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Gold

Gold yesterday settled up by 0.16% at 59527 after the payrolls report showed signs of a cooling labour market in the US. Nonfarm payrolls expanded by 187K in July, less than market expectations of a 200K increase but the unemployment rate unexpectedly fell to 3.5% and wage growth slowed less than expected. Still, the dollar is on track to gain for the third straight week as strong US economic data and rising Treasury yields supported the currency. Premiums on physical gold in China hit a near five-month peak on strong retail demand in the top consumer, while a weaker rupee offset the impact of a retreat in local prices in India. Chinese dealers charged premiums of $20-$35 an ounce over global spot prices, versus $15-$22 last week. China's gold demand is expected to improve in the second half of the year due to stimulus policies aimed at boosting consumption. The China Gold Association said consumption rose more than 16% year-on-year in the first half of 2023. In India, subdued demand forced dealers to offer discounts of about $3 an ounce over official domestic prices versus $4 last week. Technically market is under short covering as the market has witnessed a drop in open interest by -1.39% to settle at 14667 while prices are up 95 rupees, now Gold is getting support at 59302 and below same could see a test of 59076 levels, and resistance is now likely to be seen at 59707, a move above could see prices testing 59886. 

Trading Ideas:  

* Gold trading range for the day is 59076-59886.

* Gold recovers after payrolls report showed signs of a cooling labour market.

* Nonfarm payrolls expanded by 187K in July, less than market expectations of a 200K increase

* Premiums on physical gold in China hit a near five-month peak on strong retail demand

Silver

Silver yesterday settled down by -0.06% at 72478 as the yield on the US 10-year Treasury note retreated almost 10bps to below 4.1% as traders digest the payrolls report. The US economy added a smaller-than-expected 187K jobs last month and wage growth did not slow as anticipated, but the unemployment rate surprisingly fell to 3.5%. The report added to signs the job market is slowly cooling. At the same time, traders continue to bet the Fed will leave the fed funds rate steady when it meets next month, and there's a smaller 25% chance of a 25bps rate hike in November. Meanwhile, the Treasury Department announced on Wednesday it plans to gradually increase the size of its auctions and will issue $103 billion of securities next week, slightly more than forecast. The day before, Fitch downgraded the US credit rating grade to AA+ from AAA, mentioning the expected fiscal deterioration over the next three years and a high and growing general government debt burden. Efforts to curb carbon emissions accelerated the development of solar panel technologies that need higher conduction needs, causing sharp upgrades in forecasts of silver demand. Solar panel companies are expected to make up 14% of global silver consumption, compared to 5% in 2014. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.47% to settle at 16062 while prices are down -44 rupees, now Silver is getting support at 71717 and below same could see a test of 70956 levels, and resistance is now likely to be seen at 73082, a move above could see prices testing 73686. 

Trading Ideas:  

* Silver trading range for the day is 70956-73686.

* Silver pared losses as US 10-year Treasury yield retreated

* The US economy added a smaller-than-expected 187K jobs last month

* Solar panel companies are expected to make up 14% of global silver consumption, compared to 5% in 2014.

Crude oil

Crude oil yesterday settled up by 1.45% at 6859 underpinned by Saudi Arabia and Russia’s announcement that they would extend voluntary supply cuts through next month. Saudi Arabia said it would extend its 1 million barrels per day production cut for another month, while Russia said it will also reduce its oil exports by 300,000 bpd in September. Elsewhere, US crude inventories fell by a record 17 million barrels last week due to increased refinery runs and strong crude exports but at 439.8 million barrels, inventories are only 1% below the five-year average for this time of the year. Global oil demand is set to grow by 2.4 million barrels per day this year, and strong demand makes the market balanced, Russian Deputy Prime Minister Alexander Novak said. Russian oil output remains steady at about 9.5 million barrels per day, he said after a meeting of the joint monitoring committee of OPEC and non-OPEC producers. "Russia is fully committed to the agreements that had been reached, and generally, within OPEC+ we are in full compliance with our obligations," Novak told. A panel meeting of the top ministers of OPEC+ has kept oil output policy unchanged. Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.77% to settle at 10143 while prices are up 98 rupees, now Crude oil is getting support at 6776 and below same could see a test of 6694 levels, and resistance is now likely to be seen at 6909, a move above could see prices testing 6960. 

Trading Ideas:  

* Crude oil trading range for the day is 6694-6960.

* Crude oil up on Saudi Arabia, Russia extending supply cuts next month.

* Saudi Arabia said it would extend its 1 million barrels per day production cut for another month

* Russia's Novak: global oil demand to grow by 2.4 mln bpd in 2023

Natural Gas

Nat.Gas yesterday settled down by -0.47% at 212.7 weighed down by forecasts for lower demand over the next two weeks than previously expected and rising output. The price drop came despite forecasts for hotter than normal weather continuing through mid-August, especially in Texas. Data provider Refinitiv said average gas output in the U.S. Lower 48 states held at 101.8 billion cubic feet per day (bcfd) so far in August, the same as in July. That compares with a monthly record of 102.2 bcfd in May. Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 19. Refinitiv forecast U.S. gas demand, including exports, would hold at 104.8 bcfd this week and next before rising to 106.9 bcfd as power generators burn more of the fuel and exports rise. Gas flows to the seven big U.S. LNG export plants fell from an average of 12.7 bcfd in July to 12.2 bcfd so far in August due mostly to a reduction at Cheniere Energy's Sabine Pass in Louisiana. That compares with a monthly record of 14.0 bcfd in April. Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.74% to settle at 39810 while prices are down -1 rupees, now Natural gas is getting support at 209.6 and below same could see a test of 206.6 levels, and resistance is now likely to be seen at 216.5, a move above could see prices testing 220.4. 

Trading Ideas:  

* Natural gas trading range for the day is 206.6-220.4.

* Natural gas dropped weighed down by forecasts for lower demand.

* The price drop came despite forecasts for hotter than normal weather continuing through mid-August, especially in Texas.

* Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 19.

Copper

Copper yesterday settled down by -0.82% at 740.15 amid apprehensions about reduced demand in China. These factors countered the mounting pressures on supply. PMI data from China continued to reveal contractionary patterns in both the construction and manufacturing sectors, underscoring the ongoing struggle of the economy to rebound from prolonged Covid-related lockdowns. This situation raised concerns about the sufficiency of governmental economic support to significantly bolster industrial activity. Nevertheless, the downturn was contained due to worries that diminished supply could align with elevated demand for copper-intensive sustainable infrastructure in the forthcoming years, potentially leading to widespread shortages. Chile's state-owned mining company, Codelco, adjusted its output projections downward by 70,000 tonnes to a range of 1.31-1.35 million tonnes for the current year. This revision was attributed to explosions and delays in key mines. The adjustment followed a report indicating that Codelco's production had plummeted by 14% in the first half of 2023. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 14.9 % from last Friday, the exchange said. Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.14% to settle at 5147 while prices are down -6.1 rupees, now Copper is getting support at 735.5 and below same could see a test of 730.7 levels, and resistance is now likely to be seen at 745.8, a move above could see prices testing 751.3. 

Trading Ideas:  

* Copper trading range for the day is 730.7-751.3.

* Copper dropped amid China demand concerns

* PMI data from China continued to reveal contractionary patterns in both the construction and manufacturing sectors

* Shanghai warehouse copper stocks down 14.9%

Zinc

Zinc yesterday settled up by 0.34% at 224.25 as China’s government promised to consolidate the stabilization and recovery of the real estate market and boost the real estate industry. The World Bank have raised their expectations for China's economy growth this year. Chinese Foreign Minister Wang Yi expressed willingness to strengthen strategic cooperation with Turkey. U.S. Treasury Department officials said they would take "targeted" actions against China, but emphasized that it was not decoupling. New U.S. single-family home sales slipped in June after three straight months of gains, but the trend remained strong as a severe shortage of existing homes underpinned demand. 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. During the first five months of 2023, ILZSG data showed a surplus of 267,000 metric tons, versus a surplus of 189,000 tons in the same period of 2022. Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.32% to settle at 3642 while prices are up 0.75 rupees, now Zinc is getting support at 222.5 and below same could see a test of 220.7 levels, and resistance is now likely to be seen at 225.3, a move above could see prices testing 226.3. 

Trading Ideas:  

* Zinc trading range for the day is 220.7-226.3.

* Zinc gains as China’s government promised to the stabilization of economy.

* The World Bank have raised their expectations for China's economy growth this year.

* The global zinc market surplus slipped to 53,000 metric tons in May, down from 64,000 tons a month earlier

Aluminium

Aluminium yesterday settled up by 0.27% at 202.25 as China’s favorable policies have promoted real estate, automobile, and other related consumption to gradually pick up. However, the resumption of aluminium production in Yunnan is speeding up, and it is expected that some large smelters in the region will be able to produce at full capacity by the end of August, potentially fueling the total domestic operating capacity to a record high. At present, the amount of resumed production is mainly liquid aluminum, and there is no large aluminum ingot oversupply pressure. 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. Aluminium stocks at three major Japanese ports were at 357,490 metric tons at the end of June, according to Marubeni, above the 250,000-300,000 tons that are considered appropriate. Japan's imports of aluminium ingot in January-June fell by 32% from a year earlier, with those from Russia plunging by 59%, the trade data shows. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.68% to settle at 3515 while prices are up 0.55 rupees, now Aluminium is getting support at 200.8 and below same could see a test of 199.2 levels, and resistance is now likely to be seen at 203.2, a move above could see prices testing 204. 

Trading Ideas:  

* Aluminium trading range for the day is 199.2-204.

* Aluminium gains as China’s policies promote real estate, automobile to pick up.

* However, the resumption of aluminium production in Yunnan is speeding up

* Japan buyers agree to pay Q3 aluminium premium of $127.5/T

Mentha oil
Mentha oil yesterday settled up by 0.67% at 877.9 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. In Sambhal spot market, Mentha oil dropped by -5.1 Rupees to end at 1024.8 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -0.22% to settle at 916 while prices are up 5.8 rupees, now Mentha oil is getting support at 872.6 and below same could see a test of 867.4 levels, and resistance is now likely to be seen at 881.4, a move above could see prices testing 885. 

Trading Ideas:  

* Mentha oil trading range for the day is 867.4-885.

* In Sambhal spot market, Mentha oil dropped  by -5.1 Rupees to end at 1024.8 Rupees per 360 kgs.

* 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

Turmeric yesterday settled down by -5.07% at 16312 on profit booking as the recent surge is linked to prevailing weather conditions. 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 14234.35 Rupees gained 167.6 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.18% to settle at 10970 while prices are down -872 rupees, now Turmeric is getting support at 15620 and below same could see a test of 14926 levels, and resistance is now likely to be seen at 17542, a move above could see prices testing 18770. 

Trading Ideas:  

* Turmeric trading range for the day is 14926-18770.

* Turmeric dropped on profit booking after prices above 16500 level

* 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 14234.35 Rupees gained 167.6 Rupees.

Jeera

Jeera yesterday settled up by 1.32% at 63400 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 516.25 Rupees to end at 62183.7 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by % to settle at while prices are up 825 rupees, now Jeera is getting support at 62800 and below same could see a test of 62200 levels, and resistance is now likely to be seen at 64000, a move above could see prices testing 64600. 

Trading Ideas:  

* Jeera trading range for the day is 62200-64600.

* Jeera prices gains 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 516.25 Rupees to end at 62183.7 Rupees per 100 kg.

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