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Gold

Gold prices experienced a decline of -0.29%, settling at 63203, as profit-booking ensued, driven by signs of recovery in US Treasury yields. Despite this retracement, the broader sentiment towards gold remains positive, with expectations of the Federal Reserve (Fed) initiating interest rate cuts from March. The outlook is supported by a clear downward trajectory in underlying inflation, prompting investors to maintain an optimistic view of the precious metal. The consistent sell-off in the US Dollar, attributed to early rate cut expectations, contributes to supporting the Dollar-denominated value of gold. Federal Reserve Chairman Jerome Powell's commentary on potential rate cuts has led to expectations among investors, although some Fed policymakers consider rate cut discussions premature at present, lacking confidence in inflation reaching the 2% target. The US Department of Labor reported an increase in Initial Jobless Claims (IJC) for the week ending December 22, with individuals claiming jobless benefits rising to 218K, exceeding the consensus of 210K and the previous reading of 206K. In China, net gold imports via Hong Kong rose approximately 37% in November compared to the previous month, reaching 36.801 metric tons. Total gold imports via Hong Kong recorded a 37% increase at 46.049 tons. Technically, the gold market is undergoing long liquidation, with a drop in open interest by -5.3% to settle at 15184. Support is identified at 63045, and a breach below could lead to a test of 62880. On the upside, resistance is observed at 63380, and a move above may test 63550.
Trading Ideas:
* Gold trading range for the day is 62880-63550.
* Gold price eases amid recovery in US Treasury yields.
* The broader appeal for price is bullish as Fed may unwind its restrictive policy stance sooner.
* Fed policymakers see a high likelihood of a market reaction on rate-cut commentary from Fed Chairman Powell.

Silver

Silver prices experienced a decline of -0.71%, settling at 74430, driven by profit booking following earlier gains attributed to expectations of interest rate cuts by the US Federal Reserve. Economic data revealed an increase in weekly claims to 218K, surpassing the estimated 210K. Additionally, the core PCE index fell to 3.2% in November, below the predicted 3.3%, signaling a downward trend in US inflation. Anticipation of the Federal Reserve initiating interest rate cuts next year has grown, with the CME Fedwatch tool indicating over an 88% chance of a rate cut in March. The likelihood of further rate reductions in May exceeds 65%. The market is responding to the Federal Reserve's expected response to the declining trend in US inflation, which was recorded at 3.2% in November. The prospect of a soft landing is bolstered by the Fed's ability to maintain stability in the Unemployment Rate around 3.7%, with layoffs consistently lower than new payroll additions throughout 2023. The dovish sentiment surrounding the Fed's policy pivot is reinforced by data from the Commerce Department, indicating that the Core Personal Consumption Expenditures Price Index rose by only 0.1% in November. >From a technical standpoint, the silver market is currently under long liquidation, marked by a drop in open interest by -2.79% to settle at 14846. Support is identified at 73830, and a breach below could lead to a test of 73235. On the upside, resistance is observed at 74830, with a move above potentially testing 75235.
Trading Ideas:
* Silver trading range for the day is 73235-75235.
* Silver falls on profit-taking post price surge on anticipation of Fed rate cuts.
* Economic data showed an increase in weekly claims to 218K, surpassing the estimated 210K.
* The Fed is expected to start reducing interest rates as inflation in US economy is in a downtrend.

Crude oil

Crude oil prices registered a decline of -0.68%, settling at 6007, as concerns eased over shipping disruptions along the Red Sea route, despite ongoing tensions in the Middle East. Denmark's Maersk announced plans to route almost all container vessels sailing between Asia and Europe through the Suez Canal, with only a handful being diverted around Africa. In the US, crude oil inventories increased by 1.837 million barrels during the week ending December 22, 2023, marking the largest weekly gain since November 17. The build-up follows a 0.939 million barrels rise in the previous week. Meanwhile, the US finalized contracts to purchase 3 million barrels of oil to replenish the Strategic Petroleum Reserve (SPR). The average cost per barrel was $77.31, below the 2022 average of $95 per barrel. This marks part of the effort to rebuild the SPR after last year's historic sale. Despite concerns about global oil supply disruptions, the market is responding to evolving geopolitical dynamics and inventory data. Exports of four main Nigerian crude oil grades in February are expected to average around 657,000 barrels per day, a slight decrease from the previous month. From a technical perspective, the crude oil market is currently under fresh selling pressure, with a gain in open interest by 3.49% to settle at 14803. Support is identified at 5960, and a breach below could lead to a test of 5914. On the upside, resistance is observed at 6057, and a move above could see prices testing 6108.
Trading Ideas:
* Crudeoil trading range for the day is 5914-6108.
* Crude prices fell as concerns eased about shipping disruptions along the Red Sea route.
* US crude oil inventories rise the most in 5 weeks : API
* US buys 3 million barrels of oil for strategic reserve

Natural gas

Natural gas prices experienced a marginal decline of -0.19%, settling at 211.9, influenced by record-high domestic natural gas production in the US, leading to elevated inventories that are currently 10% above the seasonal average. The latest data revealed that US utilities withdrew 87 billion cubic feet of natural gas from storages during the week ending December 22, surpassing market expectations for a 79 bcf draw. This contrasts with the withdrawal of 195 bcf during the same week in the previous year and a five-year (2018-2022) average decrease of 123 bcf for this time of the year. The surge in natural gas production has allowed utilities to build reserves, contributing to the current surplus. Meteorologists forecasted warmer-than-normal weather through December 30, followed by a shift to near or colder-than-normal temperatures from December 31 to January 6. The warmer weather has limited heating demand, as businesses and government offices were closed for the Christmas week. Financial firm LSEG projected US gas demand in the Lower 48, including exports, at 120.5 billion cubic feet per day (bcfd) this week, down from the previous week's 126.6 bcfd. However, demand is anticipated to rise to 130.7 bcfd during the next week as colder temperatures are expected in January. From a technical perspective, the natural gas market is currently witnessing long liquidation, with a drop in open interest by -1.91% to settle at 25880. Natural gas finds support at 208.8, and a breach below this level could lead to a test of 205.6. On the upside, resistance is identified at 214.6, and a move above could see prices testing 217.2.
Trading Ideas:
* Naturalgas trading range for the day is 205.6-217.2.
* Natural gas dropped amid record-high domestic natural gas production in the US has allowed utilities to build reserves.
* US utilities pulled 87 billion cubic feet of natural gas from storages during the week that ended December 22, 2023
* U.S. gas demand in the Lower 48, including exports, at 120.5 bcfd this week

Copper

Copper prices experienced a decline of -0.56%, settling at 730.55, primarily influenced by subdued demand in China following a recent restocking surge, leading to premiums turning into discounts of 110 yuan per ton. Top copper smelters in China adjusted their first-quarter guidance for copper concentrate processing treatment and refining charges lower, reflecting a tightening supply outlook due to mine closures and disruptions. The rates, set at a meeting of the China Smelters Purchase Team, were $80 per metric ton and 8 cents per pound, marking a 16% decrease from the fourth-quarter guidance of $95 per ton and 9.5 cents per pound, a six-year high. The global refined copper market showed a deficit of 53,000 metric tons in October, a slight improvement from the 56,000 metric tons deficit in September, according to the International Copper Study Group. October's refined copper output was 2.34 million metric tons, while consumption reached 2.39 million metric tons. Adjusting for inventory changes in Chinese bonded warehouses, a 52,000 metric tons deficit was reported for October, compared to a 62,000 metric tons deficit in September. From a technical standpoint, the copper market is currently witnessing fresh selling, evident in the 0.18% increase in open interest to settle at 5089. Copper finds support at 727.7, and a breach below this level could lead to a test of 724.8. On the upside, resistance is identified at 734.4, and a move above could propel prices to test 738.2.
Trading Ideas:
* Copper trading range for the day is 724.8-738.2.
* Copper prices dropped as demand in China was subdued after a burst of restocking seen recently
* China aims to expand domestic demand, ensure speedy recovery, promote stable growth
* China smelters cut Q1 copper guidance price as supply outlook tightens

Zinc

Zinc prices recorded a gain of 0.58%, settling at 233.3, supported by a -16.60% decrease in zinc inventories in Shanghai Futures Exchange-monitored warehouses compared to the previous Friday. The international zinc market's deficit reduced to 52,500 metric tons in October from 62,000 tons in September, according to data from the International Lead and Zinc Study Group (ILZSG). However, the surplus for the first 10 months of 2023 was 295,000 tons, compared to a deficit of 33,000 tons in the same period of 2022. Optimism in the market regarding potential interest rate cuts in the U.S. by March continued to grow, bolstered by expectations of a fuller economic recovery and early rate cuts from major central banks. The U.S. dollar index's decline further fueled the market's bullish sentiment. Improved industrial outlook for the coming year was driven by hopes of early interest rate cuts and a more robust economic recovery in China, the top consumer of zinc. In November 2023, China's refined zinc output totaled 579,000 metric tons, a month-on-month decrease of 4.23% but a year-on-year increase of 10.62%. The year-to-date production from January to November reached around 6.03 million metric tons, reflecting a 10.62% increase compared to the same period in the previous year. Technically, the zinc market is witnessing fresh buying, marked by a 10.23% increase in open interest to settle at 5528, coupled with a price increase of 1.35 rupees. Zinc finds support at 231.8, with a breach potentially leading to a test of 230.3 levels. On the upside, resistance is identified at 234.4, and a move above could propel prices to test 235.5.
Trading Ideas:
* Zinc trading range for the day is 230.3-235.5.
* Zinc gains as zinc inventories in SHFE warehouses fell -16.60% on weekly basis.
* The market's optimism that the U.S. will cut interest rates as early as March continues to grow
* The industrial outlook for the next year improved on hopes of early interest rate cuts from major central banks

Aluminium

Aluminium prices exhibited a modest gain of 0.38%, settling at 211.95, as Qinghai Province implemented power load management in the aftermath of an earthquake, potentially impacting aluminium supply. Inventories in London Metal Exchange (LME) registered warehouses surged to fresh highs, reaching 551,050 metric tons, the highest since June 19, after a continuous influx, indicating excess supply. Over the past two weeks, aluminium stocks rose by 24%, climbing by 42,400 metric tons. China, in its 14th five-year plan interim report, outlined its intention to boost domestic demand for economic recovery and stable growth. The plan also emphasizes accelerating reforms to expand the middle-income bracket, deepening market-oriented reforms, and institutional opening up to fuel development. Additionally, risk prevention and resolution in crucial areas are on the agenda. Following the earthquake in Gansu province on December 18, neighboring Qinghai province, a significant aluminium production hub, initiated emergency measures to ensure power supply and load management for earthquake relief. Despite the earthquake, aluminium smelters in the province are reported to be operating normally, with no severe power supply shortages. Technically, the aluminium market is witnessing fresh buying, marked by a 3.27% increase in open interest to settle at 5057, coupled with a price increase of 0.8 rupees. Aluminium finds support at 211, with a breach potentially leading to a test of 209.8 levels. On the upside, resistance is identified at 212.9, and a move above could propel prices to test 213.6.
Trading Ideas:
* Aluminium trading range for the day is 209.8-213.6.
* Aluminium gains as Qinghai earthquake prompts power management, impacting aluminium supply.
* Aluminium stocks over the past two days rose by 42,400 metric tons to 551,050, the highest since June 19.
* Aluminum production hub Qinghai issues power rationing emergency plan

Cotton

Cotton prices, represented by Cottoncandy, saw a marginal decline of -0.04%, settling at 56220, driven by profit booking after a recent price increase. The Cotton Association of India (CAI) maintained its pressing estimate for the 2023-24 season at 294.10 lakh bales, contributing to market dynamics. CAI President Atul S Ganatra highlighted that the total supply till the end of November was estimated at 92.05 lakh bales, consisting of market arrivals, imports, and opening stocks. Reports indicate a decline in the infestation of pink bollworm in the cotton crop, reducing from 30.62% during 2017-18 to 10.80% in 2022-23. However, global factors also play a role, with Brazilian cotton shipments increasing in November, but overall, the International Cotton Advisory Committee (ICAC) projects global cotton production to outpace consumption for the second consecutive year. The 2023/24 U.S. cotton balance sheet shows slightly lower consumption but higher production and ending stocks. Global cotton balance sheets reflect lower consumption but higher production and stocks, influenced by factors like beginning stocks and changes in production estimates. In terms of technical aspects, the market is undergoing fresh selling, with a 1.46% gain in open interest to settle at 209, accompanied by a price decline of -20 rupees. Cottoncandy finds support at 56080, and a breach could lead to a test of 55950 levels. On the upside, resistance is identified at 56360, with a potential move above pushing prices to test 56510. Traders are closely monitoring these levels amid global production dynamics, consumption trends, and external factors affecting the cotton market.
Trading Ideas:
* Cottoncandy trading range for the day is 55950-56510.
* Cotton dropped  on profit booking after prices gained as Cotton output may decline by 8%
* Total supply till end November was estimated at 92.05 lakh bales, which consisted market arrivals of 60.15 lakh bales
* ICAC projected that global cotton production will likely outpace consumption for the second year in a row.
* In Rajkot, a major spot market, the price ended at 26429.95 Rupees dropped by -0.27 percent.

Turmeric

Turmeric prices registered a decline of -0.58%, settling at 14116, driven by slower buying activities ahead of the anticipated release of stocks in anticipation of the commencement of new crops in January 2024. The pressure on prices is also attributed to improved crop conditions resulting from favorable weather. However, the downside is limited due to concerns over potential yield losses caused by the crop's unfavorable weather conditions, supporting price stability. The location of PM Modi's Turmeric Board in Telangana has sparked concerns among farmers in Maharashtra regarding the headquarters location. The current level of buying activity and decreasing supplies are factors expected to sustain price stability. Improved export opportunities have supported the turmeric market, with a 25% increase in exports during April-October 2023 compared to the same period in the previous year. In October 2023, turmeric exports showed a gain of 11.58% compared to September 2023, although a drop of 9.30% was recorded compared to October 2022. Expectations of a 20–25% decline in turmeric seeding, particularly in key producing regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, have been influenced by farmers' shifting priorities. Technically, the market is undergoing fresh selling, marked by a 1.82% gain in open interest to settle at 12,580, accompanied by a price decline of -82 rupees. Turmeric finds support at 13934, and a breach could lead to a test of 13754 levels. On the upside, resistance is identified at 14296, and a move above may push prices to test 14478.
Trading Ideas:
* Turmeric trading range for the day is 13754-14478.
* Turmeric dropped as buying activities has been slower in expectation of commencement of new crops.
* Pressure also seen amid improved crop condition due to favorable weather condition.
* However, downside seen limited due to the potential for yield losses caused by the crop's unfavourable weather.
* In Nizamabad, a major spot market, the price ended at 13300.7 Rupees dropped by -0.09 percent.

Jeera

Jeera prices experienced a significant decline of -2.21%, settling at 30995, primarily attributed to higher production expectations in key cultivating regions like Gujarat and Rajasthan. The aggressive sowing activities in Gujarat, witnessing a remarkable 102% growth in Jeera sowing, and a 13% increase in Rajasthan have contributed to the higher production outlook. Sowing activities in both regions have progressed smoothly, supported by favorable weather conditions. Global demand for Indian Jeera has slumped, as buyers prefer alternative sources like Syria and Turkey due to the comparatively higher prices in India. Export volumes have witnessed a decline, dropping by 34.02% during April-October 2023 compared to the same period in the previous year. In October 2023, Jeera exports fell by 13.39% compared to September 2023 and a substantial 46.77% compared to October 2022. Despite Indian Jeera prices remaining competitive in the global market, the current price competitiveness doesn't favor exporters, leading to subdued overseas demand. Export activity is expected to remain subdued in the coming weeks, given the global market dynamics and the preference of buyers for alternative origins. Technically, the market is undergoing long liquidation, marked by a -7.84% drop in open interest to settle at 2397, accompanied by a price decline of -700 rupees. Jeera finds support at 30180, and a breach could lead to a test of 29370 levels. On the upside, resistance is identified at 32050, with a potential move above pushing prices to test 33110.
Trading Ideas:
* Jeera trading range for the day is 29370-33110.
* Jeera prices dropped due to higher production prospects
* In Gujarat, Cumin sowing witnessed very strong growth by nearly 103% with 530,030.00 hectares against sown area of 2022
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 33356.15 Rupees dropped by -0.84 percent.

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