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Gold

Gold yesterday settled up by 0.33% at 55875 benefitting from a softer dollar, as investors expect the Fed to slow the pace of rate increases after the US CPI report pointed to another slowdown in inflationary pressures. The annual inflation rate in the US cooled for a sixth straight month to 6.5% in December, the lowest since October of 2021, and matching market expectations. Month over month, the CPI declined by 0.1%, beating forecasts of a flat reading as a decrease in gasoline prices more than offset a rise in the cost of shelter. In Europe meanwhile, preliminary estimates showed price pressures eased more than expected, with the annual inflation rate in the Eurozone hitting a four-month low. At the same time, and ECB survey of consumer expectations showed inflation prospects over the next 12 months eased for the first time since May 2022. India's gold imports in December plunged 79% from a year earlier to the lowest level in at least two decades for the month as a rally in local prices near record high dampened demand. Lower imports by the world's second-biggest consumer of the precious metal could limit gains in global prices trading near their highest in eight months. Technically market is under short covering as the market has witnessed a drop in open interest by -0.18% to settle at 12011 while prices are up 182 rupees, now Gold is getting support at 55660 and below same could see a test of 55445 levels, and resistance is now likely to be seen at 56040, a move above could see prices testing 56205.
Trading Ideas:
* Gold trading range for the day is 55445-56205.
* Gold prices rose benefitting from a softer dollar, as investors expect the Fed to slow the pace of rate increases
* US inflation rate slows to 6.5%
* India's Dec gold imports plunge 79%; fall by over a third in 2022

Silver

Silver yesterday settled up by 0.99% at 68643 as the dollar continued to fall and Treasury yields retreated as investors digest the latest CPI report for the US. The annual inflation rate slowed as expected to the lowest since October of 2021 and the headline CPI fell for the first time since May of 2020, led by a drop in energy costs. Meanwhile, a drumbeat of Fed officials reiterated their hawkish stance this week, with Fed Chair Jerome Powell saying that “restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.” Recently, San Francisco Fed president Mary Daly noted that she expects interest rates to rise beyond 5% in 2023. Her Atlanta counterpart Raphael Bostic echoed a similar view by saying that policymakers should hike above 5% by early in the second quarter and hold rates there for a long time. Consistent with the central bank’s perception of a tight labor market, initial unemployment claims unexpectedly fell to a three-month low on the week ending January 6th. The number of Americans filing new claims for unemployment benefits fell by 1,000 to 205,000 on the week ending January 7th, well below expectations of 215,000. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.58% to settle at 19041 while prices are up 670 rupees, now Silver is getting support at 68023 and below same could see a test of 67402 levels, and resistance is now likely to be seen at 69266, a move above could see prices testing 69888.
Trading Ideas:
* Silver trading range for the day is 67402-69888.
* Silver rose as the dollar continued to fall and Treasury yields retreated as investors digest the latest CPI report for the US.
* The annual inflation rate slowed as expected to the lowest since October of 2021 and the headline CPI fell for the first time since May of 2020
* Fed’s Daly noted that she expects interest rates to rise beyond 5% in 2023.

Crude Oil

Crude oil yesterday settled up by 0.96% at 6391 amid optimism over improvement in Chinese demand and the prospect of softening inflationary pressures. Concerns about the impact of sanctions on Russian supply also lent optimism to bulls, as European Union curbs aimed at Russian fuel product sales are due to take effect in February. Keeping a lid on prices were persistent fears of a recession-driven demand downturn in the US and Europe triggered by an aggressive tightening campaign from major central banks. The U.S. Energy Information Administration raised its forecast for this year's crude output and petroleum consumption growth, projecting even higher growth in 2024. The EIA projected that crude oil production would rise by 550,000 bpd to 12.41 million barrels in 2023, compared with its previous estimate of a 470,000 bpd rise. U.S. investment bank Goldman Sachs expects Brent crude to trade at $105 per barrel by the fourth quarter of 2023, driven by a recovery in China and strengthening global demand. U.S. crude stocks built unexpectedly last week, the Energy Information Administration said, as refiners were slow to restore production after a cold freeze that shut operations. Crude inventories rose by 19 million barrels in the week ended Jan. 6 to 439.6 million barrels. Technically market is under short covering as the market has witnessed a drop in open interest by -14.39% to settle at 5657 while prices are up 61 rupees, now Crude oil is getting support at 6316 and below same could see a test of 6242 levels, and resistance is now likely to be seen at 6453, a move above could see prices testing 6516.
Trading Ideas:
* Crude oil trading range for the day is 6242-6516.
* Crude oil rose amid optimism over improvement in Chinese demand and the prospect of softening inflationary pressures.
* China reopening leads to optimism demand will rise
* Looming EU ban on Russian oil products imports in focus

Natural Gas

Nat.Gas yesterday settled up by 6.01% at 314.1 on forecasts for higher demand than previously expected, colder-than-normal weather coming in late January and uncertainty about when the Freeport liquefied natural gas (LNG) export plant in Texas will exit a seven-month outage. 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. Technically market is under short covering as the market has witnessed a drop in open interest by -15.75% to settle at 22805 while prices are up 17.8 rupees, now Natural gas is getting support at 301 and below same could see a test of 287.9 levels, and resistance is now likely to be seen at 325.3, a move above could see prices testing 336.5.
Trading Ideas:
* Natural gas trading range for the day is 287.9-336.5.
* Natural gas rose on forecasts for higher demand than previously expected, colder-than-normal weather coming in late January
* Support also seen as uncertainty about when the Freeport liquefied natural gas (LNG) export plant in Texas will exit a seven-month outage.
* 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 down by -0.04% at 769.25 as physical demand remained subdued in the traditionally off-peak season and amid a looming global economic downturn. Prospects of further rate hikes and a firm dollar also pressured metals prices. Yangshan copper premium fell to $32.50 a tonne, its lowest since April 2022, indicating weakening demand to import copper into China. China's annual consumer inflation rate accelerated in December, driven by rising food prices even as domestic demand wavered amid restrained economic activity during the month. The consumer price index (CPI) was 1.8% higher than a year earlier, rising faster than the 1.6% annual gain seen in November, data from the National Bureau of Statistics (NBS) showed. The result matched a poll estimate of 1.8%. The CPI for all of 2022 was 2.0% higher than the level of 2021, compared with the government target of around 3%. Data showed new bank lending in China unexpectedly rose last month, and the central bank ramped up a liquidity injection. On the supply side, a row in Panama deepened as the government doubled down on an order that First Quantum Minerals Ltd halt operations at a copper mine. Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.49% to settle at 5453 while prices are down -0.3 rupees, now Copper is getting support at 763.7 and below same could see a test of 758 levels, and resistance is now likely to be seen at 774.3, a move above could see prices testing 779.2.
Trading Ideas:
* Copper trading range for the day is 758-779.2.
* Copper prices dropped as physical demand remained subdued in the traditionally off-peak season and amid a looming global economic downturn.
* Prospects of further rate hikes and a firm dollar also pressured metals prices.
* Yangshan copper premium fell to $32.50 a tonne, its lowest since April 2022, indicating weakening demand to import copper into China.

Zinc

Zinc yesterday settled up by 0.59% at 282.65 as demand prospects brightened after top consumer China reopened its borders. China's refined zinc output was 525,800 mt in December 2022, a month-on-month increase of 1,100 mt or 0.21%, and a year-on-year growth of 12,500 mt or 2.43%. Domestic refined zinc output in December increased compared with November, but was slightly lower than market expectations as a large-sized smelter in north-west China reduced its output in December after completing its annual production plan ahead of schedule. LME data showed that the zinc inventory was on a downward trend. The inventory continued to fall last week, and the latest figure recorded 22,850 mt, a new low of many years. According to the SHFE data, the zinc inventory has moved rangebound recently. On the supply side, inventories remain at record lows as the power crisis in Europe forced several smelters to operate at reduced capacity, while others were placed on care and maintenance, including the Budel smelter in the Netherlands, the Nordenham smelter in Germany, and the Auby smelter in France. As China's new year holiday approaches, market activity slows down, and the domestic stock accumulates. Global zinc stocks closed 2022 at 42,825 tonnes, an 84.7% reduction from the beginning of the year. Technically market is under fresh buying as the market has witnessed a gain in open interest by 4.67% to settle at 2063 while prices are up 1.65 rupees, now Zinc is getting support at 279.7 and below same could see a test of 276.6 levels, and resistance is now likely to be seen at 284.5, a move above could see prices testing 286.2.
Trading Ideas:
* Zinc trading range for the day is 276.6-286.2.
* Zinc gained as demand prospects brightened after top consumer China reopened its borders.
* LME zinc inventory continued to fall last week, and the latest figure recorded 22,850 mt, a new low of many years
* SHFE inventory bounced back by 17.45% to 24,023 mt last week, a new high in the past two months, but the overall inventory still stood low


Aluminium

Aluminium yesterday settled up by 0.84% at 215.6 helped by optimism over top consumer China's reopening, while a shaky U.S. dollar also lent support. China's annual inflation rate rose to 1.8% in December 2022 from November's eight-month low of 1.6%, in line with market consensus. The latest result largely reflected a faster rise in food prices even as domestic demand was sluggish amid a surge in COVID infections. China's producer prices fell 0.7% yoy in December 2022, after a 1.3% dropped in the previous month, worse than market forecasts of a 0.1% decline. This was the third straight month of decrease in factory gate prices, amid weakening domestic demand and falling commodity prices. 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 smelters in Guizhou were forced to stop the production twice amid the power shortage in late December, which led to an output cut of 450,000 mt. Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.65% to settle at 5313 while prices are up 1.8 rupees, now Aluminium is getting support at 212.5 and below same could see a test of 209.4 levels, and resistance is now likely to be seen at 217.3, a move above could see prices testing 219.
Trading Ideas:
* Aluminium trading range for the day is 209.4-219.
* Aluminum gained helped by optimism over top consumer China's reopening, while a shaky U.S. dollar also lent support.
* China inflation rate accelerates as expected
* China producer prices fall more than expected

Mentha oil

Mentha oil yesterday settled down by -0.98% at 1049.4 on profit booking after prices gained on improving export demand especially from China. Mentha exports during Apr-Nov 2022 has dropped by 18.10 percent at 1,485.25 tonnes as compared to 1,813.38 tonnes exported during Apr- 2022 2021. In the month of November 2022 around 236.22 tonnes Mentha was exported as against 141.82 tonnes in October 2022 showing a rise of 66.56%. In the month of November 2022 around 236.22 tonnes of Mentha was exported as against 249.26 tonnes in November 2021 showing a drop of 5.23%. 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 -10.2 Rupees to end at 1196.3 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.79% to settle at 973 while prices are down -10.4 rupees, now Mentha oil is getting support at 1044.8 and below same could see a test of 1040.1 levels, and resistance is now likely to be seen at 1055.5, a move above could see prices testing 1061.5.
Trading Ideas:
* Mentha oil trading range for the day is 1040.1-1061.5.
* In Sambhal spot market, Mentha oil dropped  by -10.2 Rupees to end at 1196.3 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained on improving export demand especially from China.
* Mentha exports during Apr-Nov 2022 has dropped by 18.10 percent at 1,485.25 tonnes
* In the month of November 2022 around 236.22 tonnes of Mentha was exported as against 249.26 tonnes in November 2021

Turmeric

Turmeric yesterday settled up by 0.1% at 7828 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-Nov 2022 has rose by 9.90 percent at 1,11,968.51 tonnes as compared to 1,01,882.03 tonnes exported during Apr-Nov 2021. In the month of November 2022 around 12,398.63 tonnes turmeric was exported as against 11,178.11 tonnes in October 2022 showing a rise of 10.92%. In the month of November 2022 around 12,398.63 tonnes of turmeric was exported as against 12,255.64tonnes in November 2021 showing a rise of 1.17%. 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 7409.3 Rupees gained 25.55 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.39% to settle at 12730 while prices are up 8 rupees, now Turmeric is getting support at 7796 and below same could see a test of 7762 levels, and resistance is now likely to be seen at 7866, a move above could see prices testing 7902.
Trading Ideas:
* Turmeric trading range for the day is 7762-7902.
* Turmeric gained on low level buying after prices dropped on an “unexpected” slump in domestic and export demand.
* Turmeric production in 2023 has been projected at 5.13 Lakh Mt against 4.67 Lakh Mt 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 7409.3 Rupees gained 25.55 Rupees.

Jeera

Jeera yesterday settled down by -0.59% at 36085 on profit booking after prices gained 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-Nov 2022 has dropped by 17.40 percent at 133,250.24 tonnes as compared to 161,317.94 tonnes exported during Apr-Nov 2021. In the month of November 2022 around 11,235.11 tonnes jeera was exported as against 12,427.86 tonnes in October 2022 showing a drop of 9.60%. In the month of November 2022 around 11,235.11 tonnes of jeera was exported as against 10,838.83 tonnes in November 2021 showing a rise of 3.66%. 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 -266.45 Rupees to end at 35017.35 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 8.01% to settle at 4569 while prices are down -215 rupees, now Jeera is getting support at 35590 and below same could see a test of 35100 levels, and resistance is now likely to be seen at 36680, a move above could see prices testing 37280.
Trading Ideas:
* Jeera trading range for the day is 35100-37280.
* Jeera dropped on profit booking after prices gained 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 down by -266.45 Rupees to end at 35017.35 Rupees per 100 kg.

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