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Gold

Gold yesterday settled down by -1% at 54521 following stronger-than-expected U.S. GDP report that also showed inflation readings a bit hotter than expected. The 10-year US Treasury note yield rose firmly above the 3.6% mark, hovering 15bps higher since the start of December amid aggressively hawkish decisions and guidances from major central banks, while investors digested final growth data for the United States. 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 Federal Reserve started its tightening cycle in March. In its last meeting, the FOMC increased projections for the federal funds rate to reach and stay at 5.1% in 2023 from prior estimates of 4.6%. Increased tightening momentum from other major central banks also pressured bond prices. Most notably, the Bank of Japan unexpectedly widened the tolerance band on its 10-year JGB yield, sending its yield above the 0.4% level. Also, the European Central Bank signaled it will continue to hike interest rates to tame inflation. The pace of Swiss gold shipments to Asia and the Middle East slackened in November as prices rose, with exports to countries including China and Turkey falling from October's level, Swiss customs data showed. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.89% to settle at 14153 while prices are down -550 rupees, now Gold is getting support at 54271 and below same could see a test of 54022 levels, and resistance is now likely to be seen at 54943, a move above could see prices testing 55366.
Trading Ideas:
* Gold trading range for the day is 54022-55366.
* Gold dropped following stronger-than-expected U.S. GDP report that also showed inflation readings a bit hotter than expected.
* The 10-year US Treasury note yield rose firmly above the 3.6% mark, hovering 15bps higher since the start of December
* The US economy expanded by 3.2% quarter-on-quarter in the three months leading to September of 2022


Silver

Silver yesterday settled down by -1.71% at 68520 as dollar rose after data showed the US economy expanded more than initially estimated in Q3 and weekly claims rose by less than expected last week. Still, Core PCE prices rose slightly more than previously thought in Q3. The greenback is still close to its lowest levels in six months fears that further monetary tightening from the Federal Reserve could tip the world’s largest economy into recession next year. Last week, the Fed raised interest rates by a more moderate 50 basis points but indicated that the terminal rate could reach 5.1% next year, higher than markets anticipated. Building permits in the United States tumbled 11.2 percent from a month earlier to a seasonally adjusted annual rate of 1.342 million in November 2022, the lowest level since June 2020 and well below market expectations of 1.485 million. 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. Still, worries of lower industrial demand capped silver’s rebound as pledges of higher borrowing costs for major central banks. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.67% to settle at 21035 while prices are down -1189 rupees, now Silver is getting support at 68028 and below same could see a test of 67537 levels, and resistance is now likely to be seen at 69425, a move above could see prices testing 70331.
Trading Ideas:
* Silver trading range for the day is 67537-70331.
* Silver dropped as the US economy expanded more than initially estimated in Q3 and weekly claims rose by less than expected
* The US economy grew an annualized 3.2% on quarter in Q3 2022, better than 2.9% in the second estimate
* US Building permits tumbled 11.2 percent from a month earlier to a seasonally adjusted annual rate of 1.342 million in November 2022


Crude oil

Crude oil yesterday settled down by -1.09% at 6435 as a surge in Covid-19 cases in China raised concerns about the outlook for energy demand, outweighing recent data showing a drop in crude inventories. However downside seen limited amid an improving demand outlook in top crude importer China, as the country appeared intent on ending its strict zero-Covid policy and delivering more pro-growth measures centered on reviving consumption. Meanwhile, investors remain cautious as major central banks are expected to tighten policy further, raising the risk of a global economic slowdown next year. 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. U.S. crude stocks and distillate inventories fell while gasoline inventories rose, the Energy Information Administration said. Crude inventories fell by 5.9 million barrels in the week to Dec. 16 to 418.2 million barrels, compared with analysts' in a poll for a 1.7 million-barrel drop. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 853,000 barrels in the last week, EIA said. Refinery crude runs fell by 150,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 1.3 percentage points in the week. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.9% to settle at 6040 while prices are down -71 rupees, now Crude oil is getting support at 6357 and below same could see a test of 6280 levels, and resistance is now likely to be seen at 6569, a move above could see prices testing 6704.
Trading Ideas:
* Crude oil trading range for the day is 6280-6704.
* Crudeoil dropped as a surge in Covid-19 cases in China raised concerns about the outlook for energy demand.
* U.S. crude stocks and distillate inventories fell while gasoline inventories rose
* Data showed that US crude inventories fell by 5.89 million barrels


Natural gas

Nat.Gas yesterday settled down by -4.38% at 428.1 on forecasts for warmer weather in late December and early January than previously expected. 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 long liquidation as the market has witnessed a drop in open interest by -19.4% to settle at 8423 while prices are down -19.6 rupees, now Natural gas is getting support at 412.3 and below same could see a test of 396.5 levels, and resistance is now likely to be seen at 455.6, a move above could see prices testing 483.1.
Trading Ideas:
* Natural gas trading range for the day is 396.5-483.1.
* Natural gas slid on forecasts for warmer weather in late December and early January than previously expected.
* 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 down by -0.41% at 712.3 as an accelerating wave of coronavirus infections in China, the biggest consumer, eroded demand. In a sign of slack demand, Chinese Yangshan copper import premiums fell to $40 a tonne from around $145 in early November. However, copper inventories in Chinese bonded and Shanghai Futures Exchange warehouses are very low compared to typical levels, offering little buffer for when demand rises. 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. Meanwhile, China may be struggling to keep a tally of COVID-19 infections as the country experiences a big spike in cases, a senior World Health Organization official said, a surge that could seriously dent the world's number two economy. Technically market is under long liquidation as the market has witnessed a drop in open interest by -11.08% to settle at 3738 while prices are down -2.95 rupees, now Copper is getting support at 709.1 and below same could see a test of 705.8 levels, and resistance is now likely to be seen at 718.3, a move above could see prices testing 724.2.
Trading Ideas:
* Copper trading range for the day is 705.8-724.2.
* Copper prices edged lower as an accelerating wave of coronavirus infections in China, the biggest consumer, eroded demand.
* In a sign of slack demand, Chinese Yangshan copper import premiums fell to $40 a tonne from around $145 in early November.
* Copper market in 46,000 tonne surplus in October –ICSG



Zinc

Zinc yesterday settled down by -1.86% at 264.3 on profit booking as a surge in infections that is reducing consumption. On the supply side, inventories remain at record lows as the power crisis in Europe has forced many smelters to shut down or curtail production this year. The People's Bank of China (PBoC) left its key lending rates unchanged for the fourth straight month at December fixing, as widely expected, amid a slowdown in economic activity due to rising COVID infections and efforts from the government to stabilize its economy in 2023 and maintain ample liquidity in financial markets in order to meet key targets. The World Bank has cut its China growth outlook for this year and next, citing the impact of the abrupt loosening of strict COVID-19 containment measures and persistent property sector weakness. The Washington-based lender, in a report, said it expected China's economy to grow 2.7% in 2022, before recovering to 4.3% in 2023 as it reopens following the worst of the pandemic. The bank's expected expansion for 2022 would be well below the official target of around 5.5%. In September, the World Bank forecast China's growth at 2.8% this year and 4.5% next year. Technically market is under long liquidation as the market has witnessed a drop in open interest by -19.51% to settle at 1580 while prices are down -5 rupees, now Zinc is getting support at 262 and below same could see a test of 259.7 levels, and resistance is now likely to be seen at 268.6, a move above could see prices testing 272.9.
Trading Ideas:
* Zinc trading range for the day is 259.7-272.9.
* Zinc prices dropped on profit booking as a surge in infections that is reducing consumption.
* Inventories remain at record lows as the power crisis in Europe has forced many smelters to shut down
* PBOC Injects CNY 85 Billion into Market



Aluminium

Aluminium yesterday settled down by -0.38% at 207.75 as 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. LME aluminium inventories have been falling in recent weeks and stocks in Shanghai Futures Exchange warehouses, at 92,373 tonnes, are near multi-year lows. Yet prices of the metal used in transport, construction and packaging have declined in December and are down 15% this year due to a global economic slowdown. Citi expects the 65-70 million tonne a year market to be oversupplied by 900,000 tonnes next year. In China, the biggest metals consumer, cities scrambled to install hospital beds and build fever screening clinics amid a surge in COVID-19 cases that will likely disrupt economic activity. Global primary aluminium output in November rose 3.8% year on year to 5.611 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.311 million tonnes in November, the IAI said. China's aluminium imports in November fell 35.7% from a year earlier as a result of mounting domestic supply, also as the COVID-hit economy continued to temper demand for the light metal. Technically market is under long liquidation as the market has witnessed a drop in open interest by -23.26% to settle at 1501 while prices are down -0.8 rupees, now Aluminium is getting support at 207.2 and below same could see a test of 206.5 levels, and resistance is now likely to be seen at 208.9, a move above could see prices testing 209.9.
Trading Ideas:
* Aluminium trading range for the day is 206.5-209.9.
* Aluminum prices dropped as Chinese primary aluminium imports totalled 110,700 mt in November, up 64.1% MoM
* LME aluminium inventories have been falling in recent weeks and stocks in SHFE warehouses, are near multi-year lows.
* Global aluminium output rises 3.8% y/y in November – IAI


Mentha oil

Mentha oil yesterday settled down by -1.23% at 985.6 on profit booking after prices gained 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 -8.6 Rupees to end at 1141.8 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -20.86% to settle at 277 while prices are down -12.3 rupees, now Mentha oil is getting support at 980.8 and below same could see a test of 975.9 levels, and resistance is now likely to be seen at 994.8, a move above could see prices testing 1003.9.
Trading Ideas:
* Mentha oil trading range for the day is 975.9-1003.9.
* In Sambhal spot market, Mentha oil dropped  by -8.6 Rupees to end at 1141.8 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after 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 -0.58% at 8594 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 39.2 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.95% to settle at 9425 while prices are down -50 rupees, now Turmeric is getting support at 8520 and below same could see a test of 8448 levels, and resistance is now likely to be seen at 8692, a move above could see prices testing 8792.
Trading Ideas:
* Turmeric trading range for the day is 8448-8792.
* 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 39.2 Rupees.


Jeera

Jeera yesterday settled up by 2.44% at 29375 as sowing In Gujarat, dropped by nearly -5% with 261,635.00 hectares against sown area of 2021 which was 274,298.00 hectares as on 19-12-2022. 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 137.15 Rupees to end at 28177.9 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -6.45% to settle at 6696 while prices are up 700 rupees, now Jeera is getting support at 28610 and below same could see a test of 27840 levels, and resistance is now likely to be seen at 29915, a move above could see prices testing 30450.
Trading Ideas:
* Jeera trading range for the day is 27840-30450.
* Jeera prices gained to all time high as sowing in Gujarat, dropped by nearly -5% with 261,635.00 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 137.15 Rupees to end at 28177.9 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -2.58% at 29510 on profit booking after prices gained as the CAI has reduced its cotton crop estimate for the 2022- 23 season to 339.75 lakh bales of 170 kgs each. This season, Punjab has seen a drastic decline in the arrival of Kapas (raw unginned cotton). Nearly 73% less cotton arrived in mandis compared to the arrival in the same period last year. This year, the yield of the crop has also been low. The less arrival is affecting the business of both ginners, who separate cotton from seed, and spinners, who make thread from cotton, as they are getting less raw material from the local market even during season. The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year. Against the production of around 13.16 lakh cotton bales last year, the production this year is estimated to be around 17.79 lakh bales. According to USDA, World Cotton and Market Report, Global cotton production is estimated down by 700,000 bales from the previous month to 115.7 million, largely owing to lower production in Pakistan. Pakistan production has fallen due to floods and poor weather. Global stocks are forecasted higher with consumption projected lower more than 3.0 million bales. This is the seventh consecutive monthly decline for global consumption. In spot market, Cotton dropped by -180 Rupees to end at 30470 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.06% to settle at 1163 while prices are down -780 rupees, now Cotton is getting support at 29180 and below same could see a test of 28850 levels, and resistance is now likely to be seen at 30070, a move above could see prices testing 30630.
Trading Ideas:
* Cotton trading range for the day is 28850-30630.
* Cotton dropped on profit booking after prices gained as CAI pegs down its cotton crop estimate for 2022-23 season by 4.25 lakh bales to 339.75 lakh bales
* Cotton arrival in mandis of Punjab down by 73% this year
* The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year.
* In spot market, Cotton dropped  by -180 Rupees to end at 30470 Rupees.

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