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Gold

Gold prices exhibited a marginal decline of -0.13% yesterday, settling at 69707, as market sentiment remained cautious ahead of the release of the key US jobs report, which could provide insights into the Federal Reserve's monetary policy trajectory. While several Fed policymakers indicated the likelihood of interest rate cuts this year, they emphasized the need for further evidence of inflation moderation. The probability of a Fed interest rate reduction in June currently stands at approximately 60%, reflecting market expectations of potential monetary easing. However, the latest employment data painted a mixed picture, with initial claims for state unemployment benefits rising to 221,000, exceeding economists' forecasts of 212,000. Federal Reserve Chair Jerome Powell reiterated the central bank's cautious stance, emphasizing that recent job gains and inflation readings have not significantly altered the overall monetary strategy. Powell indicated that a lower policy interest rate could be appropriate "at some point this year," contingent upon the economy evolving as expected. In contrast, Atlanta Fed President Raphael Bostic diverged, advocating for no rate cuts until the end of the year, maintaining a conservative outlook on monetary policy adjustments. From a technical perspective, the gold market witnessed long liquidation, with a drop in open interest by -1.65%, settling at 24123, alongside a decline in prices by -92 rupees. Support for gold is identified at 69480, with a potential test of 69255 levels below this threshold. Conversely, resistance is anticipated at 69920, with a breakout above possibly leading to a test of 70135. Amidst cautious market sentiment and divergent views on monetary policy, gold prices may experience continued volatility, driven by incoming economic data and central bank communications.

Trading Ideas:

* Gold trading range for the day is 69255-70135.
* Gold dropped as caution dominated markets ahead of the key US jobs report
* Several Fed policymakers stated that interest rate cuts were likely to occur this year
* US Weekly jobless claims have risen to their highest level since early February.

Silver

Silver prices surged by 1.23% yesterday, closing at 79,984 fueled by escalating geopolitical tensions in the Middle East and Ukraine, which bolstered safe-haven demand for the precious metal. Concurrently, concerns about the health of the U.S. economy emerged as the service sector displayed signs of losing momentum, as indicated by the Institute for Supply Management's Services Purchasing Managers Index dropping to 51.4%, below expectations. Amidst this economic backdrop, statements from Federal Reserve officials added to market uncertainty. Federal Reserve Bank of San Francisco President Mary Daly suggested that three interest rate cuts this year could be reasonable, contingent upon inflation and labor market conditions. Similarly, Federal Reserve Bank of Cleveland President Loretta Mester hinted at potential rate cuts, pending confirmation from economic data. On a bullish note, the Silver Institute anticipates a prosperous year for the white metal, projecting prices to potentially reach 10-year highs in 2024. This optimism stems from the expectation of robust global demand, forecasted to hit 1.2 billion ounces, the second-highest on record. From a technical standpoint, the market witnessed fresh buying momentum, with a 0.92% increase in open interest, settling at 29,004. Despite a significant price increase of 973 rupees, silver finds support at 79,350, with a potential test of 78,725 levels below that. Resistance is expected at 80,350, and a move above could lead to prices testing 80,725. Traders should closely monitor these levels for potential market movements and adjust their strategies accordingly, considering both geopolitical tensions and economic data's influence on silver prices.

Trading Ideas:

* Silver trading range for the day is 78725-80725.
* Silver gains fueled by geopolitical tensions in the Middle East and Ukraine intensified.
* The health of the U.S. economy is becoming increasingly muddled as the service sector continues to lose momentum.
* Fed’s Daly said she believes three interest-rate cuts this year is a "reasonable" expectation

Crude oil

Crude oil experienced a modest decline of -0.54% yesterday, settling at 7123, following the release of the U.S. Energy Information Administration's report, which indicated a notable increase of 3.2 million barrels in U.S. crude stocks for the week ending March 29. Despite this build-up, the OPEC+ ministerial committee chose to maintain existing output targets, citing overall satisfaction with the current state of the global crude oil market. However, concerns were raised regarding some member countries' overproduction, prompting commitments to enhance compliance with output cuts. As a result, voluntary production cuts of 2.2 million barrels per day will persist until at least the end of June, complementing the existing 3.66 million bpd of cuts agreed upon in 2022. Furthermore, U.S. oil production faced a setback in January due to severe weather conditions, leading to a substantial decline of almost 24 million barrels or 0.8 million b/d compared to December 2023. Investors also grappled with geopolitical tensions, particularly stemming from Ukrainian attacks on Russian refineries and the potential for further escalation in Middle East conflicts, adding to supply-side uncertainties. From a technical standpoint, the crude oil market observed long liquidation, with a significant drop in open interest by -26.33%, settling at 7951, alongside a decline in prices by -39 rupees. Support for crude oil is identified at 7068, with a potential test of 7013 levels below this threshold. Conversely, resistance is anticipated at 7170, with a breakout above possibly leading to a test of 7217.

Trading Ideas:

* Crudeoil trading range for the day is 7013-7217.
* Crude oil dropped after the U.S. crude stocks increased by 3.2 million barrels.
* OPEC+ ministers opted to keep output policy unchanged.
* U.S. oil production dropped sharply at the start of the year

Natural gas

Natural gas experienced a significant decline of -3.73% yesterday, settling at 149.5, driven by forecasts for milder weather over the next two weeks and smaller-than-expected output declines, alongside abundant gas storage. Despite a federal report indicating a larger-than-usual storage withdrawal last week due to cooler weather, bullish forecasts for increased demand from liquefied natural gas (LNG) export plants failed to support prices. US utilities withdrew 37 billion cubic feet (bcf) of gas from storage last week, slightly below market expectations of 38 bcf. However, despite this drawdown, stockpiles remain ample at 2.259 trillion cubic feet (tcf), significantly higher than last year and above the five-year average. Additionally, gas output in the Lower 48 US states decreased in April to 98.9 bcfd from March's 100.8 bcfd, though still below the record high set in December 2023. From a technical standpoint, the market is witnessing fresh selling pressure, with a notable 10.52% increase in open interest, settling at 57,278. Despite the price decline of -5.8 rupees, natural gas finds support at 145.8, with a potential test of 142 levels below that. Resistance is anticipated at 154.5, and a move above could lead to prices testing 159.4. Traders should closely monitor these levels for potential market movements, considering the impact of weather forecasts, production trends, and storage levels on natural gas prices.

Trading Ideas:

* Naturalgas trading range for the day is 142-159.4.
* Natural gas slid on forecasts for milder weather over the next two weeks than previously expected
* Pressure also seen amid smaller output decline so far this month and ample amounts of gas in storage.
* US utilities pulled 37 billion cubic feet (bcf) of gas from storage during the week ended March 29, 2024.

Copper

Copper displayed notable strength yesterday, with a significant uptick of 1.58%, settling at 803.15, driven by multiple factors contributing to a bullish sentiment in the market. Fresh weakness in the US dollar and increasing supply risks served as primary catalysts for the upward movement in copper prices. Moderating services activity in the US, coupled with a sharp slowdown in sector prices, fueled expectations of lower interest rates by the Federal Reserve, enhancing financial conditions for manufacturers globally. Lower interest rates in the US exerted downward pressure on the dollar, consequently boosting the purchasing power for key importers of copper, thereby triggering a surge in bids. Additionally, improved manufacturing data from top consumer China, as indicated by official and Caixin PMIs, countered concerns of weakening demand in the country. However, disruptions in major mines, including logistical issues in Congo and droughts in Zambia, constrained supply, prompting Chinese smelters to consider a joint reduction in output to bolster margins. The Yanghsan copper premium experienced a sharp decline by the end of the month, reflecting diminished demand for physical copper from factories. From a technical standpoint, the copper market witnessed short covering, with a drop in open interest by -3.5% to settle at 4574, alongside a price increase of 12.5 rupees. Support for copper is identified at 796.8, with a potential test of 790.4 levels below this threshold. Conversely, resistance is anticipated at 807, with a breakout above potentially leading to a test of 810.8.

Trading Ideas:

* Copper trading range for the day is 790.4-810.8.
* Copper surged lifted by fresh weakness for the US dollar and increasing supply risks.
* Disruptions in major mines weighed on supply, with logistical issues in Congo and droughts in Zambia hampering activity.
* The global refined copper market showed an 84,000 metric tons surplus in January

Zinc

Zinc witnessed a robust surge of 3.91% yesterday, settling at 233.65, buoyed by strong factory data from China which ignited buying interest in the market. Manufacturing activity in China expanded for the first time in six months in March, with new export orders showing growth after 11 consecutive months of contraction. Moreover, anticipation of a potential interest rate cut by the European Central Bank, coupled with escalating tensions between Russia and Ukraine, further lifted sentiment in the commodity market. Fundamentally, while expectations for increased production in May exist, the drought situation in Yunnan province poses uncertainty. Nonetheless, the traditional peak season coupled with continuous policy efforts to drive demand have boosted operating rates across various processing sectors. In terms of production data, China's aluminium output in February increased by 7.81% year-on-year to 3.333 million metric tons. Despite some closures or reduced production in downstream aluminum processing companies due to Chinese New Year holidays, domestic aluminium smelters maintained steady operations. Additionally, a notable development in the market is the agreement between a Japanese aluminium buyer and a global producer, with the buyer agreeing to pay a premium of $145 per metric ton over the benchmark price for shipments in April to June, marking a significant 61% increase from the current quarter. Technically, the market is experiencing fresh buying momentum, with a 2.23% increase in open interest, settling at 3,349. Despite an increase in prices by 8.8 rupees, zinc finds support at 227.8, with potential testing of 221.7 levels below that. Resistance is expected at 237.2, and a move above could lead to prices testing 240.5.

Trading Ideas:

* Zinc trading range for the day is 221.7-240.5.
* Zinc gains as strong factory data from China triggered buying.
* Support also seen amid concerns over slow recovery in production in China's Yunnan province.
* China’s manufacturing activity expanded for the first time in six months in March

Aluminium

Aluminium demonstrated robust performance yesterday, surging by 1.87% to settle at 222.85, buoyed by elevated premiums in Japan and stronger-than-expected economic indicators from China, countering concerns of weakening demand from the world's largest consumer. Furthermore, positive developments in U.S. manufacturing, with expansion witnessed for the first time in 1-1/2 years, fueled optimism surrounding demand prospects. Macro factors, including growing expectations of an interest rate cut by the European Central Bank and escalating tensions between Russia and Ukraine, lent additional support to the commodity market sentiment. Despite expectations for increased production in May, uncertainties stemming from drought conditions in Yunnan province present potential challenges. However, the onset of the traditional peak season and ongoing policy efforts to stimulate demand have bolstered operating rates across various processing sectors. China's aluminium output in February recorded a notable increase of 7.81% year-on-year, indicating steady operations among domestic smelters, albeit with some disruptions such as a power outage affecting output in March. Premiums paid by Japanese buyers surged by 61% for shipments in April to June, highlighting strengthening demand dynamics and tightening supply conditions in the global aluminium market. From a technical perspective, aluminium witnessed short covering, with a drop in open interest by -1.29% to settle at 3660, alongside a price increase of 4.1 rupees. Support for aluminium is identified at 219.7, with a potential test of 216.4 levels below this threshold. Conversely, resistance is anticipated at 225, with a breakout potentially leading to a test of 227.

Trading Ideas:

* Aluminium trading range for the day is 216.4-227.
* Aluminium gains as higher premiums Japanese buyers having to pay boosted sentiment.
* Support also seen amid stronger-than-expected economic data from China
* U.S. manufacturing expanded for the first time in 1-1/2 years in March.

Cotton

Cottoncandy experienced a decline of -0.58% yesterday, settling at 61,860, influenced by factors such as projections from the International Cotton Advisory Committee (ICAC) indicating increases in cotton-producing area, production, consumption, and trade for the next season, 2024-25. The ICAC forecasts a 3% rise in cotton-producing area, reaching 32.85 million hectares, with production anticipated to increase by just over 2.5% to 25.22 million tonnes. Consumption is also expected to rise by 2.9% to 25.37 million tonnes, while global cotton trade is forecasted to grow by nearly 4% to 9.94 million tonnes. Meanwhile, the Cotton Association of India (CAI) revised upwards its cotton production estimates for the current season, 2023-24, to 309.70 lakh bales, from the previous estimate of 294.1 lakh bales. Similarly, the Cotton Corporation of India (CCI) raised crop production estimates for the same season to 323.11 lakh bales, against the earlier estimate of 316.57 lakh bales. In the futures market, ICE prices dropped amidst increased supply expectations for cotton and lower demand from mills. For the marketing year 2024/25, India's cotton production is estimated at 25.4 million 480 lb. bales, with mill consumption expected to increase by 2%. Import duties on extra-long staple (ELS) cotton were rescinded, leading to a forecasted 20% increase in imports. Technically, the market witnessed fresh selling pressure, with a 0.91% increase in open interest, settling at 443, despite a significant decrease in prices by -360 rupees. Cottoncandy finds support at 61,660, with a potential test of 61,460 levels below that. Resistance is anticipated at 62,080, and a move above could lead to prices testing 62,300.

Trading Ideas:

* Cottoncandy trading range for the day is 61460-62300.
* Cotton dropped as ICAC with anticipated increases in production for 2024-25.
* The ICAC's projections for 2024-25 suggest that the cotton-producing area may increase by 3 per cent from the 2023-24 acreage
* For 2024/25 China’s cotton imports are forecast at 2.4 million metric tons
* In Rajkot, a major spot market, the price ended at 29066.35 Rupees dropped by -0.06 percent.

Turmeric

Turmeric faced a marginal decline of -0.25% yesterday, settling at 16786, as markets braced for new arrivals expected from the Marathwada region in Maharashtra. The influx of new crop supply, including 5,400 bags at the Nanded spot market, 10,500 bags at Nizamabad, and 18,500 bags in Erode, exerted downward pressure on prices. These figures represent a significant increase compared to the previous week, contributing to market sentiment. However, the Ministry of Agriculture and Farmers' Welfare's first advance estimate revealed a reduction in turmeric production for the 2023-24 season, down to 10.74 lakh tonnes from 11.30 lakh tonnes the previous year. Despite this, demand destruction due to price surges has been observed, leading to a hand-to-mouth situation for many consumers. Notably, turmeric-growing regions such as Sangli, Basmat, and Hingoli are experiencing strong demand for quality produce on expectations of an increase in sowing area. Turmeric exports saw a slight decline during Apr-Jan 2024 compared to the previous year, with imports also decreasing during the same period. However, there was a rise in imports in January 2024 compared to both December 2023 and January 2023. From a technical standpoint, the turmeric market witnessed long liquidation, with a drop in open interest by -12.33% to settle at 8070, alongside a decrease in prices by -42 rupees. Support for turmeric is identified at 16596, with a potential test of 16404 levels below this threshold. Conversely, resistance is anticipated at 17008, with a breakout potentially leading to a test of 17228.

Trading Ideas:

* Turmeric trading range for the day is 16404-17228.
* Turmeric prices dropped as new arrivals are expected from the Marathwada region in Maharashtra.
* New crop supply has increased by over 25% in parts of Tamil Nadu, Telangana, and Andhra Pradesh
* The Ministry of Agriculture first advance estimate for turmeric production in 2023-24 is estimated at 10.74 lakh tonnes
* In Nizamabad, a major spot market, the price ended at 16395.9 Rupees gained by 0.2 percent.

Jeera

Jeera prices experienced a gain of 1.07% yesterday, settling at 24,450, primarily due to low-level buying activity after a previous drop, fueled by concerns over increasing arrivals putting pressure on the market. With daily arrivals ranging from 10,000 to 12,000 bags in Rajkot Mandi, the market faces a supply glut as arrivals surpass demand. The influx of new arrivals in Gujarat and Rajasthan has contributed to this scenario, with a significant increase in sowing areas and favorable weather conditions leading to a record production of cumin in Gujarat, estimated at 4.08 lakh tonnes. Despite the surge in production, trade analysts anticipate a substantial increase in cumin exports, with estimates reaching about 14-15 thousand tonnes in February 2024. This follows a volatile period in 2023, marked by soaring domestic prices and a decline in exports by 25.33% during Apr-Jan 2024 compared to the previous year. However, there was a notable increase in exports in January 2024, rising by 53.99% compared to January 2023. Technically, the market witnessed short covering, with a 1.7% drop in open interest, settling at 2,079, alongside a price increase of 260 rupees. Jeera finds support at 24,190, with a potential test of 23,920 levels below that. Resistance is expected at 24,790, and a move above could lead to prices testing 25,120. Traders should closely monitor these levels, considering both fundamental factors such as production levels and export trends, as well as technical indicators, to navigate potential market movements effectively.

Trading Ideas:

* Jeera trading range for the day is 23920-25120.
* Jeera gains  on low level buying after prices dropped as there is a possibility of further increase in arrivals pressure.
* There will be a huge increase in cumin exports, which will reach about 14-15 thousand tonnes in February 2024.
* New arrivals have started in Gujarat since last 20-25 days and new arrivals have started in Rajasthan also since last 15 days.
* In Unjha, a major spot market, the price ended at 24998.7 Rupees dropped by -0.16 percent.

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