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Gold

Gold prices increased by 1.1% to Rs.78,338, supported by China’s monetary easing measures and geopolitical risks in the Middle East. China's ruling Politburo announced plans to loosen monetary policy for the first time in 14 years, boosting sentiment across commodities. Additionally, the People's Bank of China added gold to its reserves after a seven-month pause, enhancing demand. Geopolitical tensions in the Middle East, particularly surrounding Syria, further bolstered safe-haven demand. The global gold market saw a mix of trends. India reported discounts of up to $2 an ounce on domestic prices as a weaker rupee moderated demand, while China observed seasonally low demand with discounts of $11-$15 per ounce. Premiums ranged from $1.20-$2.50 in Singapore and Hong Kong, with flat prices in Japan. Central banks globally reported net gold purchases of 60 tons in October, the highest monthly amount in 2024. India led the buying, adding 27 tons in October and 77 tons year-to-date, marking a five-fold increase from 2023. The World Gold Council highlighted stable year-on-year global gold demand at 1,176.5 metric tons in Q3, as higher investment flows balanced reduced jewelry consumption. Gold is under fresh buying, with open interest rising 9.18% to 14,384. Support is at Rs.77,715, with further downside possible at Rs.77,095. Resistance is seen at Rs.78,660, with a breakout likely testing Rs.78,985.

Trading Ideas:

* Gold trading range for the day is 77095-78985.

* Gold gains supported by China’s policy shift and geopolitical risks in the Middle East.

* China's central bank added gold to its reserves for the first time in seven months, strengthening demand for the precious metal.

* Geopolitical tensions in the Middle East, particularly the instability surrounding the Syrian government, provided additional support

Silver

Silver prices rose by 0.34% to Rs.95,525, supported by China's announcement of additional economic stimulus measures. The Politburo's plan to adopt a “moderately loose” monetary policy and a “proactive” fiscal stance next year boosted the demand outlook for industrial metals in the world's largest consumer. Market sentiment was further lifted by rising expectations of a 25-basis-point rate cut by the U.S. Federal Reserve, with probabilities increasing to 90%. However, cautious remarks from Federal Reserve officials, including Michelle Bowman and Beth Hammack, highlighted persistent inflation risks and mixed labor market data, tempering optimism. Global silver demand is projected to reach 1.21 billion ounces in 2024, marking the fourth consecutive year of structural deficit, according to the Silver Institute. Record industrial demand and a recovery in jewelry consumption are expected to offset a 16% drop in physical investment. Supply will rise marginally, with mine output up by 1% and recycling growing by 5%, led by higher production in Mexico, Chile, and the U.S., and increased scrap from western silverware. In India, silver imports surged to 4,554 tons in the first half of 2024, compared to just 560 tons in the same period last year, driven by robust demand from solar and electronics industries, as well as investor interest in higher returns. Silver witnessed short covering, with open interest declining by 1.54% to 23,596. Prices find support at Rs.94,765, with potential further downside to Rs.94,000. Resistance is at Rs.96,010, and a breakout could lead to testing Rs.96,490.

Trading Ideas:

* Silver trading range for the day is 94000-96490.

* Silver gains as Chinese policymakers unveiled plans for additional economic stimulus, boosting the demand.

* The Politburo announced that China would adopt a “moderately loose” stance on monetary policy and a “more proactive” approach to fiscal stimulus next year.

* Silver, also benefited from growing expectations that the US Federal Reserve will cut interest rates again this month.

Crude oil

Crude oil prices rose by 0.34% to Rs.5,845, driven by optimism surrounding China's economic stimulus plans, which are expected to boost demand in the world's largest oil importer. Additionally, easing geopolitical concerns in Syria added support to the market sentiment. On the supply side, U.S. crude production increased by 20,000 barrels per day (bpd) to a record 13.513 million bpd in the week ending November 29, as per EIA data. However, U.S. crude oil imports from Mexico fell to a record low of 151,000 bpd, marking the lowest since June 2010. U.S. crude inventories declined significantly by 5.073 million barrels, the largest draw in five months, surpassing market expectations of a 1-million-barrel draw. Conversely, gasoline and distillate stockpiles increased by 2.362 million and 3.383 million barrels, respectively, exceeding consensus estimates. The EIA revised its global oil demand growth forecast for 2024 down by 300,000 bpd to 1.2 million bpd, with total demand expected at 104.3 million bpd. Similarly, U.S. oil demand projections were slightly lowered to 20.5 million bpd for 2024. Technical Overview: The crude oil market saw short covering, with open interest falling by 8.86% to 7,591 contracts. Prices are currently supported at Rs.5,781, with a potential further decline to Rs.5,716 if breached. On the upside, resistance is expected at Rs.5,889, with a move above this level potentially pushing prices towards Rs.5,932.

Trading Ideas:

* Crudeoil trading range for the day is 5716-5932.

* Crude oil gains amid hopes demand from China will increase thanks to the recent stimulus announcement

* China's crude oil imports jumped in November from a year earlier for the first annual growth in seven months.

* US crude oil output hit record last week, EIA data shows

Natural gas

Natural gas prices fell by 1.4% to Rs.267.7, driven by higher production, milder weather forecasts, and lower heating demand expectations. Output in the Lower 48 U.S. states rose to 102.7 billion cubic feet per day (bcfd) in December, up from 101.5 bcfd in November, though still below the record 105.3 bcfd in December 2023. Warmer-than-normal temperatures are projected across the region through December 25, prompting a forecasted drop in average gas demand, including exports, from 128.6 bcfd this week to 121.3 bcfd next week. LNG exports showed mixed trends, with December averages increasing to 14.0 bcfd compared to 13.6 bcfd in November. However, daily LNG feedgas volumes fell to a one-month low of 13.2 bcfd, mainly due to reduced flows to Cheniere Energy's Sabine Pass plant. U.S. gas storage levels also remain robust, ending the injection season at 3,922 billion cubic feet, the highest since 2016. Despite a recent withdrawal of 30 billion cubic feet, storage volumes are 4.9% higher than last year and 7.8% above the five-year average, reflecting strong inventory levels despite seasonal draws. The market experienced fresh selling as open interest increased by 8.82% to 16,476 contracts while prices declined by Rs.3.8. Current support is seen at Rs.262.3, with a breach possibly leading to Rs.257. Resistance is pegged at Rs.271.7, and prices could test Rs.275.8 if breached.

Trading Ideas:

* Naturalgas trading range for the day is 257-275.8.

* Natural gas slid on rising output, forecasts for milder weather and lower heating demand.

* Pressure also seen amid a decline in the amount of gas flowing to LNG export plants to a one-month low.

* Average gas output in the Lower 48 U.S. states rose to 102.7 bcfd so far in December, up from 101.5 bcfd in November.

Copper

Copper prices edged lower by 0.05% to Rs.830.65 as a stronger U.S. dollar pressured the market. Investors anticipate U.S. inflation data for hints on the Federal Reserve's next steps. Meanwhile, China's copper imports surged in November to a one-year high of 528,000 tons, up 4.3% from October, driven by shipments from Africa and restocking activity amid declining domestic inventories. This rise came as deliverable copper stocks on the Shanghai Futures Exchange hit a nine-month low of 108,775 tons, down 29% from November 1 levels. The market eyes China's Central Economic Work Conference, where critical economic targets and policies for 2025 will be announced. Optimism persists following the Politburo’s indication of monetary policy easing. However, concerns remain over supply availability, as reflected in reduced copper concentrate processing fees agreed upon by Chilean miner Antofagasta and Jiangxi Copper for 2025. Meanwhile, Rio Tinto forecasts increased copper production, driven by a 50% surge in output from its Mongolian assets. The International Copper Study Group (ICSG) reported a global refined copper deficit of 131,000 metric tons in September, reversing from a 43,000-ton surplus in August. Refined output stood at 2.22 million metric tons, while consumption reached 2.35 million metric tons. The market experienced long liquidation as open interest fell by 5.07% to 5,620 contracts. Support is now seen at Rs.826, with further downside to Rs.821.2 if breached. Resistance is expected at ?833.6, with a move above potentially testing Rs.836.4.

Trading Ideas:

* Copper trading range for the day is 821.2-836.4.

* Copper prices edged lower as the U.S. dollar strengthened

* China's copper imports rose in November to a one-year high, customs data showed

* Traders looked for further signals from China on stimulus measures this week.

Zinc

Zinc prices gained 0.36% to Rs.292.75 as the market anticipated further clarity on China's economic policies during the Central Economic Work Conference. China's announcement of potential economic measures to bolster growth added support, although concerns persist over the construction sector's outlook. Recent trade data revealed weaker-than-expected exports and a contraction in imports, underlining the need for additional stimulus measures. Smelter production has shown signs of recovery, with December 2024 production expected to increase over 20,000 metric tons month-on-month (MoM), reflecting a 5% rise. Despite this uptick, cumulative domestic refined zinc production for 2024 is projected to decline by over 6% year-on-year (YoY). Key regions such as Inner Mongolia, Hunan, and Gansu are driving production gains, overcoming minor reductions in areas like Hunan and Sichuan due to maintenance. The trend of higher production is expected to persist into January 2025, aided by eased raw material shortages. Globally, the zinc market deficit narrowed to 79,500 metric tons in September from 85,000 metric tons in August, according to ILZSG data. For the first nine months of 2024, the deficit stands at 8,000 metric tons, a stark contrast to the 358,000 metric ton surplus recorded in the same period last year. Zinc witnessed fresh buying as open interest rose by 2.64% to 3,768 contracts. Immediate support lies at Rs.290.5, with further downside possible to Rs.288.3 if breached. Resistance is expected at Rs.293.9, with a breakout likely testing Rs.295.1.

Trading Ideas:

* Zinc trading range for the day is 288.3-295.1.

* Zinc gains as the market awaits more clues on China's 2025 key targets.

* China said it would take more action to boost its economy.

* In December 2024, domestic refined zinc production will increase by over 20,000 mt MoM or about 5% MoM

Aluminium

Aluminium prices increased by 0.72% to Rs.245.45, bolstered by China's pledge for more robust economic support and a shift toward a "moderately loose" monetary policy in 2025. The Politburo’s commitment to proactive fiscal policies, support for equity markets, and property prices heightened optimism for extended GDP growth targets, strengthening investor sentiment. This, combined with improved export expectations, provided strong backing for aluminium demand despite global uncertainties such as potential U.S. tariff threats. Domestically, aluminium production rose 2.74% year-on-year (YoY) in November, with cumulative output from January to November increasing by 3.86% YoY. Temporary smelter shutdowns due to high pot age, environmental controls, and maintenance constrained output, though ramp-ups of new capacities in December are expected to boost operating capacities. Notably, a Guangxi smelter maintenance could impact 100,000 metric tons of annual capacity, while smaller disruptions are anticipated in Sichuan and Chongqing. On the trade front, China exported 5.5 million tons of unwrought aluminium and related products during the first ten months of 2024, marking a 17% YoY increase. October alone saw exports surge by 31% YoY to 577,000 tons. Aluminium witnessed short covering, with open interest dropping by 9.23% to 3,129 contracts. Immediate support lies at Rs.243.6, with further downside at Rs.241.6. Resistance is seen at Rs.246.6, with a breakout likely testing Rs.247.6. 

Trading Ideas:

* Aluminium trading range for the day is 241.6-247.6.

* Aluminium gains as large pledges of economic support from the Chinese government raised bets that the economy may recover.

* The Politburo announced it will shift to a “moderately loose” monetary policy stance next year from the “prudential” stance.

* China’s aluminum production increased by 2.74% YoY

Cotton Candy

Cotton Candy prices fell by 1.03% to Rs.54,710, weighed down by weaker export sales reported by the USDA. Weekly upland cotton export sales for 2024/25 dropped 47% from the previous week, pressuring prices. Additionally, India's cotton production for 2024/25 is forecasted to decline by 7.4% to 30.2 million bales, attributed to reduced acreage and damage from excessive rainfall and pest issues. The USDA further lowered India's ending stock estimates to 12.38 million bales, indicating tighter domestic availability. Global cotton production estimates, however, increased slightly due to higher outputs from China, Brazil, and Argentina, offsetting reductions in the U.S. and Spain. Despite this, India’s cotton imports are expected to rise to 2.5 million bales from 1.75 million a year ago, while exports are projected to fall to 1.8 million bales, reflecting lower domestic production and tighter global supplies. The reduction in cotton-planted area, particularly in Gujarat, where farmers shifted to groundnuts for better returns, is a key factor driving lower output. In the U.S., the cotton balance sheet shows reduced production, mill use, and exports for 2024/25. Production estimates were trimmed by 300,000 bales to 14.2 million due to Hurricane Helene, while exports are reduced to 11.5 million bales. Global trade is expected to decrease by 500,000 bales, mainly due to reduced imports by China. The market saw fresh selling, with open interest rising by 7.07% to 318 contracts. Prices have immediate support at Rs.54,420, with further downside potential to Rs.54,130. Resistance is pegged at Rs.55,190, with upward movement likely testing Rs.55,670.

Trading Ideas:

* Cottoncandy trading range for the day is 54130-55670.

* Cotton dropped as USDA’ weekly export sales were down 47% from the previous week.

* India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago

* Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA

* In Rajkot, a major spot market, the price ended at 25730.85 Rupees dropped by -0.17 percent.

Turmeric

Turmeric futures rose by 0.95%, closing at Rs.14,038, supported by robust buying and limited supplies ahead of the new crop arrival. Despite this upward trend, gains were capped as reports indicated the turmeric crop is in excellent condition with favorable weather. Daily arrivals increased to 9,030 bags compared to 7,965 bags in the prior session, with key trading centers like Hingoli and Erode witnessing strong activity, although Hingoli remained intermittently closed due to elections. India's turmeric acreage has risen significantly, with a 30-35% increase in key states like Maharashtra, Telangana, and Andhra Pradesh compared to last year. The total sowing area is estimated to rise from 3.25 lakh hectares last year to 3.75-4 lakh hectares this year. Prolonged rains have delayed harvesting, which could temporarily support prices. Meanwhile, in Indonesia, harvesting is at its peak due to dry weather, which may add to global supply pressures. Export data showed a marginal 0.96% increase in turmeric exports during April-September 2024, with 92,911 tonnes exported, compared to 92,025 tonnes in the same period last year. However, September exports dropped by 4.06% month-on-month. Imports surged 184.73% year-on-year during April-September 2024, reaching 15,742 tonnes, reflecting increasing domestic demand. Turmeric futures experienced fresh buying, with open interest rising by 7.87% to 8,020. Prices are supported at Rs.13,866, with further downside testing at Rs.13,696. Resistance is pegged at Rs.14,152, with a move above likely pushing prices to Rs.14,268.

Trading Ideas:

* Turmeric trading range for the day is 13696-14268.

* Turmeric gains on strong buying activity amid reports of low supplies till the arrival of new crop.

* However upside seen limited as turmeric crop is reported to be in good to excellent condition.

* Although crop acreage has improved, delay in harvesting due to prolonged rains may impact the timelines of fresh supplies.

* In Nizamabad, a major spot market, the price ended at 13791.85 Rupees gained by 0.16 percent.

Jeera

Jeera futures rose by 0.41% to Rs.24,230, driven by delays in sowing due to weather disruptions in Gujarat and Rajasthan. Higher temperatures in recent weeks have impacted seeding and germination. In Gujarat, sowing reached only 57,915 hectares by November 25, compared to 2.44 lakh hectares in the same period last year. This accounts for just 15% of the normal cropping area of 3.81 lakh hectares in the state. The delay in sowing is estimated at 20-25 days. India’s cumin production for 2023-24 increased to 8.6 lakh tonnes from an area of 11.87 lakh hectares, up from 5.77 lakh tonnes in the previous year. However, production is expected to drop by 10% in the 2024-25 season, with Rajasthan’s acreage estimated to decline by 10-15%. Indian cumin remains the cheapest globally at $3,050 per tonne, making it a preferred choice for countries like China, further boosting exports. Tensions in the Middle East have also supported export demand, particularly from Europe and other regions during the festive season. Jeera exports surged by 70.02% to 119,249 tonnes during April-September 2024 compared to 70,139 tonnes in the same period last year. September exports rose by 24.64% month-on-month and 162.34% year-on-year. Jeera futures saw fresh buying with a 2.86% rise in open interest to 2,376. Support is at Rs.24,060, with further downside testing at Rs.23,880. Resistance is pegged at Rs.24,380, with a breakout likely to test Rs.24,520.

Trading Ideas:

* Jeera trading range for the day is 23880-24520.

* Jeera prices gained as sowing has been delayed.

* Higher day temperatures in the past few weeks has impacted the seeding of jeera and has also led to poor germination in various places.

* In Gujarat, jeera sowing has taken place in only 57,915 hectares till November 25 during the rabi 2024-25 cropping season.

* In Unjha, a major spot market, the price ended at 24580.25 Rupees dropped by -0.24 percent.

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