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Gold

Gold faced a substantial -1.3% drop, closing at 57,672, influenced by the strengthening US dollar amid expectations of further Federal Reserve interest rate hikes in 2024. US treasury yields surged to their highest levels since 2007, with the anticipation of prolonged high interest rates in 2024 and another rate hike later this year to combat inflation. Multiple Fed officials hinted at the need for another rate hike, with Minneapolis Fed President Neil Kashkari suggesting a 40% likelihood of such a move. While current pricing for a 0.25% interest rate hike in November remains low at 20%, expectations for a 0.25% Fed rate hike are higher at 40%. Investors are eagerly awaiting US personal spending data to assess inflation trends and anticipate US policy directions. In the gold market, holdings at the SPDR Gold Trust declined for the third consecutive day, reaching their lowest level since August 2019. However, China's net gold imports via Hong Kong surged by approximately 51.4% in August compared to the previous month, indicating robust demand from the world's leading gold consumer. From a technical perspective, the market saw long liquidation, with a sharp -49.57% drop in open interest to 2,111 contracts, and prices fell significantly by -760 rupees.

Trading Ideas:
* Gold trading range for the day is 57085-58745.
* Gold fell as dollar's gains amid prospects the Federal Reserve might raise interest rates once more before the year end
* Several Fed officials hinted at another interest rate hike this year as the battle with inflation carries on.
* Fed’s Kashkari said there's a 40% chance the Fed will need to raise interest rates once more to combat inflation.


Silver

Silver prices experienced a notable decline of -1.71%, settling at 70,549, as the US dollar strengthened on hawkish remarks from Federal Reserve officials and robust US economic data. The dollar marked its fifth consecutive session of gains, reaching levels not seen since late November, as expectations grew that interest rates would remain high for an extended period. Rising oil prices also raised concerns about potential inflationary pressures. The Fed's recent decision to maintain the fed funds rate while adopting a hawkish stance and hinting at another rate hike has been supported by subsequent comments from several Fed officials. Meanwhile, market participants believe that the European Central Bank (ECB) and the Bank of England (BoE) may have concluded their rate hike cycles due to signs of economic weakness in their respective regions. ECB President Christine Lagarde mentioned that the ECB believes its policy rates are now at levels conducive to achieving the inflation target. In terms of US economic data, new orders for manufactured durable goods unexpectedly rose by 0.2% month-over-month in August 2023, rebounding from a revised 5.6% decline in July and surpassing market expectations. From a technical perspective, the market witnessed fresh selling, with a 14.23% increase in open interest to 22,718 contracts, and prices fell significantly by -1,228 rupees.

Trading Ideas:
* Silver trading range for the day is 69760-71910.
* Silver dropped as dollar rose amid hawkish comments by Fed officials and strong US economic data.
* The dollar extended gains for a fifth consecutive session to approach 106.5 on Wednesday, the highest level since late-November
* Fed kept the fed funds rate steady but took a hawkish stance and signalled one more rate hike would still be necessary.


Crude oil 

Crude oil saw a notable 3.3% increase in its price, settling at $77.92 per barrel yesterday. This surge was driven by growing concerns regarding a tightening global supply, especially as we approach the winter season. In the US, crude oil inventories dropped significantly, declining by 2.17 million barrels for the week ending September 22, 2023. This drop exceeded market expectations of a 0.32 million barrel decrease and followed a 2.13 million barrel decline in the previous week. However, it's worth noting that crude stocks at the Cushing, Oklahoma delivery hub saw their smallest decline in six weeks, falling by 0.943 million barrels. Gasoline stocks, on the other hand, surprisingly rose by 1.027 million barrels, contrary to a forecasted 0.12 million barrel decrease. Distillate stockpiles, which include diesel and heating oil, also saw an unexpected increase of 0.398 million barrels, while consensus had anticipated a 1.298 million barrel drop. One critical factor contributing to the decline in US crude stockpiles is the strong demand for refining and exports, which has led to the storage hub at Cushing, Oklahoma, reaching its lowest levels in 14 months, with stocks dipping below 23 million barrels by September 15. From a technical perspective, the market is experiencing fresh buying interest, with open interest rising by 46.36% to settle at 11,350. Crude oil prices have also seen a substantial increase of 249 rupees. Support for crude oil is currently seen at 7,632, and if this level is breached, we could witness a test of 7,473. On the upside, resistance is anticipated at 7,886, and if prices surpass this level, further testing at 7,981 could occur.

Trading Ideas:
* Crudeoil trading range for the day is 7473-7981.
* Crude oil rose as concerns about tightening global supply heading into winter gripped the market.
* Crude oil inventories in the US fell by 2.17 million barrels, following a 2.13 million decline in the previous period
* Crude stocks at the Cushing, Oklahoma, delivery hub went down by 0.943 million barrels, the smallest decline in six weeks


Natural gas

Natural gas prices surged by 2.95%, reaching 244.1, driven by forecasts of higher-than-expected demand in the coming two weeks and a decline in daily production. Gas production in the US dropped to 102.11 billion cubic feet per day (bcfd) in September, down from the August record of 102.3 bcfd. The oil and gas rig count, a leading indicator of future output, fell by eleven to 630 in the week ending September 22nd. Average gas output in the lower 48 US states dipped to 102.0 bcfd in September, with daily output on track to decline by 2.6 bcfd, hitting a preliminary five-month low of 99.4 bcfd. Weather forecasts indicated warmer-than-normal conditions through at least October 12. Additionally, increased liquefied natural gas (LNG) and pipeline exports are expected to boost US gas demand, including exports, from 95.1 bcfd this week to 95.5 bcfd next week. Pipeline exports to Mexico also rose, reaching an average of 7.2 bcfd in September, up from the previous record of 7.1 bcfd in August. From a technical perspective, the market saw short covering, with a -14.76% drop in open interest to 19,612 contracts, and prices increased by 7 rupees.

Trading Ideas:
* Naturalgas trading range for the day is 236.5-249.5.
* Natural gas prices gained on forecasts of higher-than-previously expected demand.
* Gas production in the US eased to 102.11 bcfd in September, down from the August record of 102.3 bcfd
* Average gas output in the lower 48 U.S. states slid to 102.0 billion cubic feet per day (bcfd) so far in September

Copper 

Copper prices experienced a -0.42% decline, settling at 709.25, due to ongoing pressure from a robust US dollar and global industrial sentiment. Lingering concerns about China's property developers and the country's macroeconomic challenges persisted, despite intermittent improvements in industrial growth and new loans. The hawkish stance of the Federal Reserve and mounting growth worries in Europe further weighed on industrial activity, reflected in months of contracting manufacturing PMIs. However, copper futures avoided steeper declines as market participants highlighted the looming copper deficits, with current production unable to keep pace with rising demand for electrification. Chile's state-owned copper producer, Codelco, saw a significant 14% drop in output in the first half of the year, adding to the 7% decline from 2022. Codelco anticipates a production recovery starting next year and emphasized the importance of not delaying ongoing projects. From a technical perspective, fresh selling was observed, with a slight 0.45% increase in open interest to 8,691 contracts, and prices declined by -3 rupees.

Trading Ideas:
* Copper trading range for the day is 706.4-713.6.
* Copper fell amid persistent pressure from a strong dollar and weak industrial sentiment
* Pressure seen as renewed concerns over the financial health of property developers maintained worries
* Output from Chilean state-owned Codelco sank by 14% in the first half of the year, stretching the 7% decline from 2022.


Zinc

Zinc prices dipped by -0.6%, closing at 222.05, as concerns loomed over demand in China, the world's top metals consumer. This decline was compounded by the persistent strength of the US dollar and expectations of higher interest rates in the near term. Data from the International Lead and Zinc Study Group (ILZSG) indicated that the global zinc market surplus narrowed to 17,400 metric tons in July from the previous month's 75,900 tons. Throughout the first seven months of the year, there was a global surplus of 495,000 metric tons, in contrast to a surplus of 199,000 tons during the same period last year. Commerzbank's analysis suggests that zinc prices are likely to move sideways, influenced by subdued prospects for the Chinese real estate market, which has a direct impact on zinc demand. In China, zinc ingot inventories across major markets totaled 91,400 metric tons, with a slight decrease of 3,000 metric tons from the previous week but an increase of 8,900 metric tons from the prior Monday. The decline in inventory was primarily due to pre-holiday stockpiling in Shanghai, Guangdong, and other regions. Regarding production, SMM China reported that refined zinc output in August 2023 was 526,500 metric tons, representing a month-on-month decrease of 4.46% but a year-on-year increase of 13.78%, although falling short of expectations. From a technical perspective, the market experienced long liquidation, with a -3.9% drop in open interest to 4,168 contracts, and prices decreased by -1.35 rupees.

Trading Ideas:
* Zinc trading range for the day is 219.9-224.5.
* Zinc dropped due to concerns about demand in China
* Global zinc market surplus falls in July – ILZSG
* Commerzbank suggests that the zinc price is likely to trend more or less sideways


Aluminium

Aluminium prices edged down by -0.15%, closing at 205.45, amid growing concerns about instability in China's property development sector. Bond payment issues with companies like Evergrande and Country Garden raised worries about financial contagion, particularly affecting construction materials. Commerzbank remains confident in its prediction of an aluminium price reaching $2,400 per ton by the end of 2023. This confidence stems from robust demand in China, a major consumer of aluminium. China, the world's leading producer, has restricted production capacity expansion beyond the current limit of 45 million tons to prevent oversupply and increased energy consumption from outdated infrastructure. Additionally, Indonesia's ban on bauxite exports, a key aluminium ore, poses potential supply constraints. Market players suggest that growing demand for solar panels and electric vehicles in China could offset the decline in aluminium usage in construction, potentially leading to increased purchasing activity. Global primary aluminium production reached a record high in August, with smelters operating at an annualized rate of 71.2 million metric tons, marking the second consecutive month above the 70-million metric ton mark. From a technical perspective, the market saw long liquidation, with a -1.12% drop in open interest to 3,880 contracts, and prices decreased by -0.3 rupees.

Trading Ideas:
* Aluminium trading range for the day is 203.7-206.9.
* Aluminium pressure seen amid mounting concerns about instability from Chinese property developers.
* Commerzbank expresses confidence in predicting an aluminum price of $2,400 per ton at the end of 2023.
* China, halted the expansion of production capacity beyond the current limit of 45 million tons as Beijing attempts to prevent oversupply


Cotton

Cotton prices showed a 0.63% increase, closing at 60900, due to reports of a pink bollworm infestation affecting the cotton belt in Haryana. However, the global cotton industry is grappling with reduced production and consumption according to the 2023-24 Cotton outlook. In the United States, projections for 2023/24 indicate higher beginning stocks but lower production, exports, and ending stocks. Unexpectedly large warehouse stocks for July 31, 2023, contributed to higher beginning stocks for 2022/23. U.S. cotton production is forecasted to be 860,000 bales lower this month, with reduced exports and ending stocks. The season-average price for upland cotton in 2023/24 is projected at 80 cents per pound. On a global scale, projections for 2023/24 indicate lower beginning stocks, production, consumption, trade, and ending stocks compared to the previous month. India is expected to produce 330-340 lakh bales of cotton in the 2023-2024 season starting on October 1. The Indian Cotton Federation reported significant sowing, and the current season saw 335 lakh bales arriving in the market. Cotton area in Telangana decreased due to unfavorable seasonal conditions. Cotton picking is set to gain momentum in the State in November. The center has assessed a positive pre-sowing price forecast for cotton in 2023-24, expecting normal rainfall and increased crop area. In the Rajkot spot market, cotton prices closed at 29005.85 Rupees, registering a minor gain of 0.02%. From a technical perspective, the market witnessed fresh buying with a 3.96% increase in open interest, settling at 105. Prices surged by 380 rupees. Support for Cottoncandy is currently at 60740, with potential testing of 60570 levels on the downside. Resistance is likely at 61040, with the possibility of prices reaching 61170 on an upward move.

Trading Ideas:
* Cottoncandy trading range for the day is 60570-61170.
* Cotton gains on reports the cotton belt of Haryana, is witnessing an attack by pink bollworm.
* India is expected to see production of 330 lakh to 340 lakh bales in 2023-2024 that begins on October 1.
* China's cotton production was lowered to 5.9 million metric tons on reduced planted area for 2023/24
* In Rajkot, a major spot market, the price ended at 29005.85 Rupees gained by 0.02 percent.


Turmeric

Turmeric prices saw a significant decline of -4.39%, closing at 13080, driven by an improved production outlook. Market participants chose to sell off their positions in anticipation of increased supplies in the coming months. The current market has seen subdued demand due to the predominance of inferior quality produce. However, potential losses are expected to be limited due to better export prospects. Demand for turmeric has been on the rise in both developed and developing countries, resulting in a 25% increase in exports. Farmers have shifted their focus, leading to expectations of a 20-25% decrease in turmeric sowing this year, especially in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Turmeric exports from April to July 2023 increased by 15.05% compared to the same period in 2022. From a technical standpoint, fresh selling was observed in the market, with a 0.57% increase in open interest, settling at 14220. Prices experienced a notable decline of -600 rupees. Turmeric's support level is currently at 12756, with the potential for testing 12432 levels on the downside. Resistance is likely at 13570, with the possibility of prices reaching 14060 on an upward move.

Trading Ideas:
* Turmeric trading range for the day is 12432-14060.
* Turmeric dropped driven by improved production outlook.
* Market participants offloaded their positions in anticipation of rise in supplies in coming months
* Demand has been subdued at prevailing levels as most of the produce are coming in the market are inferior quality.
* In Nizamabad, a major spot market, the price ended at 13327.1 Rupees dropped by -0.08 percent.


Jeera

Jeera prices fell by -1.63% to settle at 58920 as profit booking followed recent gains driven by shrinking local supplies. Heightened festive demand and limited availability of quality crops prompted millers to buy during price dips. Despite this, Indian jeera prices remained competitive globally, which subdued overseas demand. Unfortunately, this competitive pricing doesn't favor exporters, and China, a major buyer, has reduced its purchases in recent months, impacting overall Indian exports. The possibility of China resuming purchases in October-November before new cumin arrivals adds uncertainty to the market. The dry weather in Gujarat is expected to increase arrivals, potentially capping upward price movements. According to FISS forecasts, cumin demand is expected to exceed supply this year. However, jeera exports during April-July 2023 dropped by 7.99% compared to the same period in 2022. Weather-wise, the south-west monsoon is set to withdraw in the coming weeks, following a somewhat erratic pattern this year. In Unjha, a major spot market, jeera prices concluded at 60154.25 Rupees, with a minor decline of -0.02%. Technically, the market witnessed fresh selling, with a 0.13% increase in open interest, settling at 4692. Prices saw a significant drop of -975 rupees. Jeera's support level is currently at 58310, with potential testing of 57690 levels on the downside. Resistance is likely at 59950, with the possibility of prices reaching 60970 on an upward move.

Trading Ideas:
* Jeera trading range for the day is 57690-60970.
* Jeera dropped amid profit booking after prices gained due to shrinking supplies in the local market.
* Increased festive demand and limited availability of quality crops in the market is prompting miller to buy
* However, sluggish export demand is still a major concern for Indian traders
* In Unjha, a major spot market, the price ended at 60154.25 Rupees dropped by -0.02 percent.