IGI Logo

Gold

Gold yesterday settled down by -0.01% at 52289 propped up by a retreat in the dollar while investors awaited cues on the U.S. Federal Reserve's monetary policy path. The dollar retreated from strong overnight gains that saw investors flocking to the safe-haven currency on worries over China's COVID flare ups. Cleveland Fed President Loretta Mester said the Federal Reserve can downshift to smaller interest rate hike increments from next month. Investors now await the latest Fed minutes due to be released on Wednesday, with market participants widely expecting a 50-basis point hike in the December meeting, with a peak for rates expected in June. St. Louis Fed President James Bullard said that the policy rate is not sufficiently restrictive and suggested that it could reach the 5% to 7% range as authorities try to stamp out inflation, higher than what the market is currently pricing. San Francisco Fed President Mary Daly also emphasized that a pause is “off the table,” while Kansas City Fed President Esther George said that policymakers must be “careful not to stop too soon” on hiking rates. Physical gold dealers in India were forced to offer the biggest discounts in four months as a jump in domestic prices hit demand. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.41% to settle at 4351 while prices are down -3 rupees, now Gold is getting support at 52185 and below same could see a test of 52082 levels, and resistance is now likely to be seen at 52443, a move above could see prices testing 52598.

Trading Ideas:
* Gold trading range for the day is 52082-52598.
* Gold settled flat due to a stronger dollar, with the U.S. Federal Reserve's monetary policy stance clouding the outlook for non-yielding bullion.
* Investors were cautious ahead of the FOMC minutes which could provide further clues on the pace of the Fed's rate hikes
* Investors are also keeping an eye on the economic fallout from fresh COVID-19 restrictions in China.

Silver

Silver yesterday settled up by 0.58% at 60986 with support from a slight retreat in the dollar ahead of the FOMC minutes release. Besides supporting bullion, hesitancy by the Fed to maintain the pace of its sharp tightening cycle would lift prices due to higher demand for industrial silver usage through electrical conductors. Signs of low supply also lifted prices, as inventories at New York’s COMEX fell 70% in the last 18 months to just over 1 million tonnes. Also, during the period, stocks at the London Bullion Market Association fell for the 10th straight month to a record-low 27.1 thousand tonnes. Investors weighed mixed signals from European Central Bank policymakers on their stance on interest rates against the prospect of weakening global growth and the return of tougher restrictions in China. ECB President Lagarde said last week the central bank would keep raising rates as inflation in the Eurozone remained far above the 2% target, and even a recession is seen as unlikely to ease price pressures enough to let the ECB step off the brakes. Meanwhile, policymaker Holzmann backed a third straight 75 bps rise in the deposit rate next month, while other ECB officials suggested the central bank could slow its pace of rate hikes. Technically market is under short covering as the market has witnessed a drop in open interest by -3.27% to settle at 10820 while prices are up 351 rupees, now Silver is getting support at 60695 and below same could see a test of 60405 levels, and resistance is now likely to be seen at 61445, a move above could see prices testing 61905.

Trading Ideas:
* Silver trading range for the day is 60405-61905.
* Silver gains with support from a slight retreat in the dollar ahead of the FOMC minutes release.
* Fed to lift rates by 50 basis points, but peak policy rate may be higher
* Global demand for silver is expected to rise 16% this year to 1.21 billion ounces


Crude oil

Crude oil yesterday settled up by 2.11% at 6720 after Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market, outweighing global recession worries and concern about China's rising COVID-19 case numbers. Saudi Arabia said that OPEC+ was sticking with oil output cuts and could take further measures to balance the market amid falling prices, denying a report it was considering boosting output, according to state news agency SPA. The Wall Street Journal earlier reported an output increase of 500,000 barrels per day was under discussion for the next meeting of OPEC and its allies, known as OPEC+, on Dec. 4. Kuwait oil minister Bader Al Mulla denied reports that there have been discussions to increase oil production at the next OPEC+ meeting, state new agency KUNA reported. Kuwait is keen to maintain stability and balance in oil markets, the agency quoted Mulla as saying. Saudi Arabia and the United Arab Emirates have also denied a Wall Street Journal report saying an output increase of 500,000 barrels per day was under discussion for the next OPEC+ meeting on Dec. 4. The head of Iraq's state oil marketer SOMO told there have been no discussions about OPEC+ deciding on a production increase at its next meeting. Technically market is under short covering as the market has witnessed a drop in open interest by -32.2% to settle at 9874 while prices are up 139 rupees, now Crude oil is getting support at 6602 and below same could see a test of 6483 levels, and resistance is now likely to be seen at 6799, a move above could see prices testing 6877.

Trading Ideas:
* Crude oil trading range for the day is 6483-6877.
* Crude oil rose after Saudi Arabia said OPEC+ was sticking with output cuts.
* Saudi denies oil output hike discussion, says OPEC+ may cut if needed
* Iraq's SOMO says an OPEC+ oil output increase has not been discussed

Natural gas

Nat.Gas yesterday settled down by -1.03% at 547.5 on forecasts for less cold weather and lower heating demand than previously expected through early December and questions about whether Freeport will be able to restart its liquefied natural gas (LNG) export plant in Texas in mid December as planned. Traders monitoring weather patterns, the delay in Freeport's restart and a possible rail strike. Workers at the largest US rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could disrupt coal deliveries and force power generators to burn more gas. Also, recent forecasts show very cold weather arriving during the first week of December that would ramp up demand for gas-intensive heating. On the other hand, more gas is expected to remain available for domestic use after the Freeport LNG export facility delayed by one month to mid-December its restart, as it continues to repair damages from the June explosion. Meanwhile, EIA data showed US utilities added 64 bcf of gas to storage last week, pushing gas stockpiles closer to the five-year average of 3.651 tcf for this time of the year. Technically market is under long liquidation as the market has witnessed a drop in open interest by -30.95% to settle at 4834 while prices are down -5.7 rupees, now Natural gas is getting support at 526.6 and below same could see a test of 505.8 levels, and resistance is now likely to be seen at 568.6, a move above could see prices testing 589.8.

Trading Ideas:
* Natural gas trading range for the day is 505.8-589.8.
* Natural gas slid on forecasts for less cold weather and lower heating demand through early December.
* Traders monitoring weather patterns, the delay in Freeport's restart and a possible rail strike.
* EIA data showed US utilities added 64 bcf of gas to storage


Copper

Copper yesterday settled up by 0.87% at 668.7 as the dollar eased, although demand concerns due to rising COVID-19 cases in top consumer China kept gains in check. China's capital warned that it was facing its most severe test of the COVID-19 pandemic, with a surge in COVID-19 cases sparking fresh restriction measures. Climbing inventories due to slowing demand and mounting mine supply are set to hit copper prices over coming months, with the move exaggerated by speculators cutting bets on higher prices of the metal used in power and construction. Copper stocks in LME registered warehouses at 91,250 tonnes are up more than 15% since Nov. 10. Expectations around smaller rate hikes from the U.S. Federal Reserve also buoyed sentiment among investors, with Cleveland Fed President Loretta Mester supporting smaller rate increases in December. Global miners and Chinese smelters could set higher annual treatment and refining charges (TC/RCs) in 2023 as rising copper concentrate supply is expected to outpace smelting capacity growth. The TC/RCs benchmark, referenced in supply contracts globally, is usually taken from the first settlement between a major miner and a smelter in top copper consumer China in annual negotiations. BMO forecast the 2023 benchmark at $85 a tonne and 8.5 cents per pound, with an upward skew. Technically market is under short covering as the market has witnessed a drop in open interest by -27.92% to settle at 2874 while prices are up 5.8 rupees, now Copper is getting support at 662.7 and below same could see a test of 656.7 levels, and resistance is now likely to be seen at 674.4, a move above could see prices testing 680.1.

Trading Ideas:
* Copper trading range for the day is 656.7-680.1.
* Copper prices rose as the dollar eased, although demand concerns due to rising COVID-19 cases in China kept gains in check.
* Copper stocks in LME registered warehouses at 91,250 tonnes are up more than 15% since Nov. 10.
* Copper treatment charges for Chinese market seen rising in 2023


Zinc

Zinc yesterday settled down by -0.31% at 260.5 as signs of low demand and a rebound for the US dollar outweighed looming concerns of supply shortages. Global economic growth is set to slow to 2.2% in 2023 from 3.1% this year, before accelerating to 2.7% in 2024, according to the OECD's latest Economic Outlook. The Paris-based policy forum said that the world economy, especially Europe, was facing significant challenges, including the persistent high inflation levels, rising borrowing costs, energy supply shortages, and the ongoing war in Ukraine. Data from top consumer China showed that industrial production slowed more than expected in October, while house prices decline for the sixth consecutive month and further emphasized buyers' caution in the country's highly indebted property developers. Data shows that zinc ingot social stocks across seven major markets in China totalled 60,200 mt as of November 21, down 2,500 mt from last Monday (November 14) and up 1,400 mt from last Friday (November 21). In Shanghai, the overall arrivals in the market were stable, but the market transactions were poor amid stable premiums, hence the inventory in Shanghai barely changed. Technically market is under long liquidation as the market has witnessed a drop in open interest by -9.84% to settle at 1539 while prices are down -0.8 rupees, now Zinc is getting support at 258 and below same could see a test of 255.5 levels, and resistance is now likely to be seen at 263.2, a move above could see prices testing 265.9.

Trading Ideas:
* Zinc trading range for the day is 255.5-265.9.
* Zinc dropped as signs of low demand and a rebound for the US dollar outweighed looming concerns of supply shortages.
* Global economic growth is set to slow to 2.2% in 2023 from 3.1% this year, before accelerating to 2.7% in 2024
* Data from top consumer China showed that industrial production slowed more than expected in October



Aluminium

Aluminium yesterday settled up by 1.67% at 209.75 as expected arrivals in east China have not yet realised, and the social inventory will remain low, supporting the prices. Aluminium stocks at three major Japanese ports fell by 0.7% to 377,200 tonnes at the end of October from 379,700 tonnes at the end of September. Global primary aluminium output in October rose 3.1% year on year to 5.85 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.475 million tonnes, the IAI said. China's aluminium imports in October fell 33.9% from a year earlier due to persistently weak demand and increases in domestic supply. The country brought in 196,460 tonnes, including primary metal and unwrought, alloyed aluminium, last month, according to data from the General Administration of Customs. The drop in imports comes after a ramp-up in domestic production this year. Output in October grew for an eighth consecutive month to 3.45 million tonnes. For the first 10 months of the year, China produced 33.33 million tonnes, up 3.3% from the corresponding period in 2021. Demand for the light metal used in the transportation, construction and packaging sectors however has remained weak due to China's strict COVID curbs. Technically market is under short covering as the market has witnessed a drop in open interest by -16.77% to settle at 2248 while prices are up 3.45 rupees, now Aluminium is getting support at 206.7 and below same could see a test of 203.6 levels, and resistance is now likely to be seen at 211.4, a move above could see prices testing 213.

Trading Ideas:
* Aluminium trading range for the day is 203.6-213.
* Aluminum gained as expected arrivals in east China have not yet realised, and the social inventory will remain low, supporting the prices.
* Global aluminium output rises 3.1% y/y in October – IAI
* Japan aluminium stocks down marginally m/m in October


Mentha oil

Mentha oil yesterday settled up by 0.57% at 956.3 on short covering after prices dropped as mentha exports during Apr-Sept 2022 has dropped by 13.84 percent at 1,107.20 tonnes as compared to 1,285.12 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 220.67 tonnes Mentha was exported as against 238.04 tonnes in August 2022 showing a drop of 7.30%. In the month of September 2022 around 220.67 tonnes of Mentha was exported as against 250.97 tonnes in September 2021 showing a drop of 12.07%. Synthetic Mentha supply remains uninterrupted. Support also seen 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, 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. 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 gained by 20.4 Rupees to end at 1118.8 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -24.28% to settle at 524 while prices are up 5.4 rupees, now Mentha oil is getting support at 948.3 and below same could see a test of 940.4 levels, and resistance is now likely to be seen at 962, a move above could see prices testing 967.8.

Trading Ideas:
* Mentha oil trading range for the day is 940.4-967.8.
* In Sambhal spot market, Mentha oil gained  by 20.4 Rupees to end at 1118.8 Rupees per 360 kgs.
* Mentha oil gained on short covering after prices dropped as exports during Apr-Sept 2022 has dropped by 13.84 percent
* In the month of September 2022 around 220.67 tonnes Mentha was exported showing a drop of 7.30%.
* However, Synthetic Mentha supply remains uninterrupted.


Turmeric

Turmeric yesterday settled down by -3.29% at 7232 amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. As per Andhra Pradesh agricultural department, Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67%. Turmeric exports during Apr- Sept 2022 has rose by 14.65 percent at 88,384.27 tonnes as compared to 77,091.52 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 13,990.65 tonnes turmeric was exported as against 12,147.89 tonnes in August 2022 showing a rise of 15.16%. In the month of September 2022 around 13,990.65 tonnes of turmeric was exported as against 12,598.15 tonnes in September 2021 showing a rise of 11.05%. 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 7488.15 Rupees gained 20.25 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.32% to settle at 9475 while prices are down -246 rupees, now Turmeric is getting support at 7112 and below same could see a test of 6992 levels, and resistance is now likely to be seen at 7420, a move above could see prices testing 7608.

Trading Ideas:
* Turmeric trading range for the day is 6992-7608.
* Turmeric dropped amid lower demand from domestic spice-makers and stockists amid availability of supply form Marathwada region.
* As per Andhra Pradesh agricultural department, turmeric sowing activity completed around 16,921 hectares, down by 12.67% till date from last year.
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In Nizamabad, a major spot market in AP, the price ended at 7488.15 Rupees gained 20.25 Rupees.


Jeera

Jeera yesterday settled down by -0.99% at 24480 as current year sowing area likely to increase in Rajasthan and Gujarat growing regions. As per Gujarat Government, around 77,037 hectares of sowing has been completed as on 21st November 2022 in Jeera key growing regions in Gujarat and according to this data, normal area (three years average) in Gujarat likely to be around 421,457 hectares. Jeera exports during Apr- Sept 2022 has dropped by 21.28 percent at 1,09,587.28 tonnes as compared to 1,39,218.38 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 18,081.78 tonnes jeera was exported as against 24,448.33 tonnes in August 2022 showing a drop of 26.04%. In the month of September 2022 around 18,081.78 tonnes of jeera was exported as against 14,828.07 tonnes in September 2021 showing a rise of 21.94%. 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 down by -130.9 Rupees to end at 24385.2 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -7.97% to settle at 6267 while prices are down -245 rupees, now Jeera is getting support at 24330 and below same could see a test of 24185 levels, and resistance is now likely to be seen at 24710, a move above could see prices testing 24945.

Trading Ideas:
* Jeera trading range for the day is 24185-24945.
* Jeera prices dropped as current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* Current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* 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 down by -130.9 Rupees to end at 24385.2 Rupees per 100 kg.


Cotton

Cotton yesterday settled up by 1.63% at 31820 as cotton production is expected to fall dramatically in Telangana as a result of the four months of incessant rain and pest attacks. While cotton output is expected to be low, cotton quality is also likely to be affected by the same factors. Cotton farmers have demanded a minimum support price (MSP) of ?12,000 a quintal during the current season, saying the cost of production has increased significantly, while yields have dropped. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey and Vietnam. The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales, while also cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece and Mexico. "In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher," the USDA said. In spot market, Cotton dropped by -420 Rupees to end at 31850 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -7.76% to settle at 1663 while prices are up 510 rupees, now Cotton is getting support at 31530 and below same could see a test of 31240 levels, and resistance is now likely to be seen at 31980, a move above could see prices testing 32140.

Trading Ideas:
* Cotton trading range for the day is 31240-32140.
* Cotton prices gained as cotton production is expected to fall dramatically in Telangana
* Spinning mills operated at 40-60 per cent capacity in the first quarter, which may cause cotton consumption to drop
* Data from CFTC showed that speculators cut their net short position on cotton futures
* In spot market, Cotton dropped  by -420 Rupees to end at 31850 Rupees.

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