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Gold

Gold prices surged by 1.03% yesterday, settling at 76,390 as safe-haven demand strengthened amid escalating tensions in the Middle East and a decline in U.S. bond yields. Despite this rise, the metal remains below its recent record highs after Federal Reserve Chair Jerome Powell indicated that future rate cuts would likely be smaller, with a preference for quarter-percentage-point reductions. Goldman Sachs has also revised its gold price forecast for early 2025, raising it to $2,900 per ounce from $2,700, citing rising ETF flows, interest rate cuts in Western economies and China, and increased central bank purchases. Additionally, the probability of a 50-basis-point rate cut in November has dropped to 37%, down from over 50% the previous week. In China, net gold imports via Hong Kong plummeted 76% in August, marking the lowest level in over two years, as record-high prices curbed demand. This price rally has affected gold demand across key Asian markets, including China and India, where dealers have been offering significant discounts due to reduced appetite among buyers. In the Indian market, dealers offered a discount of up to $19 per ounce over official domestic prices, compared to last week’s $17 discount. China's discounts ranged from $16 to $7, while in Japan and Singapore, discounts and premiums fluctuated within small ranges. Technically, the gold market is witnessing fresh buying, with open interest rising by 1.2% to settle at 17,183 contracts. Prices increased by 779, with gold finding support at 75,730, and a break below this could test 75,075 levels. On the upside, resistance is seen at 76,815, and a move above this level could push prices toward 77,245.

Trading Ideas:

# Gold trading range for the day is 75075-77245.
# Gold prices rose on safe-haven demand due to Middle East tensions and lower U.S. bond yields.
# Fed Chair Powell suggested the central bank will likely pursue quarter-percentage-point rate cuts moving forward.
# Goldman Sachs raised its gold price forecast to $2,900 per ounce from $2,700 per ounce for early 2025.

Silver

Silver prices rose by 0.72% to settle at 91,375, driven by heightened geopolitical concerns after reports surfaced of a potential Iranian attack on Israel, prompting the U.S. to prepare its defenses. The rise in job openings in the U.S., up by 329,000 to 8.04 million in August 2024, exceeding expectations, also contributed to the market's cautious tone. Despite the strong labor market, Federal Reserve Chair Jerome Powell emphasized the continued progress toward the 2% inflation target, suggesting the Fed will likely cut rates gradually. Chicago Fed President Austan Goolsbee echoed this sentiment, indicating that rate cuts will unfold over a prolonged period to return to normal levels. Global economic uncertainty persisted, with factory activity weakening in September, indicating a challenging outlook. In India, silver demand is on track to nearly double this year, driven by the solar panel and electronics industries, as well as investors viewing silver as a better return prospect than gold. India, the world’s largest silver consumer, imported 4,554 metric tons in the first half of 2024, a sharp increase from 560 tons a year ago. The demand surge is partly due to stockpiling by industrial buyers after depleted inventories in 2023, aiming to hedge against rising prices. Technically, the silver market saw short covering, with a 1.06% drop in open interest, settling at 25,491 contracts. Support is now at 90,690, with a potential test of 90,005 if prices move lower. On the upside, resistance is expected at 92,230, with a break above that level possibly leading to prices testing 93,085. The market remains sensitive to both geopolitical tensions and economic data.
Trading Ideas:
# Silver trading range for the day is 90005-93085.
# Silver gains due to investor fears following reports that Iran might attack Israel, prompting the US to prepare defenses.
# The number of job openings rose by 329,000 to 8.040 million in August 2024 from an upwardly revised 7.711 million in July
# Fed’s Goolsbee reiterated that he sees a case for extensive U.S. central bank interest rate cuts given the current state of the economy.


Crude oil

Crude oil prices surged by 3.36% yesterday, settling at 5,935, following reports that Iran was preparing to launch a missile attack on Israel. This development heightened geopolitical tensions in the Middle East, pushing oil prices higher. The U.S. has indicated it is actively preparing to support Israel against this potential threat, with a senior White House official warning that a direct military attack by Iran would carry severe consequences for Tehran. Additionally, Libya is preparing to restart oil production, which has been halted since late August, following an agreement on a new central bank head. On the demand side, U.S. oil consumption in July reached its highest seasonal level since 2019, rising 1.2% from June to 20.48 million barrels per day (bpd). This demand increase comes as U.S. oil output declined for the second time in three months, highlighting the resilience of U.S. demand compared to other major consumers like China, where economic pressures have subdued consumption. In contrast, China's crude oil imports fell 7% year-on-year in August due to weak refining margins and low fuel consumption, although imports slightly recovered from July's low levels. Crude oil inventories in the U.S. rose by 3.889 million barrels, exceeding expectations of a 1.3 million barrel draw, while stocks at the Cushing, Oklahoma hub increased by 0.84 million barrels. Technically, the market is witnessing short covering as open interest dropped by 17.51% to settle at 14,496, while prices rose by 193. Crude oil has immediate support at 5,658, and a break below could lead to testing 5,382. On the upside, resistance is seen at 6,129, and a move above this level could push prices toward 6,324.

Trading Ideas:
# Crudeoil trading range for the day is 5382-6324.
# Crude oil gains following reports Iran was preparing to launch a missile attack on Israel.
# U.S. oil demand rose in July to the highest seasonal level since 2019.
# Total U.S. oil production fell by 25,000 bpd from June to 13.205 million bpd in July, EIA data showed.
 

Natural gas
Natural gas prices settled down by 0.2% at 243.5, driven by forecasts of lower demand over the next two weeks. This drop in demand is partly attributed to reduced power generation needs, with over 1.7 million homes and businesses still without power in the U.S. Southeast and Midwest following Hurricane Helene's impact. Additionally, the U.S. National Hurricane Center projected a 40% chance of a tropical disturbance strengthening into a cyclone as it moves into the Gulf of Mexico, which could affect demand and supply dynamics. Despite the price decline, lower natural gas output in 2024 has resulted in record-low storage injections for July, August, and likely September. U.S. gas production in the Lower 48 states averaged 101.8 billion cubic feet per day (bcfd) in September, down from 103.0 bcfd in August. The U.S. Energy Information Administration (EIA) forecasts that gas production will ease slightly in 2024 to 103.4 bcfd before rising to 104.8 bcfd in 2025. Meanwhile, U.S. domestic gas consumption is expected to rise to a record 89.9 bcfd in 2024. Additionally, U.S. utilities added 47 billion cubic feet of gas into storage during the week ending September 20, 2024, which was below market expectations of a 52 Bcf increase. Total stockpiles reached 3,492 Bcf, 159 Bcf higher than last year and 233 Bcf above the five-year average. Technically, the market is witnessing long liquidation, with a 10.27% drop in open interest, settling at 18,388 contracts. Natural gas prices have support at 238.3, with a further downside test possible at 233.2. Resistance is expected at 247.7, and a break above this level could see prices testing 252. The market remains influenced by changing demand forecasts and supply dynamics.

Trading Ideas:
# Naturalgas trading range for the day is 233.2-252.
# Natural gas eased on forecasts for less demand over the next two weeks than previously expected.
# That price decline came even as lower output so far this year has cut the amount of the fuel going into storage.
# Storage injections in July, August and likely in September were at record lows.

Copper
Copper prices rose by 0.62% yesterday, closing at 856.6, driven by production delays at Freeport-McMoRan’s Manyar smelter in Indonesia. The smelter, which was expected to begin output in September, will now see its first production in November due to water and steam leakage issues during testing. This delay has created uncertainty in the supply chain, adding upward pressure on prices. Additionally, copper inventories monitored by the Shanghai Futures Exchange (SHFE) increased to 141,625 metric tons, reflecting ample supply, though demand from China, the world’s top consumer, remains solid with a firm premium of $65 per ton for copper imports. On the macroeconomic front, China’s central bank is taking steps to support the struggling property market by advising banks to lower mortgage rates before October 31, potentially boosting demand for industrial metals like copper. However, global copper markets continue to show a surplus, with the International Copper Study Group (ICSG) reporting a 91,000 metric tons surplus in July, down from 113,000 metric tons in June. For the first seven months of 2024, the market recorded a surplus of 527,000 metric tons, significantly higher than the same period last year. China's unwrought copper imports fell to a 16-month low in August, totaling 415,000 tons, down 12.3% year-on-year, signaling weaker demand. However, copper concentrate imports increased by 3.2% for the first eight months of the year. Technically, the market is experiencing fresh buying with a 1.89% rise in open interest, settling at 8,442 contracts, while prices increased by 5.25. Copper has support at 849.6, with a potential test of 842.4. Resistance is seen at 863.1, and a break above could push prices to 869.4.

Trading Ideas:
# Copper trading range for the day is 842.4-869.4.
# Copper gains as copper output at Freeport's Manyar smelter delayed until November
# SHFE Copper inventories rose to 141,625 metric tons on Monday.
# Global refined copper market showed a 91,000 metric tons surplus in July, compared with a 113,000 in June.

Zinc

Zinc prices rose by 1.39% to settle at 284.45, supported by China's economic stimulus measures, which sparked a recovery in market sentiment. China's central bank introduced several policies to support the beleaguered property market, including mortgage rate cuts and easing of home purchase restrictions. Additionally, zinc inventories in warehouses monitored by the Shanghai Futures Exchange (SHFE) fell to 79,980 metric tons, reflecting tightening supply. However, economic concerns lingered as the Caixin China General Manufacturing PMI fell to 49.3 in September 2024, below market expectations and signaling a renewed contraction in new orders, which hit their lowest level in two years. Despite this, the zinc market is expected to remain tight in 2024. The International Lead and Zinc Study Group (ILZSG) revised its forecast, projecting a 164,000 metric ton deficit for the year, driven by reduced output in Europe, China, and other regions. European zinc output is expected to decline by 11.4%, with reductions seen in Ireland, Portugal, and other countries. Meanwhile, production at the Antamina mine in Peru is forecast to drop substantially. However, production increases in Australia, Mexico, and Congo could partially offset these declines. Global zinc metal production is expected to fall by 1.8% in 2024 to 13.67 million tons, while demand is forecast to rise by 1.8% to 13.83 million tons, further tightening the market. Technically, the market is under fresh buying pressure, with open interest rising by 13.39% to 3,717 contracts. Zinc prices have support at 282.5, with a potential test of 280.3 if prices dip further. On the upside, resistance is seen at 286, with a break above this level possibly pushing prices toward 287.3.

Trading Ideas:
# Zinc trading range for the day is 280.3-287.3.
# Zinc gains as economic stimulus measures by China spurred a recovery.
# The global refined zinc market could see a 164,000 metric ton deficit in 2024
# Zinc inventories in SHFE dropped to 79,980 metric tons on Monday.
 

Aluminium

Aluminium prices rose by 0.86% yesterday, closing at 239.65, supported by China's stimulus measures, including liquidity injections, mortgage rate cuts, and easing home purchase restrictions. These efforts provided a strong cushion for the market, enhancing demand within China. Additionally, supply concerns are growing as smelters face hydropower shortages, particularly in southwestern Yunnan province. The global aluminium market is expected to tighten further as demand outside China rises. The discount between LME cash aluminium and the three-month contract narrowed to $2.80 per ton, the smallest gap since April, indicating tighter supplies in the short term. LME aluminium inventories also fell to 792,950 tons, the lowest since May. In China, aluminium inventories fell to 658,000 tons, the lowest since February, while Shanghai Futures Exchange (SHFE) aluminium inventories rose to 280,565 metric tons. China's aluminium output reached 3.73 million tons in August, the highest since 2002, as steady profits and higher prices kept smelters operational. For the first eight months of 2024, China produced 28.91 million tons of aluminium, up 5.1% year-on-year. Globally, primary aluminium output in July rose by 2.4% to 6.194 million metric tons, with China's production up by 2.5% and the rest of Asia increasing by 3.3%. Technically, the aluminium market is experiencing fresh buying as open interest increased by 6.15% to 3,419 contracts, with prices rising by 2.05. Aluminium has support at 237.8, and a break below could test 235.8 levels. On the upside, resistance is seen at 241.3, and a move above this level could push prices toward 242.8. The market outlook remains positive amid tightening supplies and sustained demand from China.

Trading Ideas:
# Aluminium trading range for the day is 235.8-242.8.
# Aluminium prices rose as China stimulus provided a strong cushion.
# The market is expected to tighten as demand rises outside China, BofA said.
# The discount for LME cash aluminium to the three-month contract reached $2.80 a ton, its lowest since late April.
 

Cottoncandy
Cotton candy prices declined by 0.48% yesterday, closing at 57,710 amid moderate demand and weak export activity, particularly to Bangladesh. However, the downside was limited due to expectations of a demand revival from China, following recent stimulus measures, and concerns about potential crop damage in key growing areas from hurricane Helene last week. The USDA lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales and reduced ending stocks to 12.38 million bales, citing crop damage from excessive rains and pest issues. Cotton acreage for the current kharif season is down by approximately 9%, with 110.49 lakh hectares planted, compared to 121.24 lakh hectares during the same period last year. Cotton exports for the 2023-24 season are estimated to reach 28 lakh bales, up from 15.5 lakh bales in the previous year, driven by higher demand from Bangladesh and Vietnam. Imports have also increased to 16.4 lakh bales, up from 12.5 lakh bales the previous year. CAI estimates closing stocks by September 30, 2024, to be 23.32 lakh bales, down from 28.9 lakh bales a year ago. Globally, cotton production, consumption, and trade forecasts for 2024-25 have been lowered, with world ending stocks reduced to 76.5 million bales due to smaller crops in the U.S., India, and Pakistan. Technically, the cotton candy market is under fresh selling pressure, with open interest rising by 0.87% to settle at 116 contracts, and prices declining by 280. Cotton candy has support at 57,560, with potential testing of 57,410. On the upside, resistance is seen at 57,830, and a break above could push prices to 57,950.

Trading Ideas:
# Cottoncandy trading range for the day is 57410-57950.
# Cotton dropped amid moderate demand, with weak export activity, particularly to Bangladesh.
# Cotton exports for the 2023-24 crop year or season ending September are estimated at about 80 per cent at 28 lakh bales
# The U.S. cotton balance sheet for 2024/25 shows lower production, exports, and ending stocks compared to last month.
# In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.
 

Turmeric
Turmeric prices settled down by 0.94% at 13,894 due to profit booking after recent gains, which were driven by reports of significant crop damage due to heavy rains in the Nanded and Hingoli areas. This damage is now expected to be more severe than initially estimated. Market arrivals dropped to 14,915 bags from the previous session's 16,975 bags, with a sharp decline in Sangli, where only 890 bags arrived compared to 11,000 in the prior session. Despite the dip, with five months still left for harvesting, low supply and adverse weather conditions are likely to support prices in the coming weeks. However, the upside is limited by news of increased sowing. In Indonesia, dry weather has accelerated harvesting, currently at its peak, while in India, turmeric sowing has significantly increased. Sowing in the Erode line has doubled compared to last year, and Maharashtra, Telangana, and Andhra Pradesh have seen 30-35% higher sowing levels. The total turmeric area is expected to increase to 3.75-4 lakh hectares this year from 3-3.25 lakh hectares last year. Despite the increase, availability is expected to be lower than consumption in 2025 due to tight stock levels. Technically, the market is under long liquidation, with open interest down by 1.6% to 13,195 contracts. Prices have declined by 132, with support seen at 13,772 and potential to test 13,650. Resistance is likely at 13,984, and a move above this level could push prices toward 14,074. Despite short-term fluctuations, market fundamentals remain supportive of higher prices in the long term due to supply concerns.

Trading Ideas:
# Turmeric trading range for the day is 13650-14074.
# Turmeric dropped on profit booking after prices gained amid reports of crop damage due to heavy rains
# Total arrivals were reported at 14,915 bags, lower than the previous session's 16,975 bags.
# Turmeric sowing on the Erode line is reported to be double as compared to last year
# In Nizamabad, a major spot market, the price ended at 14495.55 Rupees dropped by -0.56 percent.

Jeera

Jeera prices declined by 0.9% yesterday, settling at 26,335, as expectations of higher production exerted downward pressure. However, the downside was limited due to robust domestic and export demand, along with tight global supplies. Farmers are holding back stocks in anticipation of better prices, further supporting the market. The sowing area for jeera in Gujarat has surged by 104%, and in Rajasthan by 16%, contributing to an expected 30% increase in production this season, which is projected to reach 8.5-9 lakh tonnes. Globally, jeera production has risen significantly, with China’s output doubling to 55-60 thousand tons from the previous 28-30 thousand tons. This increase, along with higher production in Syria, Turkey, and Afghanistan, is expected to weigh on prices as new supplies enter the market. Despite this, India's jeera exports have shown strong growth, with a 58.31% rise in exports between April and July 2024, reaching 91,070 tonnes. July 2024 saw exports rise by 110.15% year-on-year, reaching 17,403 tonnes, indicating continued demand in international markets. Technically, the market is experiencing long liquidation, with open interest dropping by 13% to settle at 1,686 contracts as prices fell by 240. Jeera has immediate support at 26,200, and a break below this could lead to testing of 26,050. On the upside, resistance is likely at 26,520, and a move above this level could push prices toward 26,690. While production is increasing, strong export demand and tight global supplies could provide support to prices in the coming months.

Trading Ideas:
# Jeera trading range for the day is 26050-26690.
# 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.
# In Unjha, a major spot market, the price ended at 26521.35 Rupees dropped by -0.06 percent.

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