IGI Logo

Gold

Gold yesterday settled up by 0.34% at 49319 recovering slightly from a recent low as the relentless dollar rally took a breather. Meanwhile, the yellow metal remains close to its lowest levels in 2-½-years on expectations that the US Federal Reserve will tighten monetary settings further to stamp out surging inflation. A slew of Fed officials indicated their commitment to the fight against inflation, even at the risk of some economic pain and further market volatility. Investors also digested an OECD report where it downgraded its global economic growth forecast to 2.2% in 2023 from an earlier projection of 2.8%, citing aggressive monetary tightening in advanced economies and the prolonged Russia-Ukraine war. However, even as gold is widely considered as a hedge against inflation and economic uncertainties, higher interest rates raise the opportunity cost of holding non-yielding bullion, while investors continue to opt for the dollar as a safe-haven asset. China's net gold imports via Hong Kong jumped nearly 40% to an over four-year high in August, data showed, as demand continued to rebound in the world's biggest consumer of the metal. Net imports stood at their highest since June 2018 at 68.227 tonnes in August, compared with 48.773 tonnes in July, data from the Hong Kong Census and Statistics Department showed. Technically market is under short covering as the market has witnessed a drop in open interest by -48.76% to settle at 2429 while prices are up 169 rupees, now Gold is getting support at 49101 and below same could see a test of 48883 levels, and resistance is now likely to be seen at 49518, a move above could see prices testing 49717.

Trading Ideas:
* Gold trading range for the day is 48883-49717.
* Gold prices climbed, recovering slightly from a recent low as the relentless dollar rally took a breather.
* A slew of Fed officials indicated their commitment to the fight against inflation, even at the risk of some economic pain.
* OECD downgraded its global economic growth forecast to 2.2% in 2023 from an earlier projection of 2.8%.


Silver

Silver yesterday settled up by 0.05% at 55379 as a slight pullback in the dollar and U.S. Treasury yields helped tide over some pressure from prospects of more aggressive U.S. rate hikes. The Federal Reserve has aggressively raised interest rates since March and has signaled more increases are to come, stoking concerns of a global recession and triggering a sell-off in equity markets. Along with rate hikes by major central banks, the Fed raised its fund's rate by 75 bps for the 3rd straight time and projected that borrowing could reach as high as 4.6% by March 2023. Also, a slowdown in the global economy is reducing the consumption of electronics and automobiles and sales of jewelry from major consumers China and India. In addition, progress toward green technologies, such as solar panel production suffered a setback as China and India take advantage of affordable oil and gas from Russia while Europe is returning to coal as an energy alternative. Cleveland Fed President Loretta Mester gave a hawkish speech Monday saying that inflation is "unacceptably high" and that "when there is uncertainty, it can be better for policymakers to act more aggressively because aggressive and preemptive action can prevent the worst case outcomes." Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.52% to settle at 20297 while prices are up 27 rupees, now Silver is getting support at 54999 and below same could see a test of 54620 levels, and resistance is now likely to be seen at 55967, a move above could see prices testing 56556.

Trading Ideas:
* Silver trading range for the day is 54620-56556.
* Silver bounced as a slight pullback in the dollar and U.S. Treasury yields
* The benchmark 10-year Treasury yield retreated from a 12-year peak
* Fed’s Mester says rates are not coming down next year


Crude oil

Crude oil yesterday settled up by 2.19% at 6473 supported by supply curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and a slight softening in the U.S. dollar. OPEC+, may take action to stem the drop in prices by cutting supply also lent support. OPEC+ meets to set policy on Oct. 5. Supply cuts were back in focus lending some support. BP and Chevron said they shut production at offshore platforms in the Gulf of Mexico as Hurricane Ian approached the region. The price drop has raised speculation that OPEC+ could intervene. Iraq's oil minister said the group was monitoring prices and didn't want a sharp increase or a collapse. Still, the oil market is down about 25% in the third quarter of the year, the first drop in more than two years, as tightening monetary conditions aimed at bringing down high inflation escalated concerns about a global recession and lower energy demand. Growth in China, the second major oil consumer, is set to slow to 2.8% this year from 8.1% in 2021, according to the latest forecasts from the World Bank. Meanwhile, investors remain cautious about the potential for further supply disruptions due to the prolonged Russia-Ukraine war, as well as the looming European Union ban on Russian crude set to take effect in December. Technically market is under short covering as the market has witnessed a drop in open interest by -21.87% to settle at 8458 while prices are up 139 rupees, now Crude oil is getting support at 6356 and below same could see a test of 6238 levels, and resistance is now likely to be seen at 6556, a move above could see prices testing 6638.

Trading Ideas:
* Crude oil trading range for the day is 6238-6638.
* Crude oil prices rose as the dollar eased and Hurricane Ian advanced to the west coast of Florida.
* Only OPEC+ output cut can break negative momentum in oil – UBS
* BP, Chevron cut offshore oil production ahead of Hurricane Ian


Nat.Gas
Nat.Gas yesterday settled down by -2.24% at 563 as Hurricane Ian advanced toward Florida and on forecasts for milder weather over the next two weeks that will likely cut gas demand. Gas storage sites in the UK were 95.8% full as of September 25th, higher than the EU average of 87.7% full storage according to data from the Aggregated Gas Storage Inventory. Meanwhile, there are growing worries about future Russian supplies after Nord Stream reported a pressure drop on both strings of the pipeline, currently shut. Elsewhere, the new Prime Minister Liz Truss announced an estimated £150bn package to ease the ongoing cost-of-living crisis, including capping domestic energy prices for households at £2,500 while limiting them for businesses. Hurricane Ian was expected to produce wind and storm surge impacts in western Cuba, the National Hurricane Center (NHC) said. U.S. natural gas prices at the Henry Hub benchmark in Louisiana will rise to $6.83 per million British thermal units (mmBtu) in 2022, their highest since 2008, before falling to $5.61 in 2023, according to analyst forecasts. That compares with a seven-year high of $3.91 per mmBtu in 2021, a 25-year low of $2.03 in 2020 due to coronavirus demand destruction and a five-year average (2017-2021) of $2.93. In 2008, gas prices averaged a record $8.86. Technically market is under fresh selling as the market has witnessed a gain in open interest by 26.11% to settle at 5863 while prices are down -12.9 rupees, now Natural gas is getting support at 548.8 and below same could see a test of 534.6 levels, and resistance is now likely to be seen at 585.4, a move above could see prices testing 607.8.

Trading Ideas:
* Natural gas trading range for the day is 534.6-607.8.
* Natural gas fell as Hurricane Ian advanced toward Florida and on forecasts for milder weather over the next two weeks that will likely cut gas demand.
* There are growing worries about future Russian supplies after Nord Stream reported a pressure drop on both strings of the pipeline, currently shut.
* Hurricane Ian was expected to produce wind and storm surge impacts in western Cuba, the National Hurricane Center (NHC) said



Copper
Copper yesterday settled down by -0.23% at 626.65 as a low appetite for risky assets amid fears of weakening global economic growth weighed on prices. However, downside seen limited as inventories of copper in China bonded warehouses continued to deplete and were last at a record low of 81,800 tonnes. As global central banks hiked interest rates to curb sticky inflation, the world economic growth outlook weakened and threatened demand for metals and hurt risk sentiment. China's top copper smelters increased their floor treatment and refining charges (TC/RCs) for the fourth quarter of 2022 by 32.9% from a year earlier on steady smelting demand amid an expected global increase in concentrate supply. The floor charges of $93 per tonne and 9.3 cents per pound were set at a meeting of the China Smelters Purchase Team (CSPT) held. The charges are higher than the $80 per tonne and 8 cents per pound set for the third quarter of 2022, and also up from $70 per tonne and 7 cents per pound set for the fourth quarter of 2021. Miners pay TC/RCs to smelters to process copper concentrate into refined metal, offsetting the cost of the ore. The charges fall when supply tightens and rise when more concentrate is available. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.34% to settle at 6191 while prices are down -1.45 rupees, now Copper is getting support at 622.7 and below same could see a test of 618.7 levels, and resistance is now likely to be seen at 633.6, a move above could see prices testing 640.5.

Trading Ideas:
* Copper trading range for the day is 618.7-640.5.
* Copper dropped as a low appetite for risky assets amid fears of weakening global economic growth weighed on prices.
* However, downside seen limited as inventories of copper in China bonded warehouses continued to deplete and were last at a record low of 81,800 tonnes.
* LME copper inventories rose to 129,000 tonnes, their highest since Aug. 15.


Zinc
Zinc yesterday settled down by -1.22% at 263.5 pressured by extensive rate hikes across the world as well as lowered global economic growth forecast for the next year by OECD. The global zinc market moved to a deficit of 72,800 tonnes in July from a surplus of 34,600 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 1,400 tonnes in June. During the first seven months of 2022, ILZSG data showed a surplus of 83,000 tonnes versus a deficit of 23,000 tonnes in the same period of 2021. The People’s Bank of China stepped up cash injection towards the quarter-end by making the biggest daily offering since February 28th. The central bank said in a statement that it had injected a total of CNY 175 billion (USD 24.46 billion) via open market operations, including CNY 113 billion through 7-day reverse repos and another CNY 62 billion through the 14-day tenor, adding that the move aimed at maintaining liquidity level stable at end of the quarter. Profits earned by China's industrial firms declined by 2.1% yoy to CNY 55.25 trillion in the first eight months of the year, following a 1.1% drop in the previous period, amid strict COVID curbs, a slowdown in factory activity due to heatwaves, and a deepening property downturn. Technically market is under fresh selling as the market has witnessed a gain in open interest by 11.11% to settle at 1960 while prices are down -3.25 rupees, now Zinc is getting support at 260.4 and below same could see a test of 257.3 levels, and resistance is now likely to be seen at 268.7, a move above could see prices testing 273.9.

Trading Ideas:
* Zinc trading range for the day is 257.3-273.9.
* Zinc dropped pressured by extensive rate hikes across the world as well as lowered global economic growth forecast for the next year by OECD
* China industrial profits fall 2.1% Yoy in Jan-August
* PBoC makes largest daily cash injection in 7 months



Aluminium
Aluminium yesterday settled down by -1% at 188.9 as a low appetite for risky assets amid fears of weakening global economic growth weighed on prices. As global central banks hiked interest rates to curb sticky inflation, the world economic growth outlook weakened and threatened demand for metals and hurt risk sentiment. Global primary aluminium output in August rose 3.49% year on year to 5.888 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.5 million tonnes in August, the IAI said. China's aluminium imports in August dropped 19% from a year earlier, customs data showed, reflecting lowered import appetite amid record-high domestic production and tight overseas supply. The country brought in 200,440 tonnes of unwrought aluminium and products, including primary metal and unwrought, alloyed aluminium last month, according to data from the General Administration of Customs. The fall in imports came as supply jitters at home eased thanks to this year's production ramp-up as power restrictions that curtailed domestic production were relaxed. Profits earned by China's industrial firms declined by 2.1% yoy to CNY 55.25 trillion in the first eight months of the year, following a 1.1% drop in the previous period, amid strict COVID curbs, a slowdown in factory activity due to heatwaves, and a deepening property downturn. Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.21% to settle at 4700 while prices are down -1.9 rupees, now Aluminium is getting support at 188 and below same could see a test of 187 levels, and resistance is now likely to be seen at 190.5, a move above could see prices testing 192.

Trading Ideas:
* Aluminium trading range for the day is 187-192.
* Aluminium dropped as a low appetite for risky assets amid fears of weakening global economic growth weighed on prices.
* Global aluminium output rises 3.49% year on year in August – IAI
* China's August aluminium imports fall 19% on year as domestic output rises


Mentha oil

Mentha oil yesterday settled down by -0.16% at 992.8 as Synthetic Mentha supply remains uninterrupted. However, downside seen limited amid low production this season and improving demand post-pandemic. 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 we forecast 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. Mentha exports during Apr-July 2022 has dropped by 19.63 percent at 648.49 tonnes as compared to 806.87 tonnes exported during Apr-July 2021. In the month of July 2022 around 155.04 tonnes Mentha was exported as against 113.33 tonnes in June 2022 showing a rise of 36.80. In the month of July 2022 around 155.04 tonnes of Mentha was exported as against 283.33 tonnes in July 2021 showing a decline of over 45.28%. In the month of June 2022 around 113.33 tonnes Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 46%. In Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil dropped by -15 Rupees to end at 1114.7 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.35% to settle at 1436 while prices are down -1.6 rupees, now Mentha oil is getting support at 989.2 and below same could see a test of 985.6 levels, and resistance is now likely to be seen at 996.2, a move above could see prices testing 999.6.

Trading Ideas:
* Mentha oil trading range for the day is 985.6-999.6.
* In Sambhal spot market, Mentha oil dropped  by -15 Rupees to end at 1114.7 Rupees per 360 kgs.
* Mentha oil dropped as Synthetic Mentha supply remains uninterrupted.
* However, downside seen limited amid low production this season and improving demand post-pandemic.
* In the month of July 2022 around 155.04 tonnes Mentha was exported as against 113.33 tonnes in June 2022 showing a rise of 36.80.


Turmeric
Turmeric yesterday settled up by 0.29% at 6832 on low level buying after prices seen pressured as sowing activities has almost completed in major growing states across India and Crop size is expected to be on par. The Product Advisory Committee (PAC) on turmeric has rejected calls for banning futures trade in the commodity, claiming that it has not found any unusual movement in its price. As per Andhra Pradesh agricultural department, sowing activity completed around 7,958 hectares as compared to last year same period 7,764 hectares. Sufficient stocks and good sowing reports kept turmeric prices under pressure. Turmeric exports during Apr-July 2022 has rose by 17.72 percent at 62,245.73 tonnes as compared to 52,875.44 tonnes exported during Apr-July 2021. In the month of July 2022 around 12,810.36 tonnes turmeric was exported as against 18,532.00 tonnes in June 2022 showing a drop of 30.87%. In the month of July 2022 around 12,810.36 tonnes of turmeric was exported as against 12,826.38 tonnes in July 2021 showing a decrease of 0.12%. In the month of June 2022 around 17,532.00 tonnes of turmeric was exported as against 13,206 tonnes in June 2021 showing an increase of 40.33%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. The Spices Board has pegged turmeric production at 1.33 mln tn, up 18.4% on year. In Nizamabad, a major spot market in AP, the price ended at 7207.15 Rupees dropped -64.95 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -1.02% to settle at 11640 while prices are up 20 rupees, now Turmeric is getting support at 6796 and below same could see a test of 6758 levels, and resistance is now likely to be seen at 6876, a move above could see prices testing 6918.

Trading Ideas:
* Turmeric trading range for the day is 6758-6918.
* Turmeric gained on low level buying after prices seen pressured as sowing activities has almost completed and Crop size is expected to be on par.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* In the month of July 2022 around 12,810.36 tonnes turmeric was exported as against 18,532.00 tonnes in June 2022 showing a drop of 30.87%.
* In Nizamabad, a major spot market in AP, the price ended at 7207.15 Rupees dropped -64.95 Rupees.


Jeera
Jeera yesterday settled up by 0.2% at 24865 as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices in coming months. Arrivals also observed to be less during the month. Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month supported by decrease in arrivals in Rajasthan as well as in Gujarat. Jeera exports during Apr-July 2022 has dropped by 37.28 percent at 67,057.16 tonnes as compared to 1,06 ,929.72 tonnes exported during Apr-July 2021. In the month of July 2022 around 19,866.18 tonnes jeera was exported as against 21,587.63 tonnes in June 2022 showing a drop of 7.97%. In the month of July 2022 around 19,866.18 tonnes of jeera was exported as against 24,167.64 tonnes in June 2021 showing a decrease of 17.80%. In the month of June 2022 around 21,587.63 tonnes of jeera was exported as against 30,989.86 tonnes in June 2021 showing a decrease of 30.34%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. Jeera production was seen at 725,651 tn, down 8.8% on year due to lower acreage in Rajasthan and Gujarat, the key producer, according to data from Spices Board India. According to fourth advanced estimates by Gujarat government, jeera production is seen fall by 44.5 per cent to 221500 tonnes in 2021-22 on yoy basis In Unjha, a key spot market in Gujarat, jeera edged up by 161.25 Rupees to end at 24690.9 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -0.44% to settle at 7506 while prices are up 50 rupees, now Jeera is getting support at 24700 and below same could see a test of 24535 levels, and resistance is now likely to be seen at 25035, a move above could see prices testing 25205.

Trading Ideas:
* Jeera trading range for the day is 24535-25205.
* Jeera prices rose as supply was observed to be less as farmers and stockists were holding stocks
* Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month
* All-India Jeera production is expected to fall in the Marketing year 2022-23 by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings.
* In Unjha, a key spot market in Gujarat, jeera edged up by 161.25 Rupees to end at 24690.9 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -1.94% at 31770 as Cotton output is expected to rebound from last years’ experience of unseasonal rain affecting the crop. Production this year is seen at 341.9 lakh bales (170 kg) against 312.03 lakh bales last year. Record prices for cotton, topping ?1 lakh a candy (356 kg) have helped increase the area under the fibre crop by 7.5 per cent this year. Pakistan’s cotton production has shrunk 19% to 2.19 million bales till September 15, 2022 in the current season mainly due to the devastation caused by heavy rainfall and flash floods nationwide. In its monthly supply-demand report, the 2022/23 U.S. cotton projections include higher beginning stocks, production, exports and ending stocks this month, the USDA's report said. Additionally, the 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. In spot market, Cotton dropped by -210 Rupees to end at 36390 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 8.27% to settle at 1008 while prices are down -630 rupees, now Cotton is getting support at 31480 and below same could see a test of 31190 levels, and resistance is now likely to be seen at 32210, a move above could see prices testing 32650.

Trading Ideas:
* Cotton trading range for the day is 31190-32650.
* Cotton prices dropped as traders weighed prospects of lower demand and higher supplies.
* Growing slowdown worries due to faster rate hikes and economic uncertainty are set to put prices under pressure.
* India’s Cotton sowing gained by nearly 7.45% to 127.39 lakh hectares in 2022 against an area sown of 118.56 lakh hectares in 2021.
* In spot market, Cotton dropped  by -210 Rupees to end at 36390 Rupees.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer