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Gold

Gold yesterday settled up by 1.13% at 54743 as dollar index extended losses and fell below 104, the lowest level in six months, after the CPI report showed inflation rate in the US eased more than anticipated in November to 7.1%. The monthly rate and core figures also surprised on the downside, offering further support the worst of inflation has likely passed. Meanwhile, the last Fed's 2-day meeting of the year begins today. Money markets are currently pricing a 50bps rate hike in the funds rate after four successive 75bps rate increases but investors will look for any changes on the peak rate or whether policymakers think there will be a need to become more hawkish. Investors also turned cautious as other major central banks including the European Central Bank, the Bank of England and the Swiss National Bank are set to decide on monetary policy this week as well. Gold premiums in China rose as demand picked up after the top consumer eased COVID restrictions, while high prices muted activity in India. Premiums in China rose to $10-$25 an ounce over benchmark spot prices from last week's $2-$12. Dealers offered discounts of up to $20 an ounce over official domestic prices versus last week's $18 discounts. Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.04% to settle at 15993 while prices are up 611 rupees, now Gold is getting support at 54235 and below same could see a test of 53726 levels, and resistance is now likely to be seen at 55150, a move above could see prices testing 55556.
Trading Ideas:
* Gold trading range for the day is 53726-55556.
* Gold rose as dollar sinks to 6-month low after CPI data
* The CPI report showed inflation rate in the US eased more than anticipated in November to 7.1%.
* Money markets are currently pricing a 50bps rate hike in the funds rate after four successive 75bps rate increases


Silver
Silver yesterday settled up by 1.46% at 68775 as investors welcomed weaker-than-expected US CPI data, and braced for interest rate decisions from major central banks later this week. The annual inflation rate in the US slowed for a fifth straight month to 7.1% in November of 2022, the lowest since December last year, and below forecasts of 7.3%. It follows a reading of 7.7% in October. The Consumer Price Index in the United States increased by 0.1% from the prior month in November of 2022, slowing from the 0.4% increase in October and below expectations of a 0.3% rise. The ECB is expected to deliver a dialed-down 50 bps rate hike on Thursday, despite worries about a looming recession and signs inflationary pressures are easing. Meanwhile, the US Federal Reserve is set to hike rates by 50 bps Wednesday following the release of strong economic and labor data in recent weeks. Elsewhere, the Bank of England, and the Swiss and Norwegian central banks are also expected to increase borrowing costs. Signs of low supply 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 3.58% to settle at 21339 while prices are up 989 rupees, now Silver is getting support at 67985 and below same could see a test of 67194 levels, and resistance is now likely to be seen at 69571, a move above could see prices testing 70366.
Trading Ideas:
* Silver trading range for the day is 67194-70366.
* Silver rose as investors welcomed weaker-than-expected US CPI data, and braced for interest rate decisions from major central banks.
* The ECB is expected to deliver a dialed-down 50 bps rate hike on Thursday, despite worries about a looming recession
* The yield on the US 10-year Treasury noted retreated below the 3.5% mark, approaching the three-month low of 3.4% touched on December 7th


Crude oil
Crude oil yesterday settled up by 2.73% at 6254 amid growing optimism about China's reopening and persistent supply disruptions. China has signaled a softening stance in the fight against the coronavirus, raising hopes for a swifter rebound in economic activity and crude demand. At the same time, the Keystone Pipeline that connects fields in Canada to refiners in the US Gulf Coast remained shut. Adding to the bullish tone were softer-than-expected US inflation data, reinforcing the narrative that the Federal Reserve will be less aggressive while lifting the growth outlook. Meanwhile, President Vladimir Putin's threatened to cut production in retaliation to a Western price cap on Russian crude, a move from the EU, G7, and Australia that so far had little impact on global markets. Oil output from the Permian shale basin in January is set to touch a record 5.6 million barrels per day (bpd), the U.S. forecast, but the increase is a third of September's pace. Output in the biggest U.S. shale oil basin is set to rise by about 37,000 bpd, the smallest gain in seven months, based on projections from the U.S. Energy Information Administration (EIA) in its monthly drilling productivity report. Gains slowed as some of the largest firms are warning of overworked oilfields and less productive new wells. Technically market is under short covering as the market has witnessed a drop in open interest by -40% to settle at 8980 while prices are up 166 rupees, now Crude oil is getting support at 6119 and below same could see a test of 5985 levels, and resistance is now likely to be seen at 6347, a move above could see prices testing 6441.
Trading Ideas:
* Crude oil trading range for the day is 5985-6441.
* Crude oil rose amid growing optimism about China's reopening and persistent supply disruptions.
* The Keystone Pipeline that connects fields in Canada to refiners in the US Gulf Coast remained shut.
* President Vladimir Putin's threatened to cut production in retaliation to a Western price cap on Russian crude.


Nat.Gas
Nat.Gas yesterday settled up by 2.35% at 571.6 amid forecasts for much colder weather and higher heating demand than previously expected. Frigid temperatures and heavy precipitation on the West Coast have fueled natural gas demand at a time when storage inventories are below average. Meanwhile, the Freeport LNG export plant in Texas, forced to go offline in June following a fire, expects to begin bringing operations back online by year's end, in another delay due to pending regulatory approval. Still, prices remain subdued for this time of the year, as milder weather in most of October and November delayed the winter heating season while record production levels added to the bearish sentiment. EIA reported that US production of dry natural gas, used primarily in homes and businesses for heating, cooking, and electricity, is set to break an annual record of 98.0 Bcf/d in 2022. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 123.4 billion cubic feet per day (bcfd) this week to 145.8 bcfd next week. Data provider Refinitiv forecast 504 heating degree days (HDDs), which are used to estimate demand to heat homes and businesses, over the next two weeks in the Lower 48 U.S. states, compared with a 30-year average of 409 HDDs for the period. Technically market is under fresh buying as the market has witnessed a gain in open interest by 36.95% to settle at 6434 while prices are up 13.1 rupees, now Natural gas is getting support at 550.7 and below same could see a test of 529.7 levels, and resistance is now likely to be seen at 588.7, a move above could see prices testing 605.7.
Trading Ideas:
* Natural gas trading range for the day is 529.7-605.7.
* Natural gas rose amid forecasts for much colder weather and higher heating demand than previously expected.
* Frigid temperatures and heavy precipitation on the West Coast have fueled natural gas demand at a time when storage inventories are below average.
* The Freeport LNG export plant in Texas, expects to begin bringing operations back online by year's end



Copper
Copper yesterday settled up by 0.96% at 706.95 tracking China's property shares, but gains were limited by surging COVID-19 infections in China and cautiousness ahead of central bank meetings this week. Support seen after cooler-than-expected inflation in the US ramped up hopes that the Federal Reserve could end its tightening cycle at a lower interest rate. Support seen amid a slew of supporting measures and data showing an increase in weekly new home sales last week buoyed the sector that is a major consumer of industrial metals. Peruvian community members blocked a key mining corridor highway near the city of Cusco amid protests against the country's new president, who took office just last week. The impact of the protest on production at the mine was not immediately known, but previous blockades this year at Las Bambas, one of the world's largest copper mines and owned by China's MMG Ltd, severely disrupted operations. The annual inflation slowed down to 7.1% and the monthly rate and core figures surprised on the downside, pointing that the worst inflationary pressures are behind. Meanwhile, the last Fed meeting of the year begins today. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.49% to settle at 5094 while prices are up 6.75 rupees, now Copper is getting support at 700 and below same could see a test of 693 levels, and resistance is now likely to be seen at 715.8, a move above could see prices testing 724.6.
Trading Ideas:
* Copper trading range for the day is 693-724.6.
* Copper prices climbed tracking China's property shares, but gains were limited by surging COVID-19 infections in China.
* Support seen after cooler-than-expected inflation in the US ramped up hopes that Fed could end its tightening cycle at a lower interest rate.
* Visible copper inventories remain low, with Goldman Sachs predicting a supply deficit in 2023 and prices at $11,000 in a year.


Zinc
Zinc yesterday settled up by 0.19% at 289.95 as LME zinc inventory has entered a downward track since early September, and continued to fall last week, standing at 39,750 mt, its lowest in more than 32 years. Nyrstar has completed scheduled maintenance work at its Auby operation in Northern France, but the smelter will not resume zinc production due to challenging market conditions. "This period will be used to bring forward future planned investments to improve operational stability and efficiency of the Auby smelter once operations are able to restart." Nyrstar put its zinc smelting operations at Budel in the Netherlands on care and maintenance in September. Metal industry sources say Nyrstar has the capacity to produce 720,000 tonnes of zinc in Europe, with 315,000 of that at Budel. Zinc ingot social inventory across seven markets in China totalled 53,700 mt as of Friday December 9, down 800 mt from this Monday, alluding lingering supply tightness in the spot market. The global zinc market deficit rose to 103,000 tonnes in September from a revised deficit of 90,200 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 101,100 tonnes in August. Technically market is under short covering as the market has witnessed a drop in open interest by -9.52% to settle at 3496 while prices are up 0.55 rupees, now Zinc is getting support at 287.5 and below same could see a test of 285 levels, and resistance is now likely to be seen at 292.5, a move above could see prices testing 295.
Trading Ideas:
* Zinc trading range for the day is 285-295.
* Zinc rose as LME zinc inventory continued to fall last week, standing at 39,750 mt, its lowest in more than 32 years.
* Nyrstar's Auby zinc plant on care and maintenance until further notice
* Global zinc market deficit rises to 103,000 T in September – ILZSG



Aluminium
Aluminium yesterday settled up by 0.85% at 212.9 as Guizhou’s electricity is in short supply, and aluminium smelters may reduce their capacity by 20%. Some aluminium processing plants plan to close early for the Chinese New Year. The market is waiting for the US Fed’s policy meeting this week to see whether the Fed will slow down the pace of interest rate hikes. Low social inventory will support aluminium prices. China produced around 3.34 million mt aluminium in November, up 8.7% YoY. The daily output rose 1,055 mt MoM to 111,200 mt. The output totalled 36.64 million mt from January to November, an increase of 3.7% on the year. In November, the aluminium output saw both increase and decrease, but the output increase was more significant as the operating capacity continued to increase amid the production resumption of aluminium plants in Guangxi and Sichuan. 230,000 mt of capacity was resumed in Guangxi. And the capacity in Sichuan increased 140,000 mt MoM to 500,000 mt. In December, some enterprises in Sichuan and Guangxi resumed the production. However, due to the power shortage in Sichuan and the high costs in Guangxi, SMM estimates that the production resumption in these regions would slow down in December. Technically market is under short covering as the market has witnessed a drop in open interest by -0.36% to settle at 5221 while prices are up 1.8 rupees, now Aluminium is getting support at 211 and below same could see a test of 209.2 levels, and resistance is now likely to be seen at 214.4, a move above could see prices testing 216.
Trading Ideas:
* Aluminium trading range for the day is 209.2-216.
* Aluminum gains as Guizhou’s electricity is in short supply, and aluminium smelters may reduce their capacity by 20%.
* China produced around 3.34 million mt aluminium in November, up 8.7% YoY.
* Some aluminium processing plants plan to close early for the Chinese New Year.


Mentha oil
Mentha oil yesterday settled up by 0.36% at 998.3 on low level buying after prices dropped as 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 -5.6 Rupees to end at 1131.4 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -4.76% to settle at 680 while prices are up 3.6 rupees, now Mentha oil is getting support at 987.6 and below same could see a test of 976.9 levels, and resistance is now likely to be seen at 1005.2, a move above could see prices testing 1012.1.
Trading Ideas:
* Mentha oil trading range for the day is 976.9-1012.1.
* In Sambhal spot market, Mentha oil dropped  by -5.6 Rupees to end at 1131.4 Rupees per 360 kgs.
* Mentha gained on low level buying after prices dropped as exports during Apr-Oct 2022 has dropped by 20.15 percent
* In the month of September 2022 around 220.67 tonnes Mentha was exported showing a drop of 7.30%.
* However, Synthetic Mentha supply remains uninterrupted.


Turmeric
Turmeric yesterday settled up by 1.44% at 8046 on low level buying after prices dropped amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region. 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. As per Andhra Pradesh agricultural department, Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67%. 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 7349.85 Rupees gained 49.65 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 7.29% to settle at 7210 while prices are up 114 rupees, now Turmeric is getting support at 7912 and below same could see a test of 7778 levels, and resistance is now likely to be seen at 8178, a move above could see prices testing 8310.
Trading Ideas:
* Turmeric trading range for the day is 7778-8310.
* Turmeric gained on low level buying after prices dropped amid lower demand from domestic spice-makers and stockists amid availability of supply.
* As per Andhra Pradesh agricultural department, turmeric sowing activity completed around 16,921 hectares, down by 12.67% till date from last 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 7349.85 Rupees gained 49.65 Rupees.


Jeera
Jeera yesterday settled up by 1.22% at 27315 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 sowing around 75% to 80% sowing has been completed in Rajasthan Jeera growing regions, last year till date sowing completed around 85% to 90%. 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 6.5 Rupees to end at 26447.45 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.31% to settle at 6564 while prices are up 330 rupees, now Jeera is getting support at 26850 and below same could see a test of 26380 levels, and resistance is now likely to be seen at 27590, a move above could see prices testing 27860.
Trading Ideas:
* Jeera trading range for the day is 26380-27860.
* Jeera gained amid higher demand for the fresh crop and supply tightness in the physical market.
* Current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* 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 6.5 Rupees to end at 26447.45 Rupees per 100 kg.


Cotton
Cotton yesterday settled up by 1.12% at 31670 helped by prospects of an improvement in demand from top consumer China. India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales. According to the Punjab Mandi Board data, cotton crop has seen the slowest arrival in the last five years even as the average rate is the highest since 2018. Punjab is expected to have produced 20 lakh quintals against 29 lakh quintals produced in the 2021-22 season. China's agriculture ministry lowered its outlook for cotton consumption, as slowing global economic growth continues to hurt demand for textiles. China's cotton consumption in the 2022/23 crop year that began in September is seen at 7.5 million tonnes, 200,000 tonnes lower than in last month's forecast, the ministry said in its monthly Chinese Agricultural Supply and Demand Estimates (CASDE) report. 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 -90 Rupees to end at 32040 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -6.26% to settle at 2065 while prices are up 350 rupees, now Cotton is getting support at 31240 and below same could see a test of 30800 levels, and resistance is now likely to be seen at 31960, a move above could see prices testing 32240.
Trading Ideas:
* Cotton trading range for the day is 30800-32240.
* Cotton gains helped by prospects of an improvement in demand from top consumer China
* China cuts cotton demand outlook on slowing global growth
* USDA cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton
* In spot market, Cotton dropped  by -90 Rupees to end at 32040 Rupees.

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