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Gold

Gold posted a modest gain of 0.04%, settling at 62466, as it found support from a weakening dollar and declining Treasury yields. Investors are closely watching the upcoming U.S. payrolls data, which is expected to provide crucial insights into the Federal Reserve's future interest rate decisions. Signs of a cooling U.S. labor market emerged, with job openings hitting 2-1/2-year lows in October. While the number of Americans applying for first-time unemployment benefits remained relatively unchanged, the U.S. Labor Department reported a marginal increase of 1,000 claims to 220,000 for the week ending Dec. 2. Continuing jobless claims, representing those already receiving benefits, decreased by 64,000 to 1.861 million during the week ending Nov. 25. In contrast, China's net gold imports via Hong Kong declined approximately 23% in October compared to the previous month, according to Hong Kong Census and Statistics Department data. Net imports into the world's leading gold consumer dropped from 34.757 metric tons in September to 26.793 metric tons in October. From a technical standpoint, the gold market is witnessing short covering, as evidenced by a -1.91% drop in open interest, settling at 16339. Despite this, prices experienced an increase of 26 rupees. Support for gold is identified at 62215, with a potential test of 61960 levels if breached. On the upside, resistance is anticipated at 62730, and a breakthrough could propel prices to test the 62990 level.

Trading Ideas:
* Gold trading range for the day is 61960-62990.
* Gold steadied buoyed by a weakness in the dollar and Treasury yields
* U.S. labor market appears to stabilize as the number of America workers applying for first-time unemployment benefits remains roughly unchanged
* Investors awaiting crucial U.S. payrolls data that could help ascertain the Federal Reserve's interest rate trajectory.


Silver
Silver prices experienced a decline of -0.69%, settling at 74313, driven by profit booking as investors awaited the crucial monthly jobs report for insights into the US labor market. Expectations for the November non-farm payrolls include a rise of 170K, a jobless rate at 3.9%, and a slowing wage growth at 4%, the lowest since June 2021. Data indicated a slowdown in the labor market, with initial jobless claims rising less than expected, an increase in announced job cuts, and the lowest number of job openings since March 2021. US wholesale inventories also fell by 0.4% month-over-month in October, contributing to the narrative of economic challenges. The JOLTs survey revealed a more-than-expected decrease in US job openings for October, aligning with signs of a cooling labor market and reinforcing expectations of potential Fed interest rate cuts in the first half of 2023. While the ISM Services PMI in the US exceeded forecasts, the fragility of China's economic recovery, reflected in Moody's revised outlook from "stable" to "negative," added to global economic concerns. Technically, the silver market witnessed long liquidation, with a -2.41% drop in open interest to settle at 14268. With prices down by -518 rupees, silver finds support at 73890, potentially testing 73465, while resistance is expected at 74850, with a move above potentially leading to prices testing 75385.
 

Trading Ideas:
* Silver trading range for the day is 73465-75385.
* Silver dropped on profit booking as investors await a key monthly jobs report.
* Non-farm payrolls are expected to rise by 170K in November, the jobless rate to remain at a 22-month high of 3.9%
* Initial jobless claims rose less than expected, the US employees announced more job cuts in November


Crude oil
Crude oil experienced a slight decline of -0.31%, settling at 5802, as Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman urged all OPEC+ countries to adhere to the group's agreement on output cuts. The joint statement emphasized the alignment of interests with the global economy. The collaborative effort between Russia and Saudi Arabia extended to the importance of enhancing cooperation in oil and gas, including equipment supplies. In the aftermath of the recent OPEC+ meeting, Saudi Arabia committed to extending voluntary oil output cuts of 1 million barrels per day into the first quarter. Simultaneously, Russia pledged to sustain a reduction in oil exports by 300,000 bpd and further trim fuel exports by 200,000 bpd from January to March. However, China's November data indicated a 13.3% decrease in crude oil imports to 42.45 million tonnes from the previous month. Despite this decline, imports of oil products rose by 0.7% to 4.16 million tonnes, while exports of oil products fell by 1.7% to 5.08 million tonnes. Meanwhile, the US continued its robust performance in crude oil exports, reaching nearly a record 6 million barrels a day in October. From a technical standpoint, the market is currently witnessing fresh selling, with a 2.42% gain in open interest, settling at 18664. Despite this, prices experienced a notable decline of -18 rupees. Support for Crude oil is identified at 5740, with a potential test of 5679 levels if breached. On the upside, resistance is anticipated at 5877, and a breakthrough could propel prices to test the 5953 level.
 

Trading Ideas:
* Crudeoil trading range for the day is 5679-5953.
* Crude oil gains after Russia and Saudi Arabia urge all OPEC+ countries to join output deal
* China November crude oil imports down 13.3 % from October
* Saudi Arabia agreed to extend voluntary oil output cuts of 1 mbpd into the first quarter


Natural gas
Natural gas experienced a marginal decline of -0.09% yesterday, settling at 214.8, primarily driven by revised weather forecasts indicating milder conditions and lower heating demand through late December. The futures market has consistently conveyed bearish signals, suggesting that prices for this winter season (November-March) likely peaked in November. This sentiment is underscored by the narrowing premium of futures for March over April, hitting an all-time low of just one cent per mmBtu. Record-level production and ample gas storage further contribute to the prevailing bearish outlook. The average gas output in the Lower 48 U.S. states dipped to 107.3 bcfd in December from a record 107.8 bcfd in November, with a potential further decrease to a preliminary one-month low of 106.0 bcfd. Meteorological projections anticipate a shift in weather patterns from warmer-than-normal (Dec. 7-10) to near-normal (Dec. 11-14) and back to warmer-than-normal conditions (Dec. 15-22). Despite the warmer outlook, LSEG forecasts a rise in U.S. gas demand from 121.5 bcfd this week to 126.4 bcfd next week, with a downward adjustment from their previous outlook. From a technical standpoint, the market is undergoing long liquidation, evidenced by a -16.44% drop in open interest, settling at 36456, while prices experienced a modest decrease of -0.2 rupees. Support for Natural Gas is identified at 208.4, with a potential test of 202.1 levels if breached. On the upside, resistance is expected at 219.9, and a breakthrough could propel prices to test the 225.1 level.
 

Trading Ideas:
* Naturalgas trading range for the day is 202.1-225.1.
* Natural gas eased on forecasts for less cold weather and lower heating demand.
* Average gas output in the Lower 48 U.S. states slid to 107.3 bcfd so far in December from a record 107.8 bcfd in November
* Meteorologists projected the weather would turn from warmer-than-normal from Dec. 7-10 to near-normal from Dec. 11-14


Copper

Copper exhibited a robust performance yesterday, gaining 0.97% to settle at 715.2, fueled by a confluence of factors. The rally was bolstered by strong Chinese export data and a weakened dollar, contributing to positive market sentiment. However, some factors restrained the extent of the gains. The surge was partly attributed to the latest net cancelled warrants in LME-registered warehouses, indicating a decrease of 6,725 metric tons. Notably, China's import of copper saw a notable uptick, rising by 10.1% to 550,565.6 tonnes in November, according to data from the General Administration of Customs. This surge contributed to an increased trade surplus for China in November 2023, reaching USD 68.39 billion, surpassing market forecasts. The unexpected growth in exports by 0.5%, breaking a six-month declining trend, suggests a potential revival in the manufacturing sector, benefiting from an upswing in global trade flows. Conversely, imports fell by 0.5%, missing expectations of a 3.3% gain. The Yangshan copper premium rose to $112.50 a ton, indicating heightened demand for imported copper in China. Technically, the market is witnessing short covering with a notable drop in open interest by -9.56% to settle at 5225. Despite this, Copper is showing resilience, with prices up 6.85 rupees. Support for Copper is identified at 710.7, with a potential test of 706 levels if breached. On the upside, resistance is anticipated at 717.7, and a breakthrough could propel prices to test the 720 level.
 

Trading Ideas:
* Copper trading range for the day is 706-720.
* Copper prices rose helped by strong Chinese export data and a weaker dollar.
* China November copper imports at 550,565.6 tonnes
* China's November exports grew for the first time in six months, data showed.

Zinc

Zinc prices recorded a decline of -0.57%, settling at 217.6, with a focus on assessing the manufacturing health of China and the US, providing insights into global demand dynamics. The Chinese government's commitment to additional sovereign debt, particularly for manufacturing and steel-intensive infrastructure projects, has aimed to offset challenges in the real estate sector and sustain activity in ferrous and base metals commodity markets. China's trade surplus for November 2023 increased to USD 68.39 billion, surpassing market expectations, as exports unexpectedly grew, while imports saw a slight decline. Zinc stocks continued to decrease after a significant growth in November, indicated by daily LME data showing net fresh cancellations of warrants at 21,225 tons. Despite a surge in LME warehouse zinc inventories to a more-than-two-year high of 226,250 at the end of November, signaling subdued economic activity, the ongoing reduction in zinc stocks provides a contrasting picture. Moody's downgrade of China's government credit rating outlook from stable to negative, citing economic uncertainties and property market risks, added an element of caution. Investors are now looking to Chinese trade figures and the latest inflation report for further guidance. Technically, the zinc market witnessed fresh selling, with a 5.56% increase in open interest to settle at 4650, coupled with a price decline of -1.25 rupees. Zinc finds support at 216.7, potentially testing 215.6, while resistance is anticipated at 219.4, with a move above potentially leading to prices testing 221.
 

Trading Ideas:
* Zinc trading range for the day is 215.6-221.
* Zinc prices dropped as markets continued to assess Chinese and US manufacturing health for insights on global demand.
* Zinc stocks continue to decline after sharp November growth with daily LME data showing net fresh cancellations of warrants at 21,225 tons.
* The global zinc market swung to a deficit of 15,400 metric tons in September from a surplus of 28,000 tons in August


Aluminium

Aluminium prices retreated by -0.64%, closing at 195.1, reflecting subdued demand despite previous supply reduction measures. The global economic slowdown, coupled with central banks' restrictive interest rates and a Chinese real estate debt crisis, weighed on key sectors utilizing aluminium. Norwegian firm Norsk Hydro reported a 57% plunge in Q3 aluminium sales, attributing it to downturns in industrial and real estate sectors globally, along with a slowdown in Chinese electric vehicle demand. While China, the leading aluminium producer, halted production capacity expansion to prevent oversupply, concerns linger over sustained lower economic growth and ongoing property sector restructuring, leading Moody's to revise China's credit outlook to "negative." Notably, global primary aluminium output in October rose by 3.9% year-on-year to 6.116 million tonnes, according to the International Aluminium Institute. Technically, the market witnessed fresh selling with a 5.09% increase in open interest to 4891, accompanied by a price decline of -1.25 rupees. Aluminium finds support at 194.1, potentially testing 193, with resistance at 196.7 and a move above aiming for 198.2.
 

Trading Ideas:
* Aluminium trading range for the day is 193-198.2.
* Aluminium fell as evidence of low demand offset previous measures that reduced supply.
* Norwegian aluminum giant Norsk Hydro revealed that the downturn in industrial and real estate sectors across the globe
* China halted the expansion of production capacity beyond the current limit of 45 million tons

Cotton

Cotton prices, represented as Cottoncandy, settled up by 0.25% at 57000 as traders grappled with concerns about limited supplies in the near term. The reduction in certified cotton stocks, deliverable against the contract, to 6,325 bales on December 5th from their recent peak on December 1st indicates a tightening supply situation. Brazilian cotton shipments increased in November, but global concerns persist as the International Cotton Advisory Committee (ICAC) projects that global cotton production may surpass consumption for the second consecutive year. The Cotton Association of India (CAI) revised down its cotton production estimate for the current season to 29.4 million bales, citing damage from pink bollworm infestation in Haryana and significant rainfall deficit affecting cotton production in north Maharashtra. The USDA's November report also raised global ending stocks by 1.6 million bales. On the demand side, sluggish global cotton bookings and a 5-week low in Export Sales for the last week of November contributed to downward pressure on cotton futures. The global cotton balance sheet for the 2023/24 season shows slightly lower consumption but higher production and ending stocks, reflecting uncertainties in the market. In the technical realm, the market is currently witnessing short covering, with a -1.18% drop in open interest to settle at 167. With prices up by 140 rupees, Cottoncandy is finding support at 56580, and a breach below could test 56170. Resistance is expected at 57320, with a potential breakthrough leading to a test of 57650.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56170-57650.
* 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 saw a decline of -1.75%, settling at 12612, driven by slower buying activities in anticipation of stock releases ahead of the new crops in January 2024. The market faced pressure from improved crop conditions attributed to favorable weather, raising concerns about potential yield losses. Farmer concerns in Maharashtra over the location of PM Modi's Turmeric Board in Telangana added to the market dynamics. Despite the downside pressure, limited price drops are expected due to the possibility of yield losses caused by the unfavorable weather conditions. The current levels of buying activity, coupled with decreasing supplies, are anticipated to sustain price stability. Additionally, support is evident from improved export opportunities, as turmeric exports during April-September 2023 rose by 4.14%, totaling 92,025.16 tonnes. However, in September 2023, turmeric exports experienced a drop of 19.75% month-on-month and a more significant decline of 35.06% year-on-year, totaling 9,085.81 tonnes. The decrease in exports is attributed to shifting farmer priorities, potentially impacting seeding levels in key turmeric-producing regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. From a technical standpoint, the market is undergoing long liquidation, with a -0.39% drop in open interest to settle at 10,305. With prices down by -224 rupees, turmeric is currently finding support at 12512, and a breach below could test 12414. Resistance is expected at 12746, with a potential breakthrough leading to a test of 12882.
 

Trading Ideas:
* Turmeric trading range for the day is 12414-12882.
* 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 experienced a significant decline of -5.97%, settling at 37000, driven by increased farmer insistence on cumin sowing. The latest data reveals a notable two-and-a-half times surge in cumin sowing in Gujarat, with a 161% increase in the sown area compared to the same period last year. Similarly, Rajasthan witnessed a 13% expansion in cumin cultivation. This surge in cumin production is contributing to the bearish trend, with farmers responding to favorable sowing conditions. However, this abundance is affecting global demand for Indian jeera, as buyers are opting for alternative sources like Syria and Turkey due to comparatively higher prices in India. The subdued overseas demand is expected to persist in the coming months, aligning with export seasonality. Jeera exports during April-September 2023 reported a significant decline of 29.79%, totaling 76,969.88 tonnes compared to 109,628.78 tonnes in the same period of the previous year. The month-on-month export data for September 2023 reflects an 11.02% drop, and the year-on-year comparison shows a substantial decline of 60.27%. Technically, the market is witnessing long liquidation, with a -6.71% drop in open interest to settle at 2376. With prices down by -2350 rupees, the support level is identified at 36160, and a breach below could test 35320. On the upside, resistance is expected at 38670, with a potential breakthrough leading to a test of 40340.
 

Trading Ideas:
* Jeera trading range for the day is 35320-40340.
* 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.

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