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Gold

Gold prices surged by 1.41% to settle at 64462, buoyed by lackluster U.S. economic data, reinforcing expectations for the Federal Reserve's first interest rate cut of the year in June. The rally was fueled by disappointing figures in U.S. manufacturing and construction spending, along with a decrease in price pressures, as indicated by the Federal Reserve's preferred inflation gauge. London's gold price benchmark reached an all-time high of $2,083.15 per troy ounce, surpassing the previous record set in December. This ascent reflects heightened uncertainty and increased demand for safe-haven assets. Meanwhile, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, reported a more than 6% decline in holdings so far this year, signaling shifts in investor sentiment. Market expectations for a June rate cut by the Federal Reserve increased to 74%, up from around 65% the previous week, according to LSEG's interest rate probability. The demand for physical gold in India remained subdued due to a rise in domestic prices, prompting buyers to delay purchases. In China, gold premiums eased, indicating a stabilization in demand. Technically, the gold market witnessed fresh buying, with an 8.03% increase in open interest to settle at 15964. Prices rose by 899 rupees. Gold is currently supported at 63715, with potential downside to 62970, while resistance is expected at 64890, and a breakthrough could lead to testing 65320.

Trading Ideas:

* Gold trading range for the day is 62970-65320.
* Gold rose as tepid U.S. economic data, solidified Fed’s bets for rate cut in June.
* London gold price benchmark hits all – time high at morning auction, LBMA says
* Markets have raised their hopes for a June rate cut and are now pricing in a 74% chance.

Silver

Silver demonstrated a strong performance yesterday, closing with a notable gain of 1.65% at 73467. This upward movement was driven by expectations of a potential rate cut in June, particularly following data revealing a slowdown in U.S. manufacturing activity and a decline in consumer sentiment in February. The silver market also responded to global cues, including U.S. inflation aligning with estimates and progress on disinflation in Germany, France, and Spain. Federal Reserve officials, including New York Fed President John Williams, indicated the possibility of interest rate cuts later in the year, contingent on incoming data. While Williams acknowledged a potential rate cut, Atlanta Fed President Raphael Bostic emphasized that the central bank has not declared victory over inflation, advocating patience in monetary policy decisions. Boston Fed Bank President Susan Collins suggested that easing policy might become appropriate later in the year, emphasizing the challenging path to returning inflation to the 2% target. Despite an unexpected rise in first-time claims for U.S. unemployment benefits, the market maintained its positive momentum, reflecting the focus on broader economic indicators. From a technical standpoint, the market is experiencing fresh buying, with a 1.3% increase in open interest, settling at 22122. Prices surged by 1189 rupees. Silver is currently finding support at 72375, and a breach below could lead to a test of 71280. On the upside, resistance is anticipated at 74095, with a potential move above testing 74720.
 

Trading Ideas:
* Silver trading range for the day is 71280-74720.
* Silver prices rose on hopes for a Fed rate cut in June.
* Fed’s Williams indicated the possibility of interest rate cuts this year based on incoming data.
* Fed’s Daly highlighted a shift towards a more data-dependent approach.

Crude Oil

Crude oil prices experienced a decline of -1.67%, settling at 6527, driven by concerns about the outlook for energy demand following the decision by the Organization of Petroleum Exporting Countries and its allies (OPEC+) to extend output cuts until the end of the second quarter. Saudi Arabia, OPEC's top producer, committed to extending its voluntary 2-million bpd production cut until the end of June, aimed at maintaining market stability. Additionally, Russia announced an extra reduction of 471,000 bpd in oil production and exports during the second quarter of 2024, coordinating with OPEC+ countries. Money managers increased their net long U.S. crude futures and options positions in the week to February 27, according to the U.S. Commodity Futures Trading Commission (CFTC). The speculator group raised its combined futures and options position in New York and London, signaling a bullish sentiment in the market. On the supply side, U.S. shipments of crude oil via rail in December saw a notable increase of 35,000 bpd from the previous month, reaching 333,000 bpd, as reported by the U.S. Energy Information Administration. Technically, the crude oil market observed long liquidation, with a 36.02% drop in open interest to settle at 4585. Prices declined by -111 rupees. Crude oil is currently finding support at 6477, with potential downside to 6426, while resistance is expected at 6619, and a breakthrough could lead to testing 6710.

Trading Ideas:

* Crudeoil trading range for the day is 6426-6710.
* Crude oil dropped amid concerns about the outlook for energy demand
* Saudi Arabia is to extend voluntary cut of 1 mln b/d until end of 2Q
* Russia's deputy PM Novak announces additional voluntary cut of 471,000 BPD for Q2

Natural Gas
Natural gas experienced a substantial surge, closing up by 6.21% at 162.6, driven by significant production cuts by major players in the industry. EQT Corp, the largest natural gas producer, implemented a reduction of nearly 1 billion cubic feet (bcf) per day in natural gas production, starting late February and expected to last through March. This curtailment is anticipated to result in a total reduction of approximately 30 to 40 bcf of net production during the first quarter. Chesapeake Energy Corp also announced spending and production cuts, lowering its capital expenditure plan by 20% for 2024 and aiming to produce 2.7 bcfd in 2024, down from around 3.5 bcfd in 2023. The return to full power of Freeport LNG's facility is expected to boost gas flow to LNG export terminals. Meanwhile, despite U.S. utilities pulling 96 bcf of natural gas from storage during the week ending February 23, stockpiles remain relatively high at 2.374 trillion cubic feet, exceeding both last year's levels and the five-year average. From a technical perspective, the market is undergoing short covering, with a notable 13.02% drop in open interest, settling at 55934. Prices saw an increase of 9.5 rupees. Natural gas is currently finding support at 155.7, and a breach below could lead to a test of 148.7. On the upside, resistance is anticipated at 167.6, and a move above could result in testing 172.5.

Trading Ideas:

* Naturalgas trading range for the day is 148.7-172.5.
* Natural gas rose after EQT Corp cut natural gas production by nearly 1bcfd.
* EQT announced a nearly 1bcfd reduction in production until March due to persistently low natural gas prices.
* Chesapeake Energy cut its 2024 fuel production by around 30% due to recent price drops.

Copper
Copper prices eked out a modest gain of 0.05%, settling at 728.35, with support stemming from a weakened U.S. dollar and positive sentiment among traders reacting to the latest macroeconomic data from the United States. The official PMI data revealed the persistent contraction of factory activity in February for the fifth consecutive month, reflecting concerns about China's debt-laden property sector and subdued investment sentiment in a weak equity market. The subdued factory activity contributed to a substantial increase in inventories of deliverable copper in major Chinese warehouses, reaching 181,323 tonnes by the week ending February 23rd – more than double the pre-Lunar New Year levels and a notable 500% increase year-to-date. The Yangshan Copper Premium, indicative of customs clearance costs, continued its downward trend from February, reflecting challenges in the supply chain. Copper inventories in Shanghai Futures Exchange-monitored warehouses rose by 18.3% from the previous Friday, underscoring the impact of the challenging industrial environment on supply dynamics. Despite government measures to boost the real estate sector, new home prices in China continued to decline in January. The International Copper Study Group (ICSG) reported a surplus of 20,000 metric tons in the global refined copper market for December, a significant shift from the 123,000 metric tons deficit in November. Technically, the copper market experienced fresh buying, marked by a 0.75% increase in open interest to settle at 4022. Prices rose by 0.4 rupees, with support at 725.5 and potential resistance at 732.3.

Trading Ideas:

* Copper trading range for the day is 722.4-736.
* Copper gains supported by the muted greenback, after latest data from US.
* Factory activity contracted for a fifth consecutive month in February
* SHFE Copper inventories rose 18.3% from last Friday

Zinc

Zinc exhibited a positive performance, closing up by 0.98% at 216.5, driven by optimism regarding potential support measures from China, the world's largest consumer of the metal. The National People's Congress in China, scheduled from March 5th to 11th, is anticipated to unveil stimulus measures aimed at boosting the country's economic growth following recent weak economic data. The Caixin China General Manufacturing PMI for February rose to 50.9, surpassing market estimates of 50.6. This marked the fourth consecutive month of growth in factory activity, reaching the strongest pace since August 2023. In contrast, official data had indicated a continued decline in manufacturing activity. The official NBS Non-Manufacturing PMI for China also exceeded expectations, increasing to 51.4 in February, reflecting the 14th straight month of expansion in services activity and the strongest pace since September 2023. Globally, the zinc market showed a deficit of 62,600 metric tons in December 2023, according to data from the International Lead and Zinc Study Group (ILZSG). For the full year 2023, there was a surplus of 204,000 tons, a notable shift from the deficit of 73,000 tons recorded in 2022. From a technical perspective, the market is undergoing short covering, evidenced by a significant 10.48% drop in open interest, settling at 4209. Prices saw an increase of 2.1 rupees. Zinc is currently finding support at 213.9, with a potential test of 211.1 if this level is breached. On the upside, resistance is anticipated at 218.8, and a move above could lead to testing 220.9.

Trading Ideas:

* Zinc trading range for the day is 211.1-220.9.
* Zinc prices gained lifted by hopes of support measures from China.
* Caixin General Manufacturing PMI went up to 50.9 in the period, painting the mixed picture of the sector
* Global zinc market deficit expands in December – ILZSG

Aluminium
Aluminium closed with a modest gain of 0.3% at 202.05, buoyed by a significant decline in domestic social inventories of aluminium ingots, which were down by 24.6% YoY. This reduction marked the lowest level in the same period over the past six years, signaling potential tightening in supply conditions. However, Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange reported a 10.1% increase from the previous Friday, providing a mixed picture for market participants. Concerns related to China's property sector, a substantial consumer of industrial metals, persisted, reinforced by a liquidation petition filed against property developer Country Garden. The Caixin China General Manufacturing PMI for February rose to 50.9, surpassing market estimates and marking the fourth consecutive month of growth in factory activity. The NBS Composite PMI Output Index in China held steady at 50.9 in February, its highest reading since September 2023. The service sector expanded the most in five months, while manufacturing contracted for the fifth consecutive month. This divergence was attributed to the varying effects of the Spring Festival holiday on factory and service activities. From a technical perspective, the market is undergoing fresh buying, with a 1.91% increase in open interest, settling at 4704. Prices saw a marginal increase of 0.6 rupees. Aluminium is currently finding support at 201.4, and a breach below could lead to a test of 200.5. On the upside, resistance is anticipated at 202.7, with a potential move above testing 203.1.

Trading Ideas:

* Aluminium trading range for the day is 200.5-203.1.
* Aluminium gains as domestic social inventories of aluminium ingots down by 24.6% YoY.
* SHFE aluminium inventories rose 10.2% from last Friday
* China's official PMI fell to 49.1 in February from 49.2 in January

Cottoncandy
Cotton prices rose by 0.19% to settle at 61920, driven by multiple factors affecting global cotton supply. Severe cold weather in China and reduced acreage in the U.S. have led to a shortage of cotton, contributing to the upward pressure on prices. The latest World Agricultural Supply and Demand Estimates (WASDE) report showed a decline in U.S. cotton ending stocks for the 2023/24 season, with higher exports and lower mill use. The Southern India Mills’ Association (SIMA) has advised textile mills against panic buying, anticipating a potential increase in global cotton supply post-July. The USDA reported a decrease in net sales for 2023/2024, down 69% from the previous week and 83% from the prior 4-week average. The WASDE report highlighted a reduction in projected 2023/24 world cotton production, mainly due to cuts in Australia and Benin. India, with competitive pricing, is set to significantly increase cotton exports in February, reaching the highest level in two years. Contracts for the export of 400,000 bales were signed, primarily to China, Bangladesh, and Vietnam. The country's total cotton production for the 2023/24 marketing year is expected to decline by 7.7% to 29.41 million bales, the lowest since 2007/08, according to the Cotton Association of India. Technically, the cotton market witnessed short covering, with a 2.16% drop in open interest to settle at 407. Prices rose by 120 rupees, finding support at 61360, with potential downside to 60810. Resistance is anticipated at 62260, and a breakthrough could lead to testing 62610. The technical overview suggests a cautious market sentiment, with traders closely monitoring global supply dynamics and weather-related impacts on cotton production.

Trading Ideas:

* Cottoncandy trading range for the day is 60810-62610.
*  Cotton gains amid shortage due to severe cold in China and drop in US acreage.
* USDA reported a 69% drop in net sales of 40,000 running bales for 2023/2024.
* World 2023/24 cotton ending stocks are nearly 700,000 bales lower compared to January
* In Rajkot, a major spot market, the price ended at 28950.75 Rupees dropped by -0.18 percent.

Turmeric

Turmeric registered a significant gain, closing up by 3.11% at 17482, supported by reduced supplies in the spot market. However, the upside is anticipated to be limited as buying activities have been slower, with expectations of stocks being released ahead of the commencement of new crops. The delayed harvesting of the new crop and tighter ending stocks are expected to keep market sentiments positive for turmeric in the near term. Export activities, which slowed down in recent months, are expected to pick up in the wake of upcoming festivals. Concerns among farmers in Maharashtra over the location of PM Modi's Turmeric Board in Telangana have added to uncertainties in the market. Expectations for a 20–25 percent decline in turmeric seeding this year in various key growing regions contribute to the cautious outlook. Turmeric exports during April-December 2023 dropped by 2.27%, totaling 121,171.01 tonnes compared to 123,984.35 tonnes in the same period of 2022. Importantly, December 2023 witnessed a rise of 21.47% compared to November 2023 but a drop of 13.41% compared to December 2022. In the Nizamabad spot market, a major trading hub, the price ended at 15585.35 Rupees, marking a gain of 2.77%. From a technical standpoint, the market is under fresh buying, evident in the 2.5% gain in open interest, settling at 15370. Prices surged by 528 rupees. Turmeric is currently finding support at 16962, and a breach below could lead to a test of 16442. On the upside, resistance is anticipated at 17890, with a potential move above leading to testing 18298.

Trading Ideas:

* Turmeric trading range for the day is 16442-18298.
* Turmeric prices gained supported by reduced supplies in the spot market.
* However, upside seen limited as buying activities has been slower in expectation of new crops.
* Export has been slow down in recent months and expected to increase in wake of series of festivals ahead.
* In Nizamabad, a major spot market, the price ended at 15585.35 Rupees gained by 2.77 percent.

Jeera

Jeera prices surged by 1.95%, settling at 25675, driven by low-level buying amid emerging weather risks in key producing states of Rajasthan and Gujarat. The potential adverse impact on yields due to weather concerns prompted market participants to engage in cautious buying. The current rabi season witnessed jeera acreage reaching a four-year high, with farmers expanding cultivation in response to record prices observed in the previous marketing season. In Gujarat, jeera cultivation saw a substantial increase of 160%, covering 5.60 lakh hectares compared to 2.75 lakh hectares in the previous year. This surpassed the normal jeera acreage of 3.5 lakh hectares in the state. Rajasthan also experienced a 25% increase in jeera cultivation, reaching 6.90 lakh hectares. Global demand for Indian jeera faced challenges as buyers preferred other origins like Syria and Turkey due to higher prices in India. Export figures during April-December 2023 dropped by 29.95% compared to the same period in 2022. However, December 2023 showed a rise of 51.05% in jeera exports compared to November 2023. Despite India anticipating a potential bumper crop, other major jeera-producing countries expect higher yields, affecting the global market. Technically, the jeera market observed short covering, with a 4.41% drop in open interest to settle at 1494. Prices rose by 490 rupees, finding support at 25150, with potential downside to 24630. Resistance is anticipated at 26140, and a breakthrough could lead to testing 26610.

Trading Ideas:

* Jeera trading range for the day is 24630-26610.
* Jeera gains on low level buying as emerging weather risk may affect yield adversely.
* Jeera acreage hits a four-year high in the current rabi season
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 28153.65 Rupees dropped by -0.49 percent.

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