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Gold

Gold yesterday settled up by 0.19% at 54677 as fears of inflation becoming entrenched forced the Federal Reserve to raise interest rates rapidly. The yield on the 10-year US Treasury note rose above the 3.7% mark, the highest in over three weeks as recent economic data releases backed the aggressively hawkish decisions and guidances by the Fed and other major central banks. The US economy expanded by 3.2% quarter-on-quarter in the three months leading to September of 2022, above earlier estimates of 2.9% and pointing to slightly better resilience since the Fed started its tightening cycle in March. Physical gold buyers in Japan took advantage of a dip in domestic prices following a surprise policy tweak by the central bank, while demand outlook in top consumer China was overshadowed by a flare-up in COVID-19 infections. Dealers charged a premium of $0.50 an ounce in Tokyo, while premiums in China dipped to $8-16 range over global benchmark spot prices from last week's $10-20. In India, gold discounts widened to the highest level in nearly six months as demand plunged. Dealers were offering a discount of up to $30 an ounce over official domestic prices, up from the last week's discount of $25. Technically market is under short covering as the market has witnessed a drop in open interest by -0.41% to settle at 13712 while prices are up 103 rupees, now Gold is getting support at 54548 and below same could see a test of 54420 levels, and resistance is now likely to be seen at 54776, a move above could see prices testing 54876.
Trading Ideas:
* Gold trading range for the day is 54420-54876.
* Gold steadied as fears of inflation becoming entrenched forced the Federal Reserve to raise interest rates rapidly.
* Recent economic data releases backed the aggressively hawkish decisions and guidances by the Fed and other major central banks.
* India discounts highest in a nearly six months at $30


Silver

Silver yesterday settled up by 0.06% at 69075 supported by a lower dollar and looming supply concerns. Stronger-than-expected US data reinforced the Federal Reserve’s case to raise interest rates further and keep them higher for longer. The personal consumption expenditure price index in the United States increased by 5.5% year-on-year in November of 2022, the least since October of 2021 and below 6.1% in October. Personal spending in the US edged up a meagre 0.1% month-over-month in November of 2022, following an upwardly revised 0.9% jump in October and below market forecasts of 0.2%, as consumer spending cooled during the holiday season. Core PCE prices in the US, which exclude food and energy, went up by 0.2% month-over-month in November of 2022, following an upwardly revised 0.3% increase in the prior month, matching market estimates. Durable goods orders in the US, which measure the cost of orders received by manufacturers of goods meant to last at least three years, fell by 2.1% month-over-month in November 2022. Shortage fears also supported prices, as New York’s COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes. Also, the London Bullion Market Association stockpiles fell for the 10th straight month to a record-low 27.1 thousand tonnes in November. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.92% to settle at 22102 while prices are up 42 rupees, now Silver is getting support at 68435 and below same could see a test of 67795 levels, and resistance is now likely to be seen at 69481, a move above could see prices testing 69887.
Trading Ideas:
* Silver trading range for the day is 67795-69887.
* Silver steadied supported by a lower dollar and looming supply concerns.
* The personal consumption expenditure price index in the United States increased by 5.5% year-on-year in November of 2022.
* Durable goods orders in the US, fell by 2.1% month-over-month in November 2022.


Crude oil

Crude oil yesterday settled up by 0.47% at 6652 on expectations of a drop in Russian crude supply, which helped offset worries of a hit to U.S. transport fuel demand growth as a looming Arctic storm threatens travel during the holiday season. Russia's Baltic oil exports could fall by 20% in December from the previous month after the European Union and G7 nations imposed sanctions and a price cap on Russian crude from Dec. 5. Russia may cut oil output by 5%-7% in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying. U.S. crude stocks fell more than expected in the week to Dec. 16 as imports dropped sharply. Crude inventories fell by 5.9 million barrels in the week to Dec. 16 to 418.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 853,000 barrels in the last week, EIA said. However, surging COVID-19 cases in the world's No.2 oil consumer China, concerns about further rate hikes globally and recession curbing fuel consumption limited oil's price gains. U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped 3.6 million barrels last week to 378.6 million barrels, its lowest since December 1983, the U.S. Energy Information Administration (EIA) said. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.93% to settle at 6959 while prices are up 31 rupees, now Crude oil is getting support at 6604 and below same could see a test of 6556 levels, and resistance is now likely to be seen at 6706, a move above could see prices testing 6760.
Trading Ideas:
* Crude oil trading range for the day is 6556-6760.
* Crude oil prices rose on expectations of a drop in Russian crude supply
* Russia may cut oil output by 5%-7% in early 2023 as it responds to price caps, Deputy Prime Minister Alexander Novak said.
* U.S. storm seen hitting transport demand, but boosting heating oil usage


Natural gas

Nat.Gas yesterday settled up by 1.92% at 434.8 as extreme cold this week boosted spot power and gas prices to their highest in years across much of the country and cut gas output to a nine-month low by freezing oil and gas wells in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere. Gas stockpiles are currently about 0.4% below the five-year (2017-2021) average for this time of year. U.S. and Canadian natural gas production is expected to hit new records in 2023, but growth may be slow due to weakened demand, pipeline bottlenecks and a lack of new liquefied natural gas (LNG) export plants. Gas demand surged worldwide after Russia cut off Europe's primary supply, and the United States and Canada are expected to feed copious demand for exports in coming years, bolstered by high prices. The two countries produced a record combined 116 billion cubic feet per day (bcfd) in 2022. Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas. Small amounts of gas started to flow to Freeport for the first time since August and continued to flow on Wednesday, according to data provider Refinitiv. Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.44% to settle at 16218 while prices are up 8.2 rupees, now Natural gas is getting support at 420.6 and below same could see a test of 406.5 levels, and resistance is now likely to be seen at 443.4, a move above could see prices testing 452.1.
Trading Ideas:
* Natural gas trading range for the day is 406.5-452.1.
* Natural gas gains as extreme cold boosted spot power and gas prices to their highest in years across much of the country
* U.S, Canada natgas output could hit growing pains in 2023
* Gas stockpiles are currently about 0.4% below the five-year (2017-2021) average for this time of year.



Copper

Copper yesterday settled up by 1.6% at 724.05 as low inventories and hopes for economic recovery next year offset a slackening in near-term demand in China caused by a surge in COVID-19 cases. Stockpiles in Shanghai Futures Exchange (ShFE) warehouses fell by 9,472 tonnes to 54,569 tonnes in the week to Friday. While a series of policy measures and hopes of better industrial activities due to a pivot from China's stringent COVID policies supported prices, a huge spike in infections in the country have equally weighed on the metals market. The tight copper market will also be reversed, according to CITIC Futures, forecasting a market surplus of 420,000 tonnes next year. The world's refined copper market saw a 46,000 tonne surplus in October, compared with a deficit of 85,000 tonnes in September, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in October was 2.2 million tonnes, while consumption was 2.16 million tonnes. For the first ten months of the year, the market was in a 307,000 tonne deficit compared with a 271,000 tonne deficit in the same period a year earlier, the ICSG said. Technically market is under fresh buying as the market has witnessed a gain in open interest by 4.57% to settle at 4435 while prices are up 11.4 rupees, now Copper is getting support at 713.6 and below same could see a test of 703.2 levels, and resistance is now likely to be seen at 731.7, a move above could see prices testing 739.4.
Trading Ideas:
* Copper trading range for the day is 703.2-739.4.
* Copper prices edged higher as low inventories and hopes for economic recovery next year
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 14.8% from last Friday.
* China expects a peak in COVID-19 infections within a week, as authorities predict extra strain on the health system and the virus ripples though business.


Zinc

Zinc yesterday settled up by 0.13% at 269.65 as inventories in ShFE and LME warehouses at 18,173 tonnes and 36,350 tonnes respectively slumped to their lowest on record. A bottleneck in smelting should ease, flipping the market from a 220,000 tonne deficit this year to a small surplus in 2023. Tight zinc supply from European smelters and concern over low global inventory levels will in the short term offer some support. China expects a peak in COVID-19 infections within a week, a health official said, as authorities predict extra strain on the health system and the virus ripples though business. The global zinc market deficit eased to 72,400 tonnes in October from a revised deficit of 99,900 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 103,000 tonnes in September. During the first 10 months of 2022, ILZSG data showed a deficit of 117,000 tonnes versus a deficit of 125,000 tonnes in the same period of 2021. The People’s Bank of China (PBOC) injected a net of CNY 704 billion into the banking system this week, the largest weekly injection since late October. Technically market is under fresh buying as the market has witnessed a gain in open interest by 18.42% to settle at 1999 while prices are up 0.35 rupees, now Zinc is getting support at 268.5 and below same could see a test of 267.3 levels, and resistance is now likely to be seen at 271.1, a move above could see prices testing 272.5.
Trading Ideas:
* Zinc trading range for the day is 267.3-272.5.
* Zinc prices rose as inventories in ShFE and LME warehouses at 18,173 tonnes and 36,350 tonnes respectively slumped to their lowest on record.
* A bottleneck in smelting should ease, flipping the market from a 220,000 tonne deficit this year to a small surplus in 2023.
* Tight zinc supply from European smelters and concern over low global inventory levels will in the short term offer some support.



Aluminium

Aluminium yesterday settled up by 0.26% at 208.8 amid sharp fall in inventories available on the London Metal Exchange (LME), but rising COVID cases in China and expectations of surplus supply next year limited gains. On the fundamentals, the supply side was still weighed on by the power rationing in south-west China, and the aluminium ingot in December is more than likely to fall short. In addition, the downstream processing industry has entered the seasonal low, featuring weak downstream consumption. According to the General Administration of Customs, Chinese primary aluminium imports totalled 110,700 mt in November, up 64.1% MoM but down 51.7% YoY. The exports stood at 2,397 mt, up 272.3% MoM and 299.5% YoY. The People’s Bank of China (PBOC) injected a net of CNY 704 billion into the banking system this week, the largest weekly injection since late October. Aluminium ingot social inventory stood at 475,000 mt as of Thursday December 22, down 7,000 mt from a week ago and down 41,000 mt from the end of November. It was down 416,000 mt from the same period last year. Aluminium billet social inventory recorded 57,600 mt as of Thursday December 22, down 3,800 mt from a week ago which was largely contributed by Foshan. Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.63% to settle at 3827 while prices are up 0.55 rupees, now Aluminium is getting support at 207.8 and below same could see a test of 206.6 levels, and resistance is now likely to be seen at 209.7, a move above could see prices testing 210.4.
Trading Ideas:
* Aluminium trading range for the day is 206.6-210.4.
* Aluminium gained amid sharp fall in inventories available on the LME
* The supply side was still weighed on by the power rationing in south-west China.
* Chinese primary aluminium imports totalled 110,700 mt in November, up 64.1% MoM but down 51.7% YoY.


Mentha oil

Mentha oil yesterday settled down by -0.79% at 989.6 as the group of ministers’ (GoM’s) has given its views on bringing mentha oil, one of the key ingredients in pan masala, under the reverse charge mechanism. Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes as compared to 1,564.12 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 141.82 tonnes Mentha was exported as against 220.67 tonnes in September 2022 showing a drop of 35.73%. In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021 showing a drop of 49.17%. 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 Sambhal spot market, Mentha oil dropped by -1.7 Rupees to end at 1140.1 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.4% to settle at 850 while prices are down -7.9 rupees, now Mentha oil is getting support at 979.9 and below same could see a test of 970.1 levels, and resistance is now likely to be seen at 996.7, a move above could see prices testing 1003.7.
Trading Ideas:
* Mentha oil trading range for the day is 982.9-1012.5.
* In Sambhal spot market, Mentha oil dropped  by -1.7 Rupees to end at 1140.1 Rupees per 360 kgs.
* Mentha oil prices gained as GoM’s has given its views on bringing mentha oil, under the reverse charge mechanism.
* Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes.
* In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021


Turmeric

Turmeric yesterday settled down by -1.51% at 8464 on profit booking after prices gained as amid buying activities has increased amid weaker production for upcoming season. Not only weaker production, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh will also help prices to trade on positive note. 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. Turmeric exports during Apr- Oct 2022 has rose by 11.09 percent at 99,569.88 tonnes as compared to 89,626.39 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 11,178.11 tonnes turmeric was exported as against 13,990.65 tonnes in September 2022 showing a fall of 20.10%. In the month of October 2022 around 11,178.11 tonnes of turmeric was exported as against 12,534.87 tonnes in October 2021 showing a fall of 10.82%. 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 7459.15 Rupees gained 39.4 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.2% to settle at 9915 while prices are down -130 rupees, now Turmeric is getting support at 8368 and below same could see a test of 8270 levels, and resistance is now likely to be seen at 8626, a move above could see prices testing 8786.
Trading Ideas:
* Turmeric trading range for the day is 8170-8586.
* Turmeric dropped on profit booking after prices gained as buying activities has increased amid weaker production for upcoming season.
* However, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh limited downside
* 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 7459.15 Rupees gained 39.4 Rupees.


Jeera

Jeera yesterday settled up by 2.4% at 30080 on profit booking after prices gained as sowing In Gujarat, dropped by nearly -6% with 268,775.00 hectares against sown area of 2021 which was 286,514.00 hectares. Prices gained to all time high amid higher demand for the fresh crop and supply tightness in the physical market. Good demand expected from China in December-January and Ramzan demand during January-February from gulf & other countries. Jeera exports during Apr- Oct 2022 has dropped by 18.92 percent at 1,22,015.13 tonnes as compared to 1,50,479.11 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 12,427.86 tonnes jeera was exported as against 18,081.78 tonnes in September 2022 showing a drop of 31.27%. In the month of October 2022 around 12,427.86 tonnes of jeera was exported as against 11,260.72 tonnes in October 2021 showing a rise of 10.36%. 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 878 Rupees to end at 29055.9 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.4% to settle at 6723 while prices are up 705 rupees, now Jeera is getting support at 29460 and below same could see a test of 28845 levels, and resistance is now likely to be seen at 30540, a move above could see prices testing 31005.
Trading Ideas:
* Jeera trading range for the day is 28770-30800.
* Jeera dropped on profit booking after prices gained as sowing in Gujarat, dropped by nearly -6% to 268,775 hectares
* Support also seen amid higher demand for the fresh crop and supply tightness.
* 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 878 Rupees to end at 29055.9 Rupees per 100 kg.

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