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Gold

Gold prices declined marginally by 0.1% to settle at 77,061 as investors exercised caution ahead of the U.S. Federal Reserve’s upcoming policy meeting. The Fed is widely expected to announce a third rate cut for the year and provide guidance on rate expectations for 2025 and beyond. Markets have priced in an 18% chance of an additional rate cut in January, according to the CME FedWatch tool. Investor sentiment remains mixed as central bank policy clarity is awaited, with analysts predicting gold demand will remain robust until interest rates normalize. In India, domestic gold demand showed signs of weakness, with discounts widening to $9 per ounce amid a rebound in local prices during the ongoing wedding season. Similarly, Chinese markets witnessed gold discounts between $19.4-$25, reflecting subdued consumer confidence despite recent stimulus measures. Premiums in Singapore and Hong Kong remained steady at $1.50-$2.00, while Japan saw mixed activity with premiums of up to $3 and discounts as low as $4.5. On the central bank front, gold purchases surged in October, with net additions totaling 60 tons, the highest for 2024, as per World Gold Council (WGC) data. India led purchases, adding 27 tons in October and 77 tons year-to-date, marking a five-fold increase from 2023 levels. Gold saw fresh selling pressure, evidenced by a 1.03% rise in open interest to 13,194 contracts, while prices fell by 75 rupees. Immediate support is at 76,840, with a break below testing 76,625. On the upside, resistance lies at 77,335, with a move above potentially pushing prices toward 77,615.

Trading Ideas:

* Gold trading range for the day is 76625-77615.

* Gold remained in range as investor caution set in ahead of the U.S. Federal Reserve's policy meeting.

* Investors see Fed lowering rates by 25 bps later in the week

* Gold demand should remain strong until the U.S. and global growth puts in a floor, with buying as a hedge against equity downside.

Silver

Silver prices rose by 0.2% to settle at Rs.91,183 as investors braced for a crucial week filled with central bank meetings and key economic data. The U.S. Federal Reserve is widely expected to announce a 25-basis point rate cut during its two-day meeting, with markets pricing in a 97.1% probability, according to the CME FedWatch Tool. However, traders are also watching for signals on future rate moves, as expectations lean toward a pause in January. Economic data revealed U.S. jobless claims rose to 242K, above the anticipated 220K, while producer prices presented a mixed picture with the headline PPI accelerating by 0.4% but core PPI easing to 0.2%.The Silver Institute reported that the global silver deficit will shrink by 4% to 182 million ounces in 2024, driven by record industrial demand and a recovery in jewellery consumption. Total silver demand is forecasted to rise to 1.21 billion ounces in 2024 despite a notable 16% drop in physical investment. Mine supply, primarily from Mexico, Chile, and the U.S., is projected to grow by 1%, while recycling will increase by 5%.India, the largest silver consumer, has seen imports nearly double in 2024, with trade ministry data showing a significant rise to 4,554 tons in H1 2024 from 560 tons in the previous year. Silver witnessed fresh buying interest, evidenced by a 0.63% gain in open interest to 27,822 contracts, while prices rose by Rs.182. Immediate support is at Rs.90,770, with a break below targeting Rs.90,350. Resistance stands at Rs.91,590, and a move above could push prices toward ?91,990.

Trading Ideas:

* Silver trading range for the day is 90350-91990.

* Silver edged higher as investors braced for a busy week of central bank meetings and economic data releases.

* US Jobless Claims increased by 242K against expectations of a slight decline to 220K from the previous week’s 225K.

* US Producer prices were mixed, with the headline PPI accelerating at a 0.4% pace, twice as much as the 0.2% expected, from 0.3% in October.

Crude oil

Crude oil prices settled down by 0.33% at ?6,022, pressured by weaker consumer spending and slowing retail sales in China, the world’s largest oil importer. Although China’s industrial output showed slight improvement in November, retail performance fell short, prompting concerns over economic fragility and the need for further stimulus measures. China’s subdued outlook also contributed to OPEC+ delaying its planned output hikes until April. Chinese crude imports are expected to remain elevated into 2025, driven by refiners leveraging lower prices and independent refiners rushing to utilize quotas. The International Energy Agency (IEA) raised its 2025 global oil demand forecast to 1.1 million barrels per day (bpd), citing China’s recent stimulus, although it anticipates a surplus as non-OPEC+ nations-led by Brazil, Canada, and the U.S.—increase supply by 1.5 million bpd. Meanwhile, U.S. crude inventories fell by 1.425 million barrels last week, exceeding expectations, while gasoline stocks surged by 5.086 million barrels, and distillate inventories rose by 3.235 million barrels. The U.S. Energy Information Administration (EIA) revised its global oil demand growth forecast downward for 2025 to 1.2 million bpd, citing slowing activity in China and North America. Crude oil prices faced fresh selling pressure as open interest surged by 42.92% to 12,177 contracts, while prices fell Rs.20. Immediate support is seen at Rs.5,986, with a break below targeting Rs.5,949. Resistance is at Rs.6,054, and a move above this level could push prices toward Rs.6,085.

Trading Ideas:

* Crudeoil trading range for the day is 5949-6085.

* Crude oil dropped pressured by weakness in consumer spending in China

* The Chinese outlook contributed the decision by oil producer group OPEC+ to postpone plans for higher output until April.

* China's consumer spending data falls short of expectations

Natural Gas

Natural gas prices fell by 1.86% to Rs.274 as increased supplies weighed on the market amid steady production and relatively warmer weather forecasts. U.S. natural gas output in the Lower 48 states rose to 102.9 billion cubic feet per day (bcfd) in December, up from 101.5 bcfd in November. Despite the price drop, gas flows to U.S. liquefied natural gas (LNG) export plants reached an 11-month high of 14.1 bcfd, boosted by the startup activity at Venture Global LNG’s Plaquemines plant in Louisiana. Weather projections indicated mostly warmer-than-normal conditions across the Lower 48 states through December 28, with brief colder-than-normal days expected from December 21-23. As a result, gas demand, including exports, is forecast to drop from 129.4 bcfd this week to 125.0 bcfd next week, before rebounding to 136.4 bcfd in two weeks. The U.S. entered the winter heating season with the highest natural gas storage levels since 2016, totaling 3,922 billion cubic feet-6% above the five-year average. Last week, utilities withdrew 190 billion cubic feet of natural gas, surpassing market expectations of a 170 billion cubic feet draw. Natural gas is witnessing fresh selling pressure with a 4.08% increase in open interest, settling at 15,268 contracts while prices declined by Rs.5.2. Immediate support is at Rs.268.6, with a break below targeting Rs.263.3. Resistance is seen at Rs.278, and a move above could push prices towards Rs.282.1.

Trading Ideas:

* Naturalgas trading range for the day is 263.3-282.1.

* Natural gas fell on increased supplies as producers keep pulling more gas out of the ground

* Gas flows to Venture Global Plaquemines in Louisiana high enough to produce first LNG

* Feedgas to LNG export plants on track to reach 11-month high

Copper

Copper prices settled marginally lower by 0.06% at Rs.814.25 due to persistent concerns over Chinese demand and a global supply surplus outlook. China's economic data revealed slower-than-expected retail sales growth in November, while industrial production showed improvement. However, ongoing weakness in the property sector, with new home prices declining for the 17th consecutive month, added pressure to demand sentiment. Beijing's latest policy support pledges, including fiscal stimulus and looser monetary measures, lacked specific details, failing to excite investors. On the supply front, Peru's copper production in October fell 1.4% year-on-year to 236,797 metric tons, driven by lower output from major mines such as Cerro Verde (-6.6%) and Antamina (-22.2%). Chile's copper production is projected between 5.4 and 5.6 million tons in 2025, while Codelco reported 127,900 metric tons output in October. Additionally, BNP Paribas forecasts a global refined copper surplus of 491,000 tons in 2025 and downgraded its average copper price estimate by 5% to $9,020. In contrast, China's copper imports in November hit a one-year high of 528,000 tons, up 4.3% from October, as lower prices spurred restocking amid declining domestic inventories. Copper is witnessing fresh selling with a 3.16% rise in open interest to 5,743 contracts. Immediate support is at Rs.810.7, with a break below likely to test Rs.807.2. Resistance is seen at Rs.818.1, and a move above could push prices to Rs.822.

Trading Ideas:

* Copper trading range for the day is 807.2-822.

* Copper prices settled flat amid persistent demand concerns in China.

* Data showed that retail sales in China slowed more than expected in November.

* Peru's copper production in October fell 1.4% compared to the same month last year

Zinc

Zinc prices fell by 0.76% to Rs.285.4 amid mixed signals from China's economic recovery and an expected increase in smelter production. While China's industrial output in November showed improvement, disappointing retail sales and shrinking imports highlighted the economy's fragility. Beijing pledged to ramp up fiscal stimulus and loosen monetary policies to stabilize growth as the country prepares for potential U.S. trade tensions under a second Trump administration. On the supply side, zinc smelter production in China is on the rise. In November, refined zinc production increased slightly by 0.3% MoM but saw a sharp 12% YoY decline, bringing cumulative production for January-November to over 5.6 million metric tons, down nearly 6% YoY. However, December production is expected to increase by 5% MoM or over 20,000 metric tons, driven by recovery in key regions like Inner Mongolia, Xinjiang, Qinghai, and Hunan. January 2025 production is also projected to remain high. Global zinc market fundamentals showed a narrowing deficit, with the September deficit at 79,500 tons compared to 85,000 tons in August. For January-September 2024, a modest 8,000-ton deficit was reported, contrasting sharply with the 358,000-ton surplus during the same period last year. Zinc witnessed long liquidation as open interest dropped by 4.7% to 2,390 contracts. Immediate support is at Rs.284.2, with further downside likely to test Rs.282.9. Resistance is seen at Rs.287.3, and a move above this level could push prices to Rs.289.1.

Trading Ideas:

* Zinc trading range for the day is 282.9-289.1.

* Zinc edged down after China's economic data showed a mixed recovery among different sectors.

* China's industrial output quickened slightly in November, while retail sales disappointed

* Zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell 4.4% from last Friday

Aluminium

Aluminium prices settled down by -0.53% at Rs.243.35 as rising output in China and concerns over tightening supply in Asia weigh on the market. In November, Chinese aluminium production increased by 3.6% YoY, reaching 3.71 million metric tons, driven by higher daily output and demand from traders and producers rushing to ship before changes in export tax rebate policies. Additionally, capacity expansions and resumption of idle capacities have further pressured the market. China’s aluminium production for January to November 2024 rose by 4.6% YoY, with cumulative output reaching 40.22 million metric tons. However, despite the increase in production, smelters are facing challenges such as high alumina costs and environmental control measures requiring production cuts, especially during the winter months. Some regions like Guangxi and Sichuan are also undergoing maintenance, which will temporarily affect capacity. China’s aluminium exports for the first ten months of 2024 reached nearly 5.5 million tons, growing by 17% compared to the same period last year. In October alone, exports totaled 577,000 tons, up 31% YoY, highlighting strong global demand, despite internal supply pressures. On the technical front, the market saw long liquidation with a -11.37% drop in open interest, settling at 2408 contracts. Aluminium is currently supported at Rs.242.7, with further downside potential at Rs.241.9. Resistance is seen at Rs.244.3, with a possible test of Rs.245.1 if bullish momentum resumes.

Trading Ideas:

* Aluminium trading range for the day is 241.9-245.1.

* Aluminium prices fell amid rising output in China.

* Beijing braces for more U.S. trade tariffs under a second Donald Trump administration.

* China’s industrial output grew ahead of expectations.

Cottoncandy

Cotton prices settled down by -0.16% at Rs.54,670, driven by rising global cotton production projections and concerns over lower Indian output. Global cotton production for the cotton year (CY) 2024-25 is projected to increase by over 1.2 million bales to reach 117.4 million bales, primarily supported by higher production in India and Argentina. Meanwhile, India's cotton production for the upcoming season is expected to fall by 7.4% to 30.2 million bales due to reduced planted area and damage caused by excessive rainfall. This decline in production has led to reduced exports, with India projected to import 2.5 million bales in the new year, up from 1.75 million bales a year ago. The Cotton Association of India (CAI) reported a sharp reduction in India's cotton area to 11.29 million hectares from 12.69 million hectares in the previous year, with farmers shifting focus to crops like groundnuts offering better returns. In addition to the concerns in India, U.S. cotton production estimates for 2024/25 have been revised upward to nearly 14.3 million bales, contributing to higher global supplies. The world cotton balance sheet for 2024/25 reflects increased production, consumption, and ending stocks. Despite a slight increase in global supply, India's declining production will likely tighten local markets, reducing exports while increasing imports to meet domestic demand. Technically, the market is witnessing fresh selling as open interest has risen by 3.01% with prices down by -90 rupees. Cottoncandy is currently supported at Rs.54,550, with a potential test of Rs.54,440. Resistance is seen at Rs.54,820, with a move above expected to test Rs.54,980.

Trading Ideas:

* Cottoncandy trading range for the day is 54440-54980.

* Cotton dropped as Global cotton production is projected to rise by more than 1.2 million bales to 117.4 million bales

* 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 25518.2 Rupees dropped by -0.29 percent.

Turmeric

Turmeric prices inched higher by 0.13% to settle at Rs.13,990, supported by strong buying interest and reports of low supplies ahead of the new crop arrivals. Despite the upward movement, gains were capped due to favorable crop conditions. Arrivals rose to 9,030 bags compared to 7,965 bags in the prior session, with robust inflows recorded in key trading centers like Hingoli and Erode, although the Hingoli market remained closed. Limited stocks in the market are likely to keep prices firm until fresh supplies begin. However, delayed harvesting caused by prolonged vegetation growth may impact the timeline of new arrivals. On the production side, turmeric sowing has increased significantly this year, with acreage in regions like Erode doubling compared to last year. States like Maharashtra, Telangana, and Andhra Pradesh have reported a 30-35% rise in sowing, pushing the estimated national turmeric acreage to 3.75-4 lakh hectares, up from 3-3.25 lakh hectares last year. Export trends reveal a modest rise of 0.96% in Apr-Sep 2024 exports, totaling 92,911.46 tonnes, with a notable 68.69% year-on-year surge in September exports. Meanwhile, imports have surged by 184.73% during the same period, reaching 15,742.12 tonnes, as rising demand drives imports despite strong domestic output. The market is under fresh buying, with open interest rising by 5.11% to 9,870 contracts. Prices closed higher by Rs.18, reflecting positive sentiment. Turmeric has support at Rs.13,890, with a potential test of Rs.13,792 if bearish momentum prevails. Resistance is pegged at Rs.14,068, and a breakout above could lead to testing Rs.14,148.

Trading Ideas:

* Turmeric trading range for the day is 13792-14148.

* 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.

* In Indonesia, dry weather has accelerated harvesting, which is currently at peak levels.

* In Nizamabad, a major spot market, the price ended at 13771.4 Rupees gained by 0.35 percent.

Jeera

Jeera prices declined by 0.58% to settle at Rs.23,900 due to profit booking after recent gains. Prices had rallied earlier as sowing activities in Gujarat and Rajasthan, key producing states, have been delayed by 20-25 days due to higher temperatures. In Gujarat, jeera sowing has been completed on only 57,915 hectares as of November 25, a stark contrast to last year’s 2.44 lakh hectares during the same period. The state’s total normal cropping area of 3.81 lakh hectares remains largely uncovered, raising concerns over production. Despite these challenges, India’s cumin production reached 8.6 lakh tonnes in 2023-24, compared to 5.77 lakh tonnes in the prior year. However, production for the current season is estimated to decline by 10% nationally, with Rajasthan’s cultivation expected to drop by 10-15%. On the global front, Indian cumin remains the cheapest, with prices at $3,050 per tonne, $200-250 lower than Chinese cumin. This competitive pricing has spurred strong export demand, particularly from China and Europe. Exports during Apr-Sep 2024 surged by 70.02% to 119,249.51 tonnes, while September exports alone rose by 162.34% year-on-year to 15,635.04 tonnes. The market is witnessing long liquidation, with open interest falling by 0.12% to 2,415 contracts. Jeera prices dropped Rs.140, reflecting corrective pressure. Support is at Rs.23,600, with a breach likely to test Rs.23,310. Resistance is seen at Rs.24,180, and a breakout above could push prices to Rs.24,470.

Trading Ideas:

* Jeera trading range for the day is 23310-24470.

* Jeera dropped on profit booking after 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 24377.45 Rupees dropped by -0.42 percent.

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