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Gold

Gold yesterday settled up by 0.22% at 55864 as the dollar slipped on bets for slower U.S. interest rate hikes, while investors also cheered top bullion China reopening its borders. Investors have also started slowly increasing their holdings in exchange-traded funds (ETFs), indicating positive sentiment in gold. Traders will now assess Fed Chair Jerome Powell's speech at a central bank conference in Stockholm on Tuesday and U.S. consumer price index data due later this week. China held 64.64 million fine troy ounces of gold, as of end-December. US nonfarm payrolls rose by 223,000 jobs in December, posting slightly above expectations but a 0.3% rise in average earnings was smaller than projected and slowed from a 0.4% increase in November. ISM data also showed that US services sector activity unexpectedly contracted in December at the steepest pace in 2-½ years amid weakening demand. Meanwhile, minutes of the FOMC's December meeting showed that policymakers committed to pushing rates higher and holding them at a restrictive level until there were clear signs that inflation was easing. Retail gold buying in major Asian hubs was slow on higher prices at the start of the week, while demand was seen picking up in top consumer China on the back of reopening and upcoming Lunar New Year festival. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.75% to settle at 13059 while prices are up 121 rupees, now Gold is getting support at 55717 and below same could see a test of 55571 levels, and resistance is now likely to be seen at 56092, a move above could see prices testing 56321.

Trading Ideas:

* Gold trading range for the day is 55571-56321.
* Gold rose as the dollar slipped on bets for slower U.S. interest rate hikes, while investors also cheered top bullion China reopening its borders.
* Investors have also started slowly increasing their holdings in ETFs, indicating positive sentiment in gold
* Cenbank buying new focus area for gold


Silver

Silver yesterday settled down by -0.37% at 68900 on profit booking after prices rose as the dollar weakened as data showing a contraction in U.S. services industry activity for the first time in more than 2-1/2 years and signs of cooling wage growth raised hopes for a change to aggressive Fed policy. Kansas City Federal Reserve's Esther George warned that officials will have a tough road ahead as they attempt to stamp out runaway inflation without hurting growth. Signs of market tightness backed hawkish stances by the Fed, strengthening the dollar and driving investors out of non-interest-bearing bullion assets. In addition, indices tracking equity of solar energy companies booked sharp declines to start the year, pressing the major input silver. Still, looming supply concerns drove silver to outperform gold and palladium in 2022. COMEX inventories fell nearly 70% in the last 18 months to just over 1 million tonnes, and London Bullion Market Association stockpiles fell sharply amid outflows to India. Market participants now await Fed Chair Jerome Powell's speech at a central bank conference in Stockholm on Tuesday and the U.S. December inflation report due on Thursday for additional clues on the rate outlook. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.33% to settle at 19793 while prices are down -255 rupees, now Silver is getting support at 68515 and below same could see a test of 68129 levels, and resistance is now likely to be seen at 69561, a move above could see prices testing 70221.

Trading Ideas:

* Silver trading range for the day is 68129-70221.
* Silver pared gains on profit booking after prices rose after data showed contraction in U.S. services industry activity in more than 2-1/2 years
* Fed’s George warned that officials will have a tough road ahead as they attempt to stamp out runaway inflation without hurting growth.
* COMEX inventories fell nearly 70% in the last 18 months to just over 1 million tonnes


Crude oil

Crude oil yesterday settled up by 0.7% at 6192 after China's move to reopen its borders boosted the outlook for fuel demand and overshadowed global recession concerns. The rally was part of a wider boost for risk sentiment supported by both the reopening of the world's biggest crude importer and hopes for less-aggressive increases to U.S. interest rates, with equities rising and the dollar weakening. OPEC crude production rose in December, led by a recovery in Nigerian supply, despite the cartel's agreement to cut output to support the market. U.S. total product supplied of petroleum products fell by a record 4.6 million barrels per day (bpd) last week to 18.2 million bpd, the lowest since June 2021, according to U.S. Energy Information Administration (EIA) data going back to 1990. U.S. crude oil inventories rose more than expected last week, while fuel stockpiles fell, the Energy Information Administration (EIA) said. Crude inventories rose 1.7 million barrels in the week to Dec. 30, compared with expectations in a poll for a 1.2 million-barrel rise. Crude stocks at the Cushing, Oklahoma, delivery hub rose 244,000 barrels. Refinery crude runs fell 2.33 million barrels per day (bpd). Technically market is under short covering as the market has witnessed a drop in open interest by -1.93% to settle at 10252 while prices are up 43 rupees, now Crude oil is getting support at 6124 and below same could see a test of 6056 levels, and resistance is now likely to be seen at 6294, a move above could see prices testing 6396.

Trading Ideas:

* Crude oil trading range for the day is 6056-6396.
* Crude oil jumps on demand optimism as China borders reopen
* China reopens borders in final farewell to zero-COVID
* Hopes of slower U.S. interest rate hikes boost risk sentiment


Natural gas

Nat.Gas yesterday settled up by 7.09% at 339.8 with a jump in oil futures and forecasts for slightly more heating demand next week than previously expected. Gas speculators last week boosted their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges for a third week in a row to their highest since October 2022, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Traders said the market's biggest uncertainty remains when Freeport LNG will restart its liquefied natural gas (LNG) export plant in Texas. After several delays from October to November and then to December, Freeport now expects the facility to return in the second half of January, pending regulatory approvals. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.3 bcfd so far in January, up from 96.7 bcfd in December. That compares with a monthly record of 99.9 bcfd in November 2022. With the weather expected to remain warmer-than-normal through late January, Refinitiv projected average U.S. gas demand, including exports, would ease from 121.2 bcfd this week to 120.7 bcfd next week. The forecast for this week was lower than Refinitiv's outlook on Friday, while its forecast for next week was higher. Technically market is under short covering as the market has witnessed a drop in open interest by -12.46% to settle at 22939 while prices are up 22.5 rupees, now Natural gas is getting support at 323.4 and below same could see a test of 306.9 levels, and resistance is now likely to be seen at 349.5, a move above could see prices testing 359.1.

Trading Ideas:

* Natural gas trading range for the day is 306.9-359.1.
* Natural gas rose with a jump in oil futures and forecasts for slightly more heating demand next week than previously expected.
* The market's biggest uncertainty remains when Freeport LNG will restart its liquefied natural gas (LNG) export plant in Texas.
* Gas speculators last week boosted their net short futures and options positions for a third week in a row to their highest since October 2022.

Copper

Copper yesterday settled up by 2.43% at 751.6 supported by expectations of stronger demand and looming supply concerns. As pledged, Chinese authorities reopened mainland borders with Hong Kong and relaxed quarantine for incoming travelers, further moving away from its strict zero Covid policy and raising expectations of higher economic activity and demand for industrial inputs in the world’s top consumer. On the supply side, production in top producer Chile fell nearly 7% year-on-year in November. Commodity trader Trafigura warned that global copper stocks have fallen to record lows, with current inventories being enough to supply world consumption for just 4.9 days. Also, mining giant Glencore estimated a supply shortfall of 50 million tonnes in 2023. 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 16.51% to settle at 5096 while prices are up 17.8 rupees, now Copper is getting support at 743.8 and below same could see a test of 735.9 levels, and resistance is now likely to be seen at 757, a move above could see prices testing 762.3.

Trading Ideas:

* Copper trading range for the day is 735.9-762.3.
* Copper prices rallied supported by expectations of stronger demand and looming supply concerns.
* Chinese authorities reopened mainland borders with Hong Kong and relaxed quarantine, further moving away from its strict zero Covid policy.
* On the supply side, production in top producer Chile fell nearly 7% year-on-year in November.

Zinc

Zinc yesterday settled up by 3.58% at 280.8 as China’s continued reopening bolstered the economic outlook. Guo Shuqing, party secretary of the People’s Bank of China, said that China’s economic growth will quickly rebound and return to its “normal” path as the government provides more financial support to households and private companies to help them recover from the Covid-induced slump. In the latest developments, Beijing opened sea and land crossings with Hong Kong and ended a requirement for incoming travelers to quarantine, symbolizing an end to the strict zero-Covid policy that weighed on the economy. The yuan also benefited from a general dollar weakness as softer-than-expected US data tempered expectations that the Federal Reserve will continue to raise interest rates aggressively. The domestic refined zinc output in January, 2023 will shed 21,100 mt to 504,600 mt, down 12,900 mt or 2.5% from the previous year. Compared with the reduction in output during the Chinese New Year holiday in recent years, the decline in 2023 will be smaller. The main reason is that smelters are active in production for high profits, which suggests that the logic holds true that the domestic zinc ore surplus will translate to increased output in smelters. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.47% to settle at 1934 while prices are up 9.7 rupees, now Zinc is getting support at 273.8 and below same could see a test of 266.8 levels, and resistance is now likely to be seen at 286.8, a move above could see prices testing 292.8.

Trading Ideas:

* Zinc trading range for the day is 266.8-292.8.
* Zinc prices gained as China’s continued reopening bolstered the economic outlook.
* China’s economic growth will quickly rebound and return to its “normal” path as the government provides more financial support to households
* Support also seen after softer-than-expected US data tempered expectations that the Federal Reserve will continue to raise interest rates aggressively.



Aluminium

Aluminium yesterday settled up by 3% at 210.95 amid optimism over demand after top consumer China reopened its borders. After three years, mainland China opened sea and land crossings with Hong Kong and ended a requirement for incoming travellers to quarantine, dismantling a final pillar of a zero-COVID policy. China produced 3.44 million mt of aluminium in December 2022 (31 calendar days), up 8.3% on the year. The daily output dropped 261 mt/day on the month to 110,900 mt. The output totalled 40.08 million mt from January to December 2022, an increase of 4.1% on the year. The domestic operating capacity of aluminium in December declined slightly month-on-month as the aluminium plants in Guizhou were forced to stop the production for two times amid the electricity shortage in late December, which led to an output cut of 450,000 mt. However, considering the suspension time and preparation works, the impact of production cuts in Guizhou was limited. Meanwhile, a aluminium company in Shandong planned to transfer part of its production capacity, hence its output declined about 60,000 mt. The power rationing in south-west China dragged down the domestic operating aluminium capacity. The increase in the aluminium supply in December may be less than expected as the power shortage extended in Guizhou. Technically market is under fresh buying as the market has witnessed a gain in open interest by 29.98% to settle at 4531 while prices are up 6.15 rupees, now Aluminium is getting support at 207.1 and below same could see a test of 203.3 levels, and resistance is now likely to be seen at 213.3, a move above could see prices testing 215.7.

Trading Ideas:

* Aluminium trading range for the day is 203.3-215.7.
* Aluminum prices rose amid optimism over demand after top consumer China reopened its borders.
* China produced 3.44 million mt of aluminium in December 2022, up 8.3% on the year.
* The power rationing in south-west China dragged down the domestic operating aluminium capacity.


Mentha oil

Mentha oil yesterday settled up by 1.75% at 1074.8 on improving export demand especially from China. 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 gained by 9.9 Rupees to end at 1203 Rupees per 360 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.46% to settle at 1018 while prices are up 18.5 rupees, now Mentha oil is getting support at 1064.1 and below same could see a test of 1053.3 levels, and resistance is now likely to be seen at 1081.8, a move above could see prices testing 1088.7.

Trading Ideas:

* Mentha oil trading range for the day is 1053.3-1088.7.
* In Sambhal spot market, Mentha oil gained  by 9.9 Rupees to end at 1203 Rupees per 360 kgs.
* Mentha oil prices gained on improving export demand especially from China.
* 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 up by 1.74% at 7964 on low level buying after prices dropped on an “unexpected” slump in domestic and export demand. Turmeric production in the 2021-22 crop year (June-July) has been projected at 13.31 lakh tonnes against 11.24 lakh tonnes the previous year with the area increasing to 3.5 lakh hectares from 2.93 lakh hectares. In the first advance estimate, the crop was pegged at 11.76 lakh tonnes. 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 7368 Rupees gained 32.85 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -2.01% to settle at 12445 while prices are up 136 rupees, now Turmeric is getting support at 7878 and below same could see a test of 7790 levels, and resistance is now likely to be seen at 8016, a move above could see prices testing 8066.

Trading Ideas:

* Turmeric trading range for the day is 7790-8066.
* Turmeric gained on low level buying after prices dropped on an “unexpected” slump in domestic and export demand.
* Turmeric production in the 2021-22 crop year (June-July) has been projected at 13.31 lakh tonnes against 11.24 lakh tonnes the previous 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 7368 Rupees gained 32.85 Rupees.

Jeera

Jeera yesterday settled up by 4.57% at 37085 amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties. Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected. Sowing In Gujarat, dropped by nearly -8% with 274,995.00 hectares against sown area of 2021 which was 300,401.00 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 1758.85 Rupees to end at 35141.45 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -5.01% to settle at 3864 while prices are up 1620 rupees, now Jeera is getting support at 36555 and below same could see a test of 36030 levels, and resistance is now likely to be seen at 37550, a move above could see prices testing 38020.

Trading Ideas:

* Jeera trading range for the day is 36030-38020.
* Jeera prices rose above 34000 level amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties.
* Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected.
* Sowing in Gujarat, dropped by nearly -8% with 274,995.00 hectares against sown area of 2021 which was 300,401.00 hectares.
* In Unjha, a key spot market in Gujarat, jeera edged up by 1758.85 Rupees to end at 35141.45 Rupees per 100 kg.

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