0.05%, settling at ?191, amid forecasts for less hot weather over the next two weeks, which could reduce demand for gas used by power generators to run air conditioners. Despite the marginal increase in prices, the outlook remains influenced by a combination of factors. Gas flow to LNG export plants has been rising, while producers continue to limit output. Oversupply has weighed on prices for much of the year, with storage levels still about 10% higher than the five-year average, even though injections have been below average in 16 of the last 17 weeks. In terms of production, gas output in the Lower 48 U.S. states fell to an average of 102.2 bcfd so far in September, down from 103.2 bcfd in August. Preliminary data suggests output dropped by 2.1 bcfd over the past six days to a preliminary 11-week low of 101.7 bcfd. The U.S. EIA revised its forecast, predicting a larger decline in natural gas output this year due to record-low prices earlier in 2024. The EIA expects output to average 103.3 bcfd in 2024, down from 103.8 bcfd in 2023. Meanwhile, U.S. utilities added 13 billion cubic feet (bcf) of gas to storage during the last week of August, far below market expectations of 28 bcf, offset by a decline in gas storage in the South Central region. Technically, the market is under fresh buying pressure with a 1.63% gain in open interest, settling at 34,642 contracts. Natural gas prices are supported at ?188.3, with further downside potential to ?185.5, while resistance is seen at ?193.6, and a breakout could lead to a test of ?196.1.

Trading Ideas:
* Naturalgas trading range for the day is 185.5-196.1.
* Natural gas settled flat amid forecasts for less hot weather over the next two weeks.
* There was still about 10% more gas in storage than normal for this time of year.
* Gas output in the Lower 48 U.S. states slid to an average of 102.2 bcfd so far in September

Copper

Copper prices fell by -1.3% to 781.9, as weak U.S. manufacturing and labor market data reignited fears of a recession, impacting the demand outlook for industrial metals like copper. Concerns about slowing demand in China, the world’s largest copper consumer, added to the bearish sentiment. Australian mining giant BHP downgraded its forecast for China's copper demand due to worries over the country’s sluggish economic recovery. Additionally, China’s manufacturing activity contracted further in August, exacerbating concerns about slowing copper consumption. Goldman Sachs also lowered its copper price forecast for 2025 to $10,100 per ton, down from a previous estimate of $15,000, reflecting weaker prospects for the metal. Despite this, some positive signals emerged, with the Yangshan premium, an indicator of China's copper import appetite, swinging to $62 per ton after a discount in July. Meanwhile, the global refined copper market posted a 95,000 metric tons surplus in June, compared to 63,000 metric tons in May, according to the International Copper Study Group (ICSG). For the first six months of 2024, the copper market had a 488,000 metric tons surplus, significantly higher than the 115,000 metric tons surplus a year earlier. On the technical front, copper is under fresh selling pressure, with open interest rising by 5.88% to settle at 12,174 contracts. Copper is finding support at 776.4, and a break below this could test 770.9 levels. On the upside, resistance is expected at 792.2, and a move above that could see prices testing 802.5.

Trading Ideas:
* Copper trading range for the day is 770.9-802.5.
* Copper dropped as weak US manufacturing and labor market data reignited recession fears.
* Official data showed that manufacturing activity in China contracted further in August.
* BHP Group downgraded its forecast for China’s copper demand amid concerns about the country’s economic recovery.
 

Zinc

Zinc prices fell by 1.26%, settling at ?253.7, primarily impacted by the earlier-than-expected resumption of production at Russia’s Ozernoye zinc mine. The plant, which faced delays due to a fire and U.S. sanctions, has started producing zinc concentrate and aims to reach full capacity by 2025, processing up to 6 million tons of ore annually. This unexpected increase in supply put downward pressure on prices. Additionally, China’s central bank indicated plans to guide market interest rates closer to policy rates, potentially influencing market liquidity and industrial demand, including for base metals like zinc. On the supply front, the global zinc market saw a reduced surplus, 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 China, refined zinc production in July fell by 10.3% month-over-month, totaling 489,600 metric tons, due to unexpected production cuts in regions like Yunnan, Guangdong, and Guangxi. The heavy rainfall in Sichuan also contributed to disruptions, alongside maintenance activities in Henan, Inner Mongolia, and other provinces. Technically, zinc is under fresh selling pressure, with open interest rising by 0.94% to 2,794 contracts. The decline in prices by ?3.25 reflects concerns over increased supply from Russia and reduced Chinese production. Zinc is now finding support at ?251.6, with a further test of ?249.5 possible if this level is breached. On the upside, resistance is expected at ?257.7, and a move above this level could see prices testing ?261.7 in the near term.

Trading Ideas:
* Zinc trading range for the day is 249.5-261.7.
* Zinc dropped after Russian zinc miner Ozernoye started production.
* Russia launches major zinc concentrate plant after delays linked to fire, US sanctions
* China to better guide market rates to stay near policy rate, PBOC official says

Aluminium

Aluminium prices fell by -1.14% to 217.6 as concerns over global economic growth weighed on industrial metals. Weak manufacturing data from China, the world’s largest aluminium producer and consumer, added to the pressure. The official survey indicated that China's manufacturing sector sank to a six-month low in August, with factories struggling to secure new orders. However, aluminium inventories in Shanghai Futures Exchange warehouses dropped by 1.4%, signaling some strength in demand. Despite the price decline, the downside was limited as the aluminium market enters its traditional peak season. Consumption is gradually recovering, and there are signs that inventory reductions may be stabilizing. LME aluminium inventories have fallen by 22% over the past three months, reaching their lowest level since May 8, now standing at 877,950 tons. Additionally, China exported 146,708 tons of alumina in July, a 9.6% increase year-on-year, with the majority going to Russia. On the production side, China’s aluminium output surged in July, with a 6% year-on-year increase to 3.68 million metric tons, the highest monthly output since 2002. Global aluminium production also rose by 2.4% year-on-year to 6.194 million tons, with China contributing a significant portion. Technically, aluminium is under fresh selling pressure, with open interest rising by 6% to 4,081 contracts. The market is currently finding support at 216.3, and a break below this could lead to testing 214.9 levels. On the upside, resistance is seen at 220.2, and a move above could push prices toward 222.7.

Trading Ideas:
* Aluminium trading range for the day is 214.9-222.7.
* Aluminium dropped amid concerns about global economic growth.
* China's manufacturing data sank to a six-month low last month
* Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.4% from last Friday.

Cottoncandy

Cottoncandy prices settled lower by -0.2% at 59,040, tracking weakness in ICE prices due to slow demand and improved crop conditions. In the current kharif season, cotton acreage in India has decreased by approximately 9%, standing at 110.49 lakh hectares (lh) compared to 121.24 lh last year. The Cotton Association of India (CAI) expects the total acreage for the year to be around 113 lh, down from 127 lh the previous year. The drop in cotton acreage is attributed to farmers shifting to other crops due to lower yields and high production costs. Despite the reduced acreage, India's cotton exports have unexpectedly increased, with exports to Bangladesh rising from 15 lakh bales to 28 lakh bales due to strong demand. For 2023-24, India's cotton production and consumption are both estimated at 325 lakh bales. CAI also noted that the stock held by spinning mills, ginners, and Cotton Corporation of India totals around 60 lakh bales, with an additional 10 lakh bales expected to arrive during August and September. Globally, the 2024/25 cotton balance sheet reflects reduced production, consumption, and stocks, driven mainly by lower production in the U.S. and India. World ending stocks are down by 5 million bales from July to 77.6 million bales, with revisions also lowering estimates for the 2023/24 season. Technically, the market is under long liquidation, as open interest dropped by -4.49% to settle at 149 contracts. Cottoncandy finds support at 58,990, with further downside potentially testing 58,940 levels. Resistance is seen at 59,100, and a break above could push prices to test 59,160.

Trading Ideas:
* Cottoncandy trading range for the day is 58940-59160.
* Cotton prices dropped tracking weakness in ICE prices due to slow demand, improved crop conditions.
* 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 declined by 1.34%, settling at ?14,014, largely due to reports of increased sowing. Turmeric sowing has doubled on the Erode line compared to last year, and sowing in key states like Maharashtra, Telangana, and Andhra Pradesh is estimated to be 30-35% higher than last year. This surge in sowing, along with low export demand, is exerting downward pressure on prices. However, the downside is limited by tighter supplies in the market and emerging buying interest from stockists who anticipate higher prices in the future. Additionally, farmers are holding back stocks, expecting further price rises. In Indonesia, dry weather has accelerated turmeric harvesting, contributing to the global supply. However, many farmers are selling their crops in the wet stage, potentially leading to reduced overall production. Domestically, India’s turmeric production for 2024 is estimated at 45-50 lakh bags, with an additional carryover stock of 35-38 lakh bags. Despite increased sowing this season, the total supply is expected to be less than consumption in 2025, supporting long-term prices. Export data shows a 19.52% decline in turmeric exports during April-June 2024 compared to the same period in 2023, which has added to the short-term price weakness. However, imports during the same period surged by 485.40%, reflecting a shift in market dynamics. Technically, the market is under long liquidation, with open interest dropping by 2.41% to 16,225 contracts. Turmeric prices are finding support at ?13,796, with a further test of ?13,578 possible if this level is breached. On the upside, resistance is expected at ?14,286, and a move above this could lead to a test of ?14,558.

Trading Ideas:
* Turmeric trading range for the day is 13578-14558.
* Turmeric prices dropped amid news of increased sowing.
* However downside seen limited amid tighter supplies in the market and emerging buying from stockists.
* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.
* In Nizamabad, a major spot market, the price ended at 14423.6 Rupees dropped by -0.33 percent.
 

Jeera

Jeera prices declined by -1.05% to 25,350, driven by expectations of higher production this season. Jeera production is projected to rise by 30% to 8.5-9 lakh tonnes due to a significant increase in cultivation area. The sowing area in Gujarat has increased by 104%, while Rajasthan has seen a 16% rise. However, the downside in prices was limited by strong domestic and export demand, along with tight global supplies. Farmers are also holding back stocks in anticipation of better prices. Globally, China's cumin production has surged, reaching 55-60 thousand tons, up from the previous 28-30 thousand tons. Increased production in Syria, Turkey, and Afghanistan is also expected to bring more supply into the market, putting pressure on prices. Turkey's production is estimated at 12-15 thousand tons, and Afghanistan's output could potentially double, weather permitting. India's cumin exports saw a volatile period in 2023, but are expected to improve in 2024 due to favorable production conditions. Jeera exports during April-June 2024 increased by 46.56%, totaling 73,770.58 tonnes, compared to 50,335.70 tonnes in the same period last year. The increase in sowing area and declining international cumin prices are expected to boost exports further. Technically, the market is under long liquidation, with open interest dropping by -9.28% to 1,554 contracts. Jeera is currently finding support at 25,140, with a potential test of 24,940 if prices decline further. On the upside, resistance is expected at 25,600, and a break above this level could push prices to test 25,860.

Trading Ideas:
* Jeera trading range for the day is 24940-25860.
* Jeera dropped as the expectation of higher production weighed on the prices.
* However downside seen limited amid robust domestic and export demand besides tight global supplies.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* jyrj In Unjha, a major spot market, the price ended at 25488.3 Rupees dropped by -0.09 percent.

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