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Gold yesterday settled down by -0.46% at 58973 as caution prevailed in the run-up to U.S. inflation readings that could set the tone for future monetary policy. Data showed China's consumer sector fell into deflation in July, with the Chinese central bank's stronger than expected exchange-rate fixing also weighing on the U.S. dollar. China continues to put the world on notice that it intends to challenge the U.S. dollar's role as a reserve currency after the nation's central bank bought more gold in July, pushing its current shopping spree to nine consecutive months. The World Gold Council, reported on social media that the People's Bank of China bought 23 tonnes of gold last month. Gopaul noted that so far this year, China has purchased 126 tonnes of gold, increasing its official reserves to 2,136 tonnes. Fed Governor Michelle Bowman outlined the likely need for additional rate hikes to lower inflation to the Fed's 2% target, while New York Fed chief John C. Williams expected that rates could begin to come down next year. A hotter-than-expected CPI number could raise the possibility of another rate hike in September. Reflecting sentiment, SPDR Gold Trust, fell to a five-month low. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.53% to settle at 13786 while prices are down -275 rupees, now Gold is getting support at 58829 and below same could see a test of 58686 levels, and resistance is now likely to be seen at 59238, a move above could see prices testing 59504.

Trading Ideas: 

* Gold trading range for the day is 58686-59504.

* Gold dropped as caution prevailed in the run-up to U.S. inflation readings

* China buys 23 tonnes of gold in July

* China prices deflate in July, weighing on dollar

Silver yesterday settled down by -0.35% at 69972 as traders await the US CPI report for further insights into the potential inflationary pressures on the economy and the outlook for monetary policy. There is an 86% likelihood of the Federal Reserve maintaining the fed funds rate next month while market participants see a nearly 28% chance of a 25bps hike in November. Meanwhile, a $42 billion sale of 3-year notes resulted in a lower yield compared to July, indicative of robust demand for Treasury securities. Upcoming sales of $38 billion of 10-year notes and $23 billion of 30-year bonds this week will also be keenly watched, specially after the Treasury Department announced last week its intent to expand the size of its quarterly bond sales. Moody's cut the credit rating of ten small to mid-sized US banks and warned that other large US banks are also on its downgrade watchlist. In China, latest data showed that the country's imports and exports contracted faster than expected in July, while consumer prices fell for the first time in more than two years, fanning deflation fears. Elsewhere, Italian banks came under pressure after the government imposed a one-off 40% tax on their profits. Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.43% to settle at 18898 while prices are down -244 rupees, now Silver is getting support at 69693 and below same could see a test of 69414 levels, and resistance is now likely to be seen at 70421, a move above could see prices testing 70870.

Trading Ideas: 

* Silver trading range for the day is 69414-70870.

* Silver dropped as traders await the US CPI report.

* There is an 86% likelihood of the Federal Reserve maintaining the fed funds rate next month

* Moody's cut the credit rating of ten small to mid-sized US banks

Crude oil yesterday settled up by 1.3% at 6929 as an escalating conflict in Ukraine stoked fears of further supply disruptions. Ukrainian President Volodymyr Zelensliy said his country would retaliate if Russia continues to block Ukrainian ports, driving traders to push up oil prices. Saudi Arabia also reaffirmed its commitment to extend voluntary output cuts through September. U.S. crude oil production is expected to rise by 850,000 barrels per day to record 12.76 million bpd in 2023, according to a monthly report from the Energy Information Administration. Crude oil production is expected to rise by 330,000 barrels per day to 13.09 million bpd in 2024, EIA data showed. The last record output was 12.3 million bpd in 2019, before the COVID-19 pandemic crushed demand and prices, and drillers were hit by higher costs that squeezed profit margins and investor demands to limit spending. The increases in forecasts are due to come as a result of higher expected well-level productivity and higher crude oil prices, the EIA said. U.S. GDP growth is expected to rise increase by 1.9% in 2023, up from 1.5% in last month's forecast, the EIA said. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.01% to settle at 8577 while prices are up 89 rupees, now Crude oil is getting support at 6847 and below same could see a test of 6764 levels, and resistance is now likely to be seen at 7011, a move above could see prices testing 7092.

Trading Ideas: 

* Crude oil trading range for the day is 6764-7092.

* Crude oil rises on Ukraine conflict, sparking supply disruption fears.

* Saudi Arabia also reaffirmed its commitment to extend voluntary output cuts through September.

* US crude output to rise to record 12.76 mln bpd in 2023 – EIA

Nat.Gas yesterday settled up by 5.36% at 243.7 tracking rise in European prices driven by concerns about dwindling LNG flows, which outweighed the fact that gas storage is at record levels. The Energy Information Administration (EIA) reported that the U.S. natural gas production and demand will rise to record highs in 2023, in its Short Term Energy Outlook. The EIA forecasted that dry gas output will rise to 103 billion cubic feet per day (bcfd) in 2023 and 104.12 bcfd in 2024 from a record 98.13 bcfd in 2022. The agency also predicts that domestic gas consumption would rise from a record 88.53 bcfd in 2022 to 89.34 bcfd in 2023 before falling to 87.88 bcfd in 2024. Meanwhile, predictions suggest that hotter-than-usual weather will persist until at least August 19, prompting investors to anticipate higher consumption. Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 23. Data provider Refinitiv forecast U.S. gas demand, including exports, would rise from 101.8 billion cubic feet per day (bcfd) this week to 105.2 bcfd next week as power generators burn more of the fuel and exports rise. Average gas output in the U.S. Lower 48 states was 102.1 bcfd so far in August, up from 101.8 bcfd in July. Technically market is under short covering as the market has witnessed a drop in open interest by -14.02% to settle at 20706 while prices are up 12.4 rupees, now Natural gas is getting support at 232.7 and below same could see a test of 221.8 levels, and resistance is now likely to be seen at 252.4, a move above could see prices testing 261.2.

Trading Ideas: 

* Natural gas trading range for the day is 221.8-261.2.

* Natural gas rose driven by concerns about dwindling LNG flows

* EIA reported that the U.S. natural gas production and demand will rise to record highs in 2023

* The EIA forecasted that dry gas output will rise to 103 bcfd in 2023 and 104.12 bcfd in 2024 from a record 98.13 bcfd in 2022.

Copper yesterday settled up by 0.39% at 732.2 after data showed that China’s consumer inflation dropped 0.3% in July from a year ago earlier, less than market decrease. Chinese authorities pledged to ramp up policy support to boost a flagging economy, but the lack of concrete plans and forceful measures disappointed markets. On the monetary policy front, the People’s Bank of China lowered key short-term interest rates in June for the first time in ten months, but decided to keep rates unchanged at their July fixings. Both Chinese imports and exports contracted more than expected in July, while year-to-date copper imports slid by 10.7% to reflect a sharp downturn in demand for industrial inputs. The results follow contractionary manufacturing PMI readings and fresh signs of stress in property developers' financial stability, further clouding industrial activity. Still, the decline was limited by concerns that lower supply will coincide with higher demand for copper-intensive sustainable infrastructure in coming years, risking wide shortages. State-owned Chilean miner Codelco raised its output projections by 70,000 tonnes to 1.31-1.35 million tonnes this year, shortly after the giant reported that production in the first half of 2023 tanked by 14%. Technically market is under short covering as the market has witnessed a drop in open interest by -5.91% to settle at 5653 while prices are up 2.85 rupees, now Copper is getting support at 729.9 and below same could see a test of 727.4 levels, and resistance is now likely to be seen at 735.7, a move above could see prices testing 739.

Trading Ideas: 

* Copper trading range for the day is 727.4-739.

* Copper gains as China’s consumer inflation dropped 0.3% in July

* Chinese authorities pledged to ramp up policy support to boost a flagging economy

* China’s year-to-date copper imports slid by 10.7% to reflect a sharp downturn in demand for industrial inputs

Zinc yesterday settled up by 0.63% at 222.85 as the LME cash zinc contract was at a $30.25-per-metric-ton premium over the three-month contract, switching from the discount zone seen most of the time since late April and indicating nearby supply tightness. However, worries about the global economy flared up after Chinese data showed imports and exports in the world's biggest metals consumer contracted much faster than expected in July. The data checked a rally in metals prices while raising hopes for more stimulus measures from the Chinese government. LME inventory continues to rebound, and fundamental weakness has become a foregone conclusion. The dollar strengthened after a survey from the Federal Reserve showed U.S. banks reported tighter credit standards and weaker loan demand during the second quarter, a sign rising interest rates are having an impact on the economy. Global refined zinc supply is expected to increase by 1.9%, considering a low base year and as energy costs in Europe ease, while power curbs in China limit zinc smelter production. The global zinc market surplus slipped to 53,000 metric tons in May, down from 64,000 tons a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.71% to settle at 3440 while prices are up 1.4 rupees, now Zinc is getting support at 221.7 and below same could see a test of 220.5 levels, and resistance is now likely to be seen at 224.1, a move above could see prices testing 225.3.

Trading Ideas: 

* Zinc trading range for the day is 220.5-225.3.

* Zinc gains as LME cash zinc contract was at $30.25 indicating supply tightness.

* Further support seen amid raising hopes for more stimulus measures from the Chinese government.

* However, worries about the global economy flared up after Chinese imports and exports contracted

Aluminium yesterday settled up by 0.05% at 200.4 as China's central bank governor pledged to guide more financial resources towards the private economy, suggesting refreshed urgency from Beijing to bolster the confidence among private firms as economic momentum weakens. During a meeting with at least eight private firms from sectors including property, aluminium and agribusiness, the People's Bank of China (PBOC) Governor Pan Gongsheng said the bank would roll out guidelines to support private firms. On the supply side of the fundamentals, Yunnan region is maintaining resumption of production. Currently, more than 80% of the resumption plan has been completed, and production continues to be released. The pressure on the supply side may continue to increase, and the space above aluminum prices is limited. Downstream construction on the demand side has rebounded, with positive expectations on the demand side boosted by policies. In terms of inventory, the pace of aluminum ingot social inventory accumulation is repeated and inventory is relatively low, which still has some support for prices. The premium for aluminium shipments to Japanese buyers for July to September was set at $127.5 per metric ton, near the previous quarter's levels, as local demand remained sluggish with ample stocks. Technically market is under fresh buying as the market has witnessed a gain in open interest by 4.23% to settle at 4041 while prices are up 0.1 rupees, now Aluminium is getting support at 199.8 and below same could see a test of 199.1 levels, and resistance is now likely to be seen at 201.4, a move above could see prices testing 202.3.

Trading Ideas: 

* Aluminium trading range for the day is 199.1-202.3.

* Aluminium gains as China's central bank to guide more financial support

* Yunnan region is maintaining resumption of production.

* Downstream construction on the demand side has rebounded, with positive expectations on the demand side boosted by policies.

Mentha oil yesterday settled up by 0.36% at 883.1 on low level buying after prices dropped amid rise in supplies of new crop. Supplies have increased in Uttar Pradesh and Bihar as harvesting activities has picked up. Production prospects have improved with rising yield supported by favorable weather condition. Moreover, reports of slack export of menthol will put pressure on prices. Rising menthol imports, as well as China's limited purchasing, will put pressure on pricing. Mentha exports during Apr-May 2023, dropped by 51.60 percent to 183.98 tonnes as compared to 380.12 tonnes exported during Apr-May 2022. In May 2023 around 86.13 tonnes of Mentha was exported as against 97.85 tonnes in April 2023 showing a drop of 13.60%. In May 2023 around 86.13 tonnes of Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 58.96%. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year, production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. Technically market is under short covering as the market has witnessed a drop in open interest by -0.11% to settle at 930 while prices are up 3.2 rupees, now Mentha oil is getting support at 878.5 and below same could see a test of 873.9 levels, and resistance is now likely to be seen at 888.2, a move above could see prices testing 893.3.

Trading Ideas: 

* Mentha oil trading range for the day is 873.9-893.3.

* Menthaoil gained on low level buying after prices dropped amid rise in supplies of new crop.

* Supplies have increased in Uttar Pradesh and Bihar as harvesting activities has picked up.

* Production prospects have improved with rising yield supported by favorable weather condition.

Turmeric yesterday settled down by -1.5% at 17086 on profit booking after prices gained due to lower sowing acreage and lower ending stocks. Delayed monsoons and inadequate initial rainfall have hampered turmeric cultivation, potentially leading to higher prices shortly. A shortage in present market supply further contributes to this upward trend, with prices witnessing a staggering 60 percent increase over the past two months. Regions like Maharashtra and Andhra Pradesh, known for their robust turmeric production, have experienced heavy rain-induced crop damage. This unfortunate combination of factors raises concerns about a potential decrease in turmeric production, leading to escalated prices. The looming threat of El Nino casts a shadow over the upcoming turmeric crop. Meteorological predictions suggest the activation of El Nino in July, potentially resulting in reduced rainfall and drought conditions. Such conditions could particularly impact yields, like turmeric, that heavily rely on monsoon irrigation. Farmers shift in focus has led to expectations of a 20-25 percent decrease in turmeric sowing this year, notably in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Turmeric exports during Apr-May 2023, rose by 27.55 percent at 39,418.73 tonnes as compared to 30,903.38 tonnes exported during Apr-May 2022. In Nizamabad, a major spot market in AP, the price ended at 14412.25 Rupees gained 117.05 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.91% to settle at 14465 while prices are down -260 rupees, now Turmeric is getting support at 16742 and below same could see a test of 16396 levels, and resistance is now likely to be seen at 17634, a move above could see prices testing 18180.

Trading Ideas: 

* Turmeric trading range for the day is 16396-18180.

* Turmeric dropped on profit booking after prices gained due to lower sowing acreage and lower ending stocks.

* Farmers and stockists are holding onto their stocks in anticipation of price increases due to lower sowing acreage

* In May 2023 around 19,827.86 tonnes of turmeric was exported as against 19,590.87 tonnes in April 2023 showing a rise of 1.21%.

* In Nizamabad, a major spot market in AP, the price ended at 14412.25 Rupees gained 117.05 Rupees.

Jeera yesterday settled up by 1.34% at 63080 as supply is limited due to the rainy environment. However, the cumin market is currently facing slow export and domestic demand. Due to heavy rains impacting cumin quality, there have been disruptions in the cumin business across Gujarat, Rajasthan, and other regions. China’s cumin imports and exports have caused temporary corrections in cumin prices, with a recent $200 decrease in the international market. The possibility of China purchasing Indian cumin in October-November before the arrival of new cumin adds further uncertainty to the market dynamics. Cumin imports in May 2023 reached 210 metric tons, showing a substantial increase of 227.73% compared to the previous month's import volume of 64 metric tons. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. Jeera exports during Apr-May 2023, rose by 67.90 percent at 42,988.50 tonnes as compared to 25,603.35 tonnes exported during Apr-May 2022. In May 2023 around 25,903.63 tonnes of jeera was exported as against 17,084.87 tonnes in April 2023 showing a rise of 51.52%. In May 2023 around 25,903.63 tonnes of jeera was exported as against 14,894.62 tonnes in May 2022 showing a rise of 73.91%. In Unjha, a key spot market in Gujarat, jeera edged up by 803.95 Rupees to end at 62204.85 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 10.11% to settle at 5622 while prices are up 835 rupees, now Jeera is getting support at 62490 and below same could see a test of 61895 levels, and resistance is now likely to be seen at 63590, a move above could see prices testing 64095.

Trading Ideas: 

* Jeera trading range for the day is 61895-64095.

* Jeera prices gained as supply is limited due to the rainy environment.

* However, the cumin market is currently facing slow export and domestic demand.

* The market is expecting a lower yield and quality of jeera this season

* In Unjha, a key spot market in Gujarat, jeera edged up by 803.95 Rupees to end at 62204.85 Rupees per 100 kg.

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