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Gold

Gold prices dropped by 0.56% to settle at Rs.79,578 as investor sentiment was influenced by easing geopolitical concerns and expectations of rate cuts. U.S. President Donald Trump refrained from imposing tariffs on Colombia after a deal was reached, calming market fears over trade policy. Meanwhile, the Federal Reserve is anticipated to hold rates steady this week, following a 100-basis-point reduction since September. However, markets remain hopeful for further rate cuts this year, with the first expected in May, bolstering the outlook for non-yielding assets like gold. On the demand side, China's net gold imports via Hong Kong plunged by 84% to 5.26 metric tons in December due to elevated gold prices dampening physical demand. Indian dealers offered significant discounts of up to $38 per ounce, the highest in six months, as speculation about potential changes in import duty in the upcoming budget deterred jewelers from restocking. In China, dealers charged a premium of $10 per ounce, slightly higher than the previous week's $3-$13 range, while discounts persisted in Japan. Central bank gold purchases remained strong, driven by emerging markets. The National Bank of Poland increased its reserves by 21 tons in November, while the Reserve Bank of India added 8 tons, raising its 2024 net purchases to 73 tons. The market witnessed long liquidation as open interest dropped by 27.68% to 4,825 contracts. Gold prices are now supported at Rs.79,340, with a break below potentially testing Rs.79,095. Resistance is seen at Rs.79,990, and a move above this could push prices toward Rs.80,395.
 

Trading Ideas:
* Gold trading range for the day is 79095-80395.
* Gold dropped after President Trump held off from imposing threatened tariffs on Colombia
* Fed is expected to hold rates unchanged this week following to pause from the 100bps in cuts since the start of the cycle in September.
* Markets expect the Fed to deliver two rate cuts this year, with a slight consensus for a first move in May.

 

Silver
Silver prices fell by 1.5% to settle at Rs.90,223 as U.S. President Donald Trump reignited trade concerns by threatening tariffs and sanctions on Colombia, following a diplomatic clash over deported migrants. Adding to the bearish sentiment, China's manufacturing activity unexpectedly contracted, while growth in its services sector slowed, weighing on the outlook for silver demand in the world's largest consumer of the metal. The Federal Reserve is expected to keep interest rates steady this week, despite increasing pressure from Trump to cut borrowing costs. In addition, overcapacity in China's solar panel industry has prompted photovoltaic companies to adopt a supply-regulation program, potentially limiting industrial demand for silver from this sector. On the supply-demand front, the global silver deficit is projected to narrow by 4% to 182 million ounces in 2024 as total supply grows by 2%, outpacing a 1% rise in demand. While record industrial usage and recovering jewelry demand are expected to lift total consumption to 1.21 billion ounces, a 16% decline in physical investment poses a challenge. Mine supply is forecasted to rise by 1% due to increased output in Mexico, Chile, and the U.S., while recycling is expected to grow by 5%, driven by a surge in western silverware scrap. The market experienced fresh selling pressure as open interest increased by 6.83% to 23,031 contracts. Silver is now supported at Rs.89,260, with a break below likely testing Rs.88,305. Resistance is seen at Rs.91,280, and a move above this could push prices toward Rs.92,345.
 

Trading Ideas:
* Silver trading range for the day is 88305-92345.
* Silver dropped following US President Trump’s threat to impose tariffs and sanctions on Colombia.
* Market sentiment was also weighed down by data showing that manufacturing activity in China, unexpectedly contracted.
* Fed is widely expected to hold interest rates steady , though it faces increasing pressure from Trump to cut borrowing costs immediately.

 

Crude Oil
Crude oil prices dropped by 1.98% to Rs.6,300 as the U.S. reversed its initial plan to impose sanctions and tariffs on Colombia after reaching an agreement on deported migrants. This eased concerns over immediate supply disruptions. However, market volatility persists, fueled by U.S. President Donald Trump’s strong rhetoric. On the supply side, U.S. crude oil inventories fell for the ninth consecutive week, with a 1.02 million-barrel drop, below the expected 2.1 million-barrel draw. Inventories at the Cushing, Oklahoma hub decreased by 150,000 barrels, while distillate fuel stocks dropped sharply, and gasoline inventories rose further. Meanwhile, Saudi Arabia is likely to increase its official selling price (OSP) for Asian buyers in March, driven by robust demand from China and India amid sanctions-related disruptions to Russian supply. The U.S. Energy Information Administration’s (EIA) latest report highlighted that oil prices may face downward pressure over the next two years due to production growth outpacing demand. The EIA raised its estimate for U.S. oil production to 13.55 million barrels per day for 2024, with significant contributions from the Permian Basin. Global oil production is expected to average 104.4 million barrels per day by 2025, outstripping demand estimates of 104.1 million barrels per day. Crude oil is under long liquidation as open interest dropped by 2.1% to 7,872 contracts. Support is seen at Rs.6,214, with a breach likely testing Rs.6,129. Resistance is expected at Rs.6,439, with a move above potentially targeting Rs.6,579.
 

Trading Ideas:
* Crudeoil trading range for the day is 6129-6579.
* Crude oil prices retreated after the U.S. pulled back from initial sanctions threats against Colombia.
* Saudi Arabia may hike March oil prices for Asia to highest in over a year
* OPEC+ yet to react to Trump call for lower prices

 

Natural Gas
Natural gas prices plummeted by 5.38% to Rs.279.7 as traders responded to weather forecasts predicting a major winter storm across parts of the U.S. Heavy snow is expected in the Southwest and Plains, while severe weather may hit the Southeast and Gulf Coast. However, limited Arctic air is likely to temper potential demand spikes, as snow and rain are forecast for various regions. On the supply side, analysts estimate a 317 billion cubic feet (bcf) gas withdrawal for the week ending January 24, which could erase the inventory surplus over the five-year average for the first time since January 2022. U.S. natural gas output fell in January due to freeze-offs, dropping to 102.0 billion cubic feet per day (bcfd) from December's 104.2 bcfd. However, production is recovering, with a daily output increase to 99.3 bcfd after a sharp decline earlier in the week. LNG exports are expected to rise as the Freeport LNG facility resumes operations, boosting demand. The U.S. Energy Information Administration (EIA) projects record production and demand in 2025, with dry gas output reaching 104.5 bcfd and LNG exports hitting 14.1 bcfd. Despite these longer-term trends, U.S. utilities reported a smaller-than-expected 233 bcf gas withdrawal for the week ending January 17, reflecting current market pressures. The market witnessed fresh selling as open interest surged by 54.23% to 11,285 contracts. Support is seen at Rs.274.1, with further downside testing possible at Rs.268.5. Resistance is at Rs.286.9, with a breakout potentially targeting Rs.294.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 268.5-294.1.
* Natural gas dropped as traders anticipated a major winter storm expected to impact parts of the US this week.
* US utilities withdrew 233 billion cubic feet of natural gas from storage to 2,896 bcf.
* Inventories are 1.9% below the corresponding period of the previous year, but remain 0.7% above the ongoing five-year average.



Copper
Copper prices fell by 1.2% to Rs.826.8, weighed down by weak market sentiment. The decline followed U.S. President Donald Trump's announcement of potential tariffs and sanctions on Colombia, contributing to geopolitical uncertainty. Additionally, disappointing economic data out of China, the largest consumer of copper, added to bearish sentiment. Manufacturing activity unexpectedly contracted, and growth in the services sector slowed, raising concerns about demand. Market caution also intensified ahead of China’s Lunar New Year holiday, further pressuring prices. Supply-side factors played a role as well. Freeport-McMoRan reported lower-than-expected fourth-quarter production and warned of a significant decline in first-quarter output. Chile, the world's top copper producer, revised its production forecast for 2034 downward from 6.34 million tons to 5.54 million tons. Meanwhile, the global refined copper market showed a deficit of 131,000 metric tons in November, compared to a smaller 30,000 metric ton deficit in October, according to the ICSG. This comes despite China's unwrought copper imports rising 17.8% year-on-year in December to a 13-month high of 559,000 metric tons, signaling refiners are replenishing inventories amid increased orders. Copper prices are under fresh selling pressure, with open interest rising by 11.35% to 5,780 contracts. The downside finds support at Rs.821.5, with a break below this level potentially testing Rs.816. Resistance is at Rs.837.2, and a move above could lead to Rs.847.4. Market participants should remain cautious amid volatile fundamentals.
 

Trading Ideas:
* Copper trading range for the day is 816-847.4.
* Copper dropped dampened by US President Trump’s threat to impose tariffs and sanctions on Colombia.
* The decline was also fueled by disappointing economic data, with manufacturing activity in China, unexpectedly contracting.
* Antofagasta reported a modest 1% rise in its 2024 copper production to 664,000 metric tons.


Zinc
Zinc prices declined by 0.26% to Rs.269.25 as market participants awaited clarity on U.S. President Donald Trump's tariff and policy plans. The downside was limited by a continued decline in inventories at LME-registered warehouses, which reached their lowest levels since February 2024, reflecting tight supply. On the demand side, positive signals emerged from China, where industrial output accelerated sharply in December, and credit aggregates showed robust growth, indicating that the People's Bank of China's monetary stimulus is boosting economic activity. Globally, the zinc market recorded a deficit of 52,900 metric tons in November, narrowing from October's 65,400 metric tons, according to ILZSG data. For the first 11 months of 2024, the market faced a deficit of 33,000 metric tons, contrasting with a surplus of 312,000 tons during the same period in 2023. Meanwhile, China's refined zinc production in December increased by over 10,000 metric tons month-on-month, supported by recovery from maintenance and incremental production in key regions such as Qinghai, Shaanxi, and Inner Mongolia. Further growth is anticipated in January 2025, with an expected 15,000 metric ton month-on-month increase in refined zinc production despite some disruptions due to Chinese New Year and maintenance in select regions. Zinc is under fresh selling pressure, with open interest increasing by 4.65% to 2,703 contracts. Support is seen at Rs.267.8, and a break below could test Rs.266.3. Resistance is likely at Rs.271, with a move above potentially targeting Rs.272.7.
 

Trading Ideas:
* Zinc trading range for the day is 266.3-272.7.
* Zinc dropped as investors looked for clarity on U.S. President Donald Trump's tariff and policy plans.
* The global zinc market deficit in November fell to 52,900 metric tons from 65,400 tons in October.
* Industrial output in China accelerated sharply in December and credit aggregates gained traction



Aluminium
Aluminium prices slipped by 0.97% to Rs.249.05 as investors focused on the Federal Reserve's upcoming policy meeting for signals on interest rate directions. Market sentiment remained cautious after U.S. President Donald Trump reignited trade tensions by threatening sanctions and tariffs on Colombia. On the supply front, global primary aluminium output rose by 3% year-on-year in December to 6.236 million tonnes, according to the International Aluminium Institute. Additionally, China's aluminium production climbed by 4.2% year-on-year in December to 3.77 million metric tons, supported by new capacity in Xinjiang, although daily output dropped slightly from November. China's exports of unwrought aluminium and aluminium products grew by 17% year-on-year for the first ten months of 2024, reflecting strong global demand. Meanwhile, aluminium stocks at Japan's major ports surged 13.2% month-on-month to 323,600 metric tons in December. In the EU, the proposed 16th sanctions package includes a ban on Russian primary aluminium imports, consolidating a self-imposed boycott that began after the Ukraine invasion. However, rising production costs have squeezed Chinese producers' margins, with average losses reaching 687 yuan per ton, marking the industry's first losses in three years. Aluminium is under fresh selling pressure as open interest increased by 11.42% to 2,643 contracts. Prices are finding support at Rs.247.3, with a break below likely testing Rs.245.6. On the upside, resistance is pegged at Rs.251.2, and a move above this level could see prices testing Rs.253.4.
 

Trading Ideas:
* Aluminium trading range for the day is 245.6-253.4.
* Aluminium dropped as investors looked forward to Fed policy meeting for clues on the interest rate trajectory.
* Global primary aluminium output in December rose 3% year on year to 6.236 million tonnes - IAI
* Aluminium stocks at three major Japanese ports rose to 323,600 metric tons by the end of December, up about 13.2% from the previous month.

 

Cottoncandy
Cottoncandy prices dropped by 0.83% to Rs.52,850, pressured by upward revisions in crop projections by the Cotton Association of India (CAI) for the 2024-25 season. The estimated cotton output has been increased by 2 lakh bales to 304.25 lakh bales of 170 kg each, driven by higher production in Telangana, where projections rose by 6 lakh bales. However, production in North India is expected to decline by 3.5 lakh bales due to lower kapas arrivals, which have dropped 43% compared to the previous year. The WASDE report also weighed on prices, projecting global cotton production at 117.4 million bales for 2024-25, a 1.2 million bales increase due to higher output in India and Argentina. Despite the pressure from higher supply estimates, downside momentum was limited by strong demand from the garment industry, which has driven cotton yarn prices higher in South India. Exports are also expected to grow, supporting demand. As of December, total supplies stood at 176.04 lakh bales, including imports of 12 lakh bales and an opening stock of 30.19 lakh bales. Consumption during this period was 84 lakh bales, while exports were estimated at 7 lakh bales. The December-end stock is pegged at 85.04 lakh bales. The market is experiencing long liquidation, with open interest dropping by 29.07% to 122 contracts. Cottoncandy prices are supported at Rs.52,480, with a break below this level likely to test Rs.52,110. Resistance is seen at Rs.53,450, and a move above could test Rs.54,050.
 

Trading Ideas:
* Cottoncandy trading range for the day is 52110-54050.
* Cotton dropped as CAI has revised upwards its crop projections by 2 lakh bales
* WASDE report projected higher production and ending stocks for the 2024/25 crop year, adding to the downward momentum.
* Global cotton production is projected to rise by more than 1.2 million bales to 117.4 million bales.
* In Rajkot, a major spot market, the price ended at 25576.1 Rupees dropped by -0.22 percent.

 

Turmeric
Turmeric prices fell by 1.99% to Rs.13,516 as harvesting commenced in Karnataka and Andhra Pradesh, with Telangana expected to follow soon. Despite this decline, concerns about low yield due to slow rhizome growth and adverse weather conditions continue to provide underlying support to prices. Farmers anticipate lower-than-expected yields, with progress in harvesting being closely monitored. Supply pressure is expected to increase after Makar Sankranti with the arrival of the new crop, which may influence the price trend further. Supply constraints persist in the Erode and Warangal markets, with sold goods still pending delivery in the futures market due to a lack of corresponding stock. Additionally, unfavorable weather and the El-Niño effect are likely to impact turmeric production, delaying the arrival of new stocks until April. Domestic consumption remains robust, with high demand in international markets. Last year’s production of 68-70 lakh bags fell short of domestic consumption, estimated at 128 lakh bags, leaving old stock nearly depleted ahead of the new crop's arrival. On the export front, turmeric shipments increased by 9.8% to 121,601.21 tonnes during April-November 2024, compared to 110,745.34 tonnes during the same period in 2023. In November 2024, exports rose by 48.22% year-on-year to 12,721.25 tonnes, despite a monthly decline of 20.18% compared to October 2024. Turmeric is experiencing long liquidation, with open interest down by 2.05% to 11,225 contracts while prices dropped Rs.274. Immediate support is at Rs.13,320, with further downside likely to test Rs.13,124 levels. Resistance is seen at Rs.13,756, with a potential rise toward Rs.13,996 if prices breach this level.
 

Trading Ideas:
* Turmeric trading range for the day is 13124-13996.
* Turmeric dropped as harvesting has commenced in Karnataka and Andhra Pradesh and is expected to commence in Telangana.
* However downside seen limited amid concerns over slow growth of rhizomes and low yield estimates persist.
* With the arrival of new crop likely to increase after Makar Sankranti, supply is expected to increase.
* In Nizamabad, a major spot market, the price ended at 13607.85 Rupees dropped by -1.08 percent.

 

Jeera
Jeera prices dropped by 2.25% to Rs.21,725 due to weak domestic demand and adequate stock availability meeting current export requirements. However, the downside remained limited due to a shortage of overall stocks. Farmers currently hold about 20 lakh bags of cumin, with only 3-4 lakh bags expected to be traded by the season's end, leaving a carry-forward stock of 16 lakh bags. For the current season, production levels are anticipated to remain similar to last year, supported by favorable crop conditions and good sowing. As per Spices Board data, India’s cumin production rose to 8.6 lakh tonnes from an area of 11.87 lakh hectares in 2023-24, compared to 5.77 lakh tonnes from 9.37 lakh hectares the previous year. Indian cumin, priced at $3,050 per tonne, remains the cheapest in the global market. This price advantage is expected to attract significant export demand from countries like China and others, particularly with India being the sole supplier at these competitive rates. Export demand has seen a notable rise, with jeera exports during April-November 2024 increasing by 74.04% to 147,006.20 tonnes compared to the same period last year. November 2024 exports rose by 42.67% year-on-year, even as they dropped by 28.92% month-on-month compared to October 2024. Additionally, tensions in the Middle East have fueled export opportunities, especially from Gujarat, along with increased global and festive demand. Jeera is under fresh selling pressure with open interest increasing by 0.76% to 2,382 contracts while prices fell by Rs.500. Immediate support is at Rs.21,540, with further downside likely to test Rs.21,340. Resistance is seen at Rs.22,030, with prices potentially testing Rs.22,320 if breached.
 

Trading Ideas:
* Jeera trading range for the day is 21340-22320.
* Jeera dropped as demand is low and the current export business is being met from the available stock.
* However downside seen limited amid shortage of stocks is contributing.
* The current season is expected to have similar production levels as last year due to better crop conditions and good sowing.
* In Unjha, a major spot market, the price ended at 22752.7 Rupees dropped by -0.27 percent.

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