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Gold
Gold yesterday settled down by -1.56% at 50500 as expectations about a more aggressive Fed than previously thought and mounting fears over a looming recession fueled a rush to the safe-haven greenback and interest-yielding Treasury notes, further eroding the bullion’s store of value appeal. The Federal Reserve cemented expectations for an extended monetary tightening path, with multiple policymakers advocating for another aggressive 75bps rate hike in July to curb surging consumer prices. Elsewhere, the European Central Bank is also poised to join its G7 counterparts in the tightening of monetary policy, with the liftoff of its benchmark interest rate scheduled for this month and will likely set positive deposit interest rates for the first time since 2012 later in Q3 of this year. The gold imports by India witnessed three-fold jump during the month of June this year, compared with the same month a year before. The country’s gold imports totalled 49 tonnes in June this year. This compares with 17 tonnes imported during June 2021. By value, the imports surged higher from $969 million a year before to $2.61 billion. Meantime, the cumulative gold imports during the initial half of the year dropped to 335 tonnes, compared with 493 tonnes during Jan-June ’21. Technically market is under long liquidation as market has witnessed drop in open interest by -3.94% to settled at 9819 while prices down -802 rupees, now Gold is getting support at 50126 and below same could see a test of 49753 levels, and resistance is now likely to be seen at 51196, a move above could see prices testing 51893.
Trading Ideas:
* Gold trading range for the day is 49753-51893.
* Gold prices slumped as expectations about a more aggressive Fed than previously thought.
* Fed cemented expectations for an extended monetary tightening path, with multiple policymakers advocating for another aggressive 75bps rate hike in July
* The European Central Bank is also poised to join its G7 counterparts in the tightening of monetary policy

Silver
Silver yesterday settled down by -0.24% at 56726 as mounting recession fears drove investors out of commodities and into the safe-haven dollar. The metal also came under pressure from aggressive interest rate hikes globally aimed at curbing high inflation, with the pace of policy tightening among major central banks expected to continue in the second half of 2022. Federal Reserve policymakers cemented expectations for further monetary tightening, signaling another 75 basis point rate hike in July to arrest surging prices. The European Central Bank is also expected to start raising interest rates this month and bring borrowing costs into positive territory in the third quarter. Investor morale across the 19-country euro zone plunged to its lowest level since May 2020, pointing toward an "inevitable" recession. A survey showed business growth across the euro zone slowed further last month, partly due to inflationary pressures. Central bank action remained in focus after the Reserve Bank of Australia raised its cash rate by 50 basis points to 1.35 percent, its third successive increase to combat inflation, and flagged more tightening ahead. The Bank of England said in its latest biannual Financial Stability Report that the global economic outlook has "deteriorated materially" and that banks should ramp up capital buffers to ensure they can weather the storm. Technically market is under long liquidation as market has witnessed drop in open interest by -2.58% to settled at 21897 while prices down -139 rupees, now Silver is getting support at 56124 and below same could see a test of 55523 levels, and resistance is now likely to be seen at 57302, a move above could see prices testing 57879.
Trading Ideas:
* Silver trading range for the day is 55523-57879.
* Silver dropped as mounting recession fears drove investors out of commodities and into the safe-haven dollar.
* The metal also came under pressure from aggressive interest rate hikes globally aimed at curbing high inflation
* Federal Reserve policymakers cemented expectations for further monetary tightening, signaling another 75 basis point rate hike in July

Crude oil
Crude oil yesterday settled down by -0.19% at 7766 as a strike in the Norwegian oil and gas sector came to an end, avoiding a 341K loss of barrels of oil by the weekend. Renewed concerns of COVID-19 lockdowns across China could also cap oil price gains. Market volatility is set to continue as investors weigh prospects of falling demand due to slowing growth and tight supply. China reported new coronavirus cases, raising concerns of more lockdowns. At the same time, a strike in the Norwegian oil and gas sector came to an end, avoiding a 341K loss of barrels of oil by the weekend. Kazakhstan said it was discussing measures to tackle the impact of restrictions on oil exports via the Caspian Pipeline Consortium (CPC), which ships Kazakh crude via Russia to the Black Sea. The CPC, which handles about 1% of global oil, said that a Russian court had ordered it to suspend operations for 30 days, citing issues related to oil spills. Crude oil supplies to the Caspian Pipeline Consortium (CPC) pipeline are continuing as usual, three sources familiar with operations said. CPC said a Russian court had ordered the suspension of its activity for 30 days, adding to global worries about oil supplies. Technically market is under long liquidation as market has witnessed drop in open interest by -2% to settled at 4839 while prices down -15 rupees, now Crude oil is getting support at 7510 and below same could see a test of 7254 levels, and resistance is now likely to be seen at 8047, a move above could see prices testing 8328.
Trading Ideas:
* Crude oil trading range for the day is 7254-8328.
* Crude oil dropped as a strike in the Norwegian oil and gas sector came to an end, avoiding a 341K loss of barrels of oil by the weekend.
* Renewed concerns of COVID-19 lockdowns across China could also weighed on prices gains.
* Crude oil supplies to CPC pipeline continuing as usual

Natural Gas
Nat.Gas yesterday settled up by 1.25% at 438.7 on a drop in daily output and forecasts for hotter weather and more air conditioning demand next week than previously expected. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 96.0 billion cubic feet per day (bcfd) so far in July, from 95.1 bcfd in June. That compares with a monthly record of 96.1 bcfd in December 2021. On a daily basis, however, U.S. output was on track to drop 1.8 bcfd on Wednesday to a preliminary 94.7 bcfd. That would be the biggest one-day drop since early February, but preliminary data is often revised later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 95.8 bcfd this week to 99.2 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Tuesday. Since the start of the year, the U.S. front-month was up about 52% as much higher prices in Europe and Asia fed strong demand for U.S. liquefied natural gas (LNG) exports. That is especially true since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow would cut gas supplies to Europe. Technically market is under short covering as market has witnessed drop in open interest by -1.28% to settled at 5187 while prices up 5.4 rupees, now Natural gas is getting support at 425.3 and below same could see a test of 412 levels, and resistance is now likely to be seen at 453.4, a move above could see prices testing 468.2.
Trading Ideas:
* Natural gas trading range for the day is 412-468.2.
* Natural gas climbed on a drop in daily output and forecasts for hotter weather and more air conditioning demand next week than previously expected.
* Average gas output in the U.S. Lower 48 states rose to 96.0 billion cubic feet per day (bcfd) so far in July
* On a daily basis, U.S. output was on track to drop 1.8 bcfd on Wednesday to a preliminary 94.7 bcfd.

Copper
Copper yesterday settled down by -0.94% at 645.15 weighed down by a strong U.S. dollar and threats to demand from heightened fears of a global recession and renewed lockdowns in top consumer China. The base metals complex remains pressured by macro headwinds stemming from China's COVID lockdowns and the impact of monetary policy tightening and slowing global growth on demand. Adding to growth worries, business growth across the euro zone slowed further last month, according to a survey in which forward-looking indicators suggested the region could slip into decline this quarter. China is fighting COVID-19 flare-ups on multiple fronts across the country including an emerging cluster in Shanghai, spurring mass testing drives and fresh restrictions. Central banks around the world are raising interest rates sharply to rein in soaring inflation, restraining economic growth. German industrial orders grew slightly in May after three consecutive months of decline due to the war in Ukraine, data showed. Meanwhile, copper stocks in LME-approved warehouses jumped 10,100 tonnes to 136,950 tonnes. They have risen more than 20% over the past week. The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the International Copper Study Group (ICSG) said in its latest monthly bulletin. Technically market is under long liquidation as market has witnessed drop in open interest by -11.1% to settled at 5870 while prices down -6.1 rupees, now Copper is getting support at 632.9 and below same could see a test of 620.5 levels, and resistance is now likely to be seen at 655.3, a move above could see prices testing 665.3.
Trading Ideas:
* Copper trading range for the day is 620.5-665.3.
* Copper slumped weighed down by a strong dollar and threats to demand from heightened fears of a global recession and renewed lockdowns in China.
* Adding to growth worries, business growth across the euro zone slowed further last month.
* The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the ICSG said

Zinc
Zinc yesterday settled up by 0.46% at 273.4 as China's refined zinc output stood at 490,300 mt in June, down 24,900 mt or 4.84% MoM and 17,700 mt or 3.48% YoY. From January to June 2022, the combined refined zinc output was 2.973 million mt, a decrease of 1.49% year on year. The output of domestic refined zinc decreased in June and was less than expected. The output increment was mainly brought about by a smelter in Inner Mongolia which resumed the production after maintenance. In addition, a large smelter in Hunan resumed normal production in June after a minor overhaul. Some smelters in Shaanxi and Sichuan increased the production. Therefore, the output increased. The decline in output was mainly caused by a smelter in Henan which was under maintenance. In addition, some smelters in Shaanxi and Yunnan took maintenance. Some smelters in Gansu and Qinghai were overhauled, resulting in major reductions. China's refined zinc output will increase by 6,300 mt to 496,600 mt in July, down 18,600 mt or 3.62% YoY. investors' fears deepened that the continent is leading the world into recession. In the spot market, smelters’ production dropped, resulting in less sources circulating in the market. Goods holders raised the premiums with better transaction situation today. Technically market is under short covering as market has witnessed drop in open interest by -5.56% to settled at 1596 while prices up 1.25 rupees, now Zinc is getting support at 267.6 and below same could see a test of 261.8 levels, and resistance is now likely to be seen at 278, a move above could see prices testing 282.6.
Trading Ideas:
* Zinc trading range for the day is 261.8-282.6.
* Zinc gained as China's refined zinc output stood at 490,300 mt in June, down 24,900 mt or 4.84% MoM.
* In the spot market, smelters’ production dropped, resulting in less sources circulating in the market.
* However, investors' fears deepened that the continent is leading the world into recession.

Aluminium
Aluminium yesterday settled up by 0.82% at 208.05 as China's Caixin service PMI rebounded sharply to 54.5 in June, hitting an 11-month high. The People's Bank of China conducted a 7-day reverse repurchase operation of 3 billion yuan for the second consecutive day, and the winning rate was 2.1%, the same as before. In terms of aluminium, the supply pressure has been great with steady commissioning of new capacities and resumption of existing capacities. And the operating aluminium capacity is estimated at 41 million mt. On the demand side, orders received by downstream players fell, and the transactions of aluminium ingot in the spot market were less satisfying. As such, the social inventory of aluminium ingot stopped falling. The risk of recession in the US is growing as the Federal Reserve tightens monetary policy amid stubborn inflation and Europe’s economic outlook is darkening due to soaring gas prices. Even worse, another round of massive testing in Shanghai revives concerns about the recovery of the top consumer of the red metal. the PMI in the domestic aluminium processing industry recorded 51.5 in June, a month-on-month increase of 5.7, which exceeded 50 for the first time in 2022. Technically market is under short covering as market has witnessed drop in open interest by -9.53% to settled at 2953 while prices up 1.7 rupees, now Aluminium is getting support at 205 and below same could see a test of 201.9 levels, and resistance is now likely to be seen at 210.2, a move above could see prices testing 212.3.
Trading Ideas:
* Aluminium trading range for the day is 201.9-212.3.
* Aluminium prices remained supported as China's Caixin service PMI rebounded sharply to 54.5 in June, hitting an 11-month high.
* The People's Bank of China conducted a 7-day reverse repurchase operation of 3 billion yuan for the second consecutive day
* The supply pressure has been great with steady commissioning of new capacities and resumption of existing capacities.

Mentha oil
Mentha oil yesterday settled up by 0.03% at 1021.7 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil dropped by -0.9 Rupees to end at 1130.5 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 1.53% to settled at 1195 while prices up 0.3 rupees, now Mentha oil is getting support at 1014.8 and below same could see a test of 1007.8 levels, and resistance is now likely to be seen at 1028.9, a move above could see prices testing 1036.
Trading Ideas:
* Mentha oil trading range for the day is 1007.8-1036.
* In Sambhal spot market, Mentha oil dropped  by -0.9 Rupees to end at 1130.5 Rupees per 360 kgs.
* Mentha oil gains amid low production this season and improving demand post-pandemic.
* However, upside seen limited as Synthetic Mentha supply remains uninterrupted.
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.

Turmeric
Turmeric yesterday settled down by -1.29% at 7934 amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8178.25 Rupees gained 36.65 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.41% to settled at 11750 while prices down -104 rupees, now Turmeric is getting support at 7882 and below same could see a test of 7832 levels, and resistance is now likely to be seen at 8010, a move above could see prices testing 8088.
Trading Ideas:
* Turmeric trading range for the day is 7832-8088.
* Turmeric dropped amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%.
* In Nizamabad, a major spot market in AP, the price ended at 8178.25 Rupees gained 36.65 Rupees.

Jeera
Jeera yesterday settled up by 0.53% at 21995 as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In view of the international situation of cumin seeds, all the countries of the whole world are not in a position to get cumin from a single country except India. Syria's crop is reported to have come absolutely negligible in the event of drought. Turkey has exited the international cumin market for the last 2 years. In Afghanistan, cumin has grown by 40 to 50% of the current year. Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival. China's demand for cumin is currently sporadic, with China buying 300 containers of Indian cumin in the month of June, the demand is very low at the moment. In Unjha, a key spot market in Gujarat, jeera edged up by 23.4 Rupees to end at 21989.15 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -7.38% to settled at 7413 while prices up 115 rupees, now Jeera is getting support at 21765 and below same could see a test of 21530 levels, and resistance is now likely to be seen at 22170, a move above could see prices testing 22340.
Trading Ideas:
* Jeera trading range for the day is 21530-22340.
* Jeera gained as in Gujarat and Rajasthan markets arrivals have remained low.
* Syria's crop is reported to have come absolutely negligible in the event of drought.
* Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival.
* In Unjha, a key spot market in Gujarat, jeera edged up by 23.4 Rupees to end at 21989.15 Rupees per 100 kg.

Cotton
Cotton yesterday settled up by 0.15% at 40840 after reports Cotton sowing in Gujarat fall by nearly -6% with 1,556,683 hectares against sown area of 2021 which was 1,650,463 hectares. Cotton sowing in Rajasthan witnessed a gain of 8.11% with 598.14 thousand hectares as against 553.26 thousand hectares on the same day last year. India has extended deadline to import cotton without paying import taxes until Oct. 31 from the earlier cut-off date of Sept. 30, the government said in a notification, as the sowing of the fibre crop delayed in some regions due to patchy monsoon rainfall. The world's biggest producer of the fibre had allowed duty free imports in April after local prices jumped to a record high because of a drop in the production and following rally in global prices. The United States Department of Agriculture's report showed that 37% of the cotton crop was in a good-to-excellent condition in the week ending June 26. That compares with 52% for the same period a year ago. Meanwhile, heavy rain will be possible along portions of the Texas coast later this week, the U.S. National Hurricane Center said. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. In spot market, Cotton dropped by -570 Rupees to end at 43430 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.06% to settled at 1715 while prices up 60 rupees, now Cotton is getting support at 40460 and below same could see a test of 40070 levels, and resistance is now likely to be seen at 41290, a move above could see prices testing 41730.
Trading Ideas:
* Cotton trading range for the day is 40070-41730.
* Cotton gains after reports Cotton sowing in Gujarat fall by nearly -6% to 1,556,683 hectares
* Cotton sowing in Rajasthan witnessed a gain of 8.11% with 598.14 thousand hectares
* India extends deadline for duty free cotton imports to Oct. 31
* In spot market, Cotton dropped  by -570 Rupees to end at 43430 Rupees.

- www.kediaadvisory.com

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