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Gold

Gold yesterday settled down by -0.05% at 48042 as the dollar and US Treasury yields failed to gain ground despite strong US economic data and persistent inflation. Strong U.S. retail sales data eased worries from the highly infectious Omicron coronavirus variant, which has forced thousands of flight cancellations and delays over the holidays and stranded cruise ships. The U.S. dollar, also viewed as a safe-haven, continued to languish toward the bottom end of its recent trading range versus a basket of peers, even after a hawkish tilt at the Federal Reserve that had policy makers signalling three quarter-point interest rate increases next year. The US economy grew at an upwardly revised 2.3% in the third quarter, up from the prior estimate of 2.1%, the Commerce Department reported. The Fed-preferred PCE index also surged 5.7% in November, its highest level since 1982, bolstering expectations that elevated inflation is likely to persist. Gold is widely considered as a hedge against inflation and market uncertainties. China's net gold imports via Hong Kong dropped 16.5% in November from the previous month, Hong Kong Census and Statistics Department data showed. Net imports stood at 45.321 tonnes in November compared with 54.262 tonnes in October, the data showed. Total gold imports via Hong Kong fell 12.3% to 50.672 tonnes from 57.804 tonnes. Technically market is under long liquidation as market has witnessed drop in open interest by -1.07% to settled at 8605 while prices down -24 rupees, now Gold is getting support at 47920 and below same could see a test of 47798 levels, and resistance is now likely to be seen at 48246, a move above could see prices testing 48450.

Trading Ideas:

* Gold trading range for the day is 47798-48450.
* Gold prices steadied as the dollar and US Treasury yields failed to gain ground despite strong US economic data and persistent inflation.
* Strong U.S. retail sales data eased worries from the highly infectious Omicron coronavirus variant
* The US economy grew at an upwardly revised 2.3% in the third quarter, up from the prior estimate of 2.1%
 

Silver

Silver yesterday settled up by 0.34% at 62514 as Treasury yields and the dollar eased. Worries over the impact of the Omicron variant eased after data showed that the new coronavirus strain may only cause milder symptoms. Still, restrictions from China to the US have been tightened as world daily Covid-19 cases hit fresh records. Strong U.S. retail sales data eased worries from the highly infectious Omicron coronavirus variant, which has forced thousands of flight cancellations and delays over the holidays and stranded cruise ships. The U.S. dollar, also viewed as a safe-haven, continued to languish toward the bottom end of its recent trading range versus a basket of peers, even after a hawkish tilt at the Federal Reserve that had policy makers signalling three quarter-point interest rate increases next year. The governments in France and Britain resisted imposing lockdowns despite high infection rates. France announced restrictions on large gatherings and ordered citizens to work from home for at least three days a week from January 3. The People's Bank of China injected 200 billion yuan into the financial system via a seven-day reverse repurchase agreements to ease liquidity constraints. Revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of December. Technically market is under short covering as market has witnessed drop in open interest by -0.98% to settled at 10489 while prices up 213 rupees, now Silver is getting support at 62159 and below same could see a test of 61804 levels, and resistance is now likely to be seen at 63054, a move above could see prices testing 63594.

Trading Ideas:

* Silver trading range for the day is 61804-63594.
* Silver prices rose as Treasury yields and the dollar eased.
* The governments in France and Britain resisted imposing lockdowns despite high infection rates.
* PBOC injected 200 billion yuan into the financial system via a seven-day reverse repurchase agreements to ease liquidity constraints.
 

Crude oil

Crude oil yesterday settled up by 0.18% at 5683 supported by easing concerns over the Omicron coronavirus supply outages and expectations that U.S. inventories fell last week. Support comes as well from high aggregated production disruptions in Ecuador, Libya and Nigeria and the expectation of another large drop in U.S. crude inventories. The three oil producers declared force majeures this month on part of their oil production because of maintenance issues and oilfield shutdowns. Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned production increase of 400,000 barrels per day in February. At its last meeting, OPEC+ stuck to its plans to boost output for January despite Omicron. Money managers raised their net long U.S. crude futures and options positions in the week to December 21, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group raise its combined futures and options position in New York and London by 4,634 contracts to 259,093 during the period. Japan's crude oil imports rose 21.8% to 2.81 million barrels per day (13.39 million kilolitres) in November from a year earlier, marking a fourth straight month of gains, the Ministry of Economy, Trade and Industry (METI) said. Technically market is under short covering as market has witnessed drop in open interest by -4.97% to settled at 8352 while prices up 10 rupees, now Crude oil is getting support at 5643 and below same could see a test of 5604 levels, and resistance is now likely to be seen at 5739, a move above could see prices testing 5796.

Trading Ideas:

* Crude oil trading range for the day is 5604-5796.
* Crude oil gains supported by supply outages and expectations that U.S. inventories fell last week.
* Prices supported by easing concerns over the Omicron coronavirus
* Speculators raise U.S. crude oil net longs – CFTC

Nat.Gas

Nat.Gas yesterday settled up by 0.31% at 293.1 on forecasts for milder weather and less heating demand over the next two weeks than previously expected. Still, Russian supplies remained a major upside risk, as Gazprom said European utilities weren’t booking more gas and flows through the key Yamal-Europe continued to move east, which President Putin says is due to German importers reselling natural gas to Poland and Ukraine. HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day's average temperature is below 65 Fahrenheit (18 Celsius). Refinitiv projected average U.S. gas demand, including exports, would jump from 110.0 billion cubic feet per day (bcfd) this week to 126.7 bcfd next week as the weather turns seasonally colder. Output in the U.S. Lower 48 has averaged 97.0 billion cubic feet per day (bcfd) so far in December, which would top the monthly record of 96.5 bcfd in November. UK natural gas prices slumped below 270 pence a therm, in line with the Dutch contract and has shed more than 40% from a record 451.72 pence over the past four sessions, as more US LNG tankers sailed to the UK and other European countries, whilst fears of a Russian invasion of Ukraine faded. Technically market is under fresh buying as market has witnessed gain in open interest by 17.3% to settled at 6251 while prices up 0.9 rupees, now Natural gas is getting support at 285 and below same could see a test of 276.8 levels, and resistance is now likely to be seen at 302.4, a move above could see prices testing 311.6.

Trading Ideas:

* Natural gas trading range for the day is 276.8-311.6.
* Natural gas gained on forecasts for milder weather and less heating demand over the next two weeks than previously expected.
* Refinitiv projected average U.S. gas demand, including exports, would jump from 110.0 bcfd this week to 126.7 bcfd next week
* EIA said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 17.

Copper

Copper yesterday settled down by -0.56% at 749.85 on profit booking after prices seen supported earlier in the day as worries eased over the impact of the rapidly spreading Omicron coronavirus variant on global demand. China will keep its monetary policy flexible next year as it seeks to stabilise growth and lower financing costs for businesses amid growing economic headwinds, the central bank said. The People’s Bank of China (PBOC) injected a total CNY 200 billion into the country's financial system, offsetting the CNY 10 billion of such loans expiring on the same day, as demand for liquidity increased before year-end. Support seen as some European countries refrained from imposing tough mobility restrictions, with the British government in particular awaiting more evidence on whether its health service can cope with high infection rates. Zijin Mining , has started production at its Qulong copper mine in Tibet, one of the largest in China, adding a new source of supply to the market for next year. Profits at China's industrial firms grew at a much slower pace in November, official data showed, pressured by tumbling prices of some raw materials, a faltering property market and weaker consumer demand. In China, the copper inventory in the bonded zone dropped 2,200 mt to 171,700 mt from last Friday, marking the 11th consecutive week of decline. Technically market is under long liquidation as market has witnessed drop in open interest by -6.62% to settled at 3755 while prices down -4.2 rupees, now Copper is getting support at 746.9 and below same could see a test of 743.8 levels, and resistance is now likely to be seen at 755.2, a move above could see prices testing 760.4.

Trading Ideas:

* Copper trading range for the day is 743.8-760.4.
* Copper dropped on profit booking after prices seen supported earlier as worries eased over the impact of the rapidly spreading Omicron coronavirus variant
* China will keep its monetary policy flexible next year as it seeks to stabilise growth and lower financing costs for businesses amid growing economic headwinds
* PBOC injects CNY 200 billion into market

Zinc

Zinc yesterday settled down by -0.96% at 288.3 as total zinc inventory across seven Chinese markets stood at 126,700 mt, up 2,500 mt from December 24 and 2,500 mt from December 20. China’s central bank pledged greater support for the real economy and said it will make monetary policy more forward-looking and targeted, amid expectations of easing as a property slowdown saps growth. Meanwhile, some galvanising and zinc oxide plants were planning to suspend their production in the off-season, coupled with the environment protection incident in north China. On the macro front, the US retails sales’ performance was outstanding, offsetting the negative impacts from cancelled flights due to omicron COVID variant as the market feared that the travel stocks may be suppressed. President Biden suggested raising COVID test capability to meet the vast demand, and the UK and France authorities believed that the high vaccination rate will spare the hospitals from overburden even though the COVID cases were surging. In China, PBoC work conference stressed the need to use a variety of monetary policy tools in 2022 to maintain reasonable liquidity, enhance the stability of total credit growth, increase support for the real economy, and maintain the growth rate of money supply and social financing scale to match the nominal economic growth rate. Technically market is under long liquidation as market has witnessed drop in open interest by -0.23% to settled at 2194 while prices down -2.8 rupees, now Zinc is getting support at 286.2 and below same could see a test of 284.2 levels, and resistance is now likely to be seen at 291.1, a move above could see prices testing 294.

Trading Ideas:

* Zinc trading range for the day is 284.2-294.
* Zinc dropped as total zinc inventory across seven Chinese markets stood at 126,700 mt, up 2,500 mt
* Meanwhile, some galvanising and zinc oxide plants were planning to suspend their production in the off-season
* The US retails sales’ performance was outstanding, offsetting the negative impacts from cancelled flights due to omicron COVID variant

 

Nickel

Nickel yesterday settled down by -0.06% at 1550.7 pared all gains on profit booking after seen supported helped by easing worries over the impact of the Omicron variant and hopes of continued policy support for economic growth in the world's top metals consumer. Risk sentiment improved as data showed that the new coronavirus variant may cause milder symptoms. Indonesian President Joko Widodo inaugurated a new ferronickel plant with 1.8 million tonne output capacity in southeast Sulawesi province. China will keep its monetary policy flexible next year as it seeks to stabilise growth and lower financing costs for businesses amid growing economic headwinds, the central bank said. On the fundamentals, the nickel sulphate market was still pessimistic, and NPI demand rose limitedly amid maintenance plans of steel mills. The nickel ore inventory at Chinese ports dipped 118,000 wmt from a week earlier to 8.66 million wmt as of December 24. Total Ni content stood at 68,000 mt. The total inventory at seven major ports stood at around 3.96 million wmt, a drop of 108,000 wmt from a week earlier. The nickel ore inventories have fallen for five consecutive weeks since the end of November as the imports have decreased significantly. Technically market is under fresh selling as market has witnessed gain in open interest by 4.12% to settled at 1693 while prices down -1 rupees, now Nickel is getting support at 1543.2 and below same could see a test of 1535.6 levels, and resistance is now likely to be seen at 1560.2, a move above could see prices testing 1569.6.

Trading Ideas:

* Nickel trading range for the day is 1535.6-1569.6.
* Nickel settled flat amid easing worries over the impact of the Omicron variant and hopes of continued policy support for economic growth
* Risk sentiment improved as data showed that the new coronavirus variant may cause milder symptoms.
* Indonesian President Joko Widodo inaugurated a new ferronickel plant with 1.8 million tonne output capacity in southeast Sulawesi province.

Aluminium

Aluminium yesterday settled down by -0.42% at 227.25 as some aluminium smelters in Yunnan and Inner Mongolia partly resumed the production, which slowly brought up the domestic aluminium output. However, the aluminium ingot social inventory in the major consuming markets dropped as the output proportional to aluminium ingot contracted, and the transport efficiency declined as well. The spot market, on the other hand, was quiet and the mainstream quotes were in discounts as most manufacturers were busy with collecting funds by the year-end. Investors continued to track reports about surging coronavirus cases and weigh the variant's impact on the economic recovery. China reported its highest daily rise in local Covid-19 cases in 21 months over the weekend, pushing regions into lockdowns and tighter social restrictions. There were concerns over Europe's slowing economic growth on the back of surging prices and new COVID restrictions and as the European Central Bank is seen tightening policy slower than the US Federal Reserve. The bloc's central bank announced earlier this month a reduction in the pace of its asset purchases due to the progress on economic recovery and towards its medium-term inflation target, but signaled interest rates will be kept at record-low levels for some time. Technically market is under long liquidation as market has witnessed drop in open interest by -0.24% to settled at 2898 while prices down -0.95 rupees, now Aluminium is getting support at 226.3 and below same could see a test of 225.4 levels, and resistance is now likely to be seen at 228.5, a move above could see prices testing 229.8.

Trading Ideas:

* Aluminium trading range for the day is 225.4-229.8.
* Aluminium dropped as some aluminium smelters in Yunnan and Inner Mongolia partly resumed the production
* Investors continued to track reports about surging coronavirus cases and weigh the variant's impact on the economic recovery.
* China reported its highest daily rise in local Covid-19 cases in 21 months over the weekend, pushing regions into lockdowns and tighter social restrictions.
 

Mentha oil

Mentha oil yesterday settled up by 0.92% at 992.6 on low level buying after prices dropped as demand from consumer side is extremely weak and industrial demand is also not picking up. Prices got support in last few weeks as due to crop failure and low recovery of oil, availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Major physical market player expects demand to sluggish for next few week as cash crunch seen in spot market, while expectations are high about demand improvement ahead of winter season starts. China is one of the biggest buyer for Indian Mentha, no much buying inquiry from China as mainland China and Hong Kong markets were shut. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Firstly damages due to rain in key area and secondly farmers for the last 2 years where sowing mentha but due to not getting much profit at intervals there had been shift to other crops also. In Sambhal spot market, Mentha oil dropped by -1.2 Rupees to end at 1094 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 1.35% to settled at 901 while prices up 9 rupees, now Mentha oil is getting support at 987.2 and below same could see a test of 981.7 levels, and resistance is now likely to be seen at 996, a move above could see prices testing 999.3.

Trading Ideas:

* Mentha oil trading range for the day is 981.7-999.3.
* In Sambhal spot market, Mentha oil dropped  by -1.2 Rupees to end at 1094 Rupees per 360 kgs.
* Mentha oil gained on low level buying after prices dropped as demand from consumer side is extremely weak
* Availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season.
* Further production this year will be lower as compare with last year because of two important factors.
 

Turmeric

Turmeric yesterday settled down by -0.38% at 9014 as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric. However downside seen limited on good domestic and export demand, besides fears of heavy rains having affected the new crop due next month. The sentiment improved on reports of damage to the crop in Telangana and Andhra Pradesh. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. This year, the crop was also lower compared with last year, he said. Also, the quality of the produce was not good, resulting in prices gaining. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In view of the heavy rains in the growing areas, particularly Maharashtra, the next crop’s yield could be lower. Spices Board data show turmeric exports lower by 26 per cent in volume during the first half of the current fiscal at 77,245 tonnes valued at ₹860.31 crore against 1.04 lakh tonnes valued at ₹903.31 crore during the same period a year ago. In Nizamabad, a major spot market in AP, the price ended at 8079.65 Rupees gained 13.75 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.02% to settled at 5945 while prices down -34 rupees, now Turmeric is getting support at 8966 and below same could see a test of 8920 levels, and resistance is now likely to be seen at 9062, a move above could see prices testing 9112.

Trading Ideas:

* Turmeric trading range for the day is 8920-9112.
* Turmeric dropped as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric.
* However downside seen limited on reports of damage to the crop in Telangana and Andhra Pradesh.
* The ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year.
* In Nizamabad, a major spot market in AP, the price ended at 8079.65 Rupees gained 13.75 Rupees.
 

Jeera

Jeera yesterday settled up by 0.12% at 16190 as domestic demand is now picking up also the export inquiries to support price. However upside seen limited as better arrivals are expected in the spot market as the cumin production area in Gujarat is increasing rapidly. Cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September but are expected to improve in the coming months. Further adequate stock with traders and farmers may keeping prices under pressure at higher levels. The area under cumin in Gujarat is only 1.71 lakh hectares as against 3 lakh hectares in the same period last year, while in Rajasthan, cumin was sown in 3.20 lakh hectares. Jeera production in Syria and Turkey was limited due to bad weather, which increases demand for Indian cumin. Exports of spices from India during Apr-Sep declined 8% on year to 780,273 tn, according to data from the Spices Board India. In terms of value, exports rose 3% to 154.6 bln rupees. India exported 77,245 tn of turmeric in Apr-Sep, down 26% on year. During last two months, the prices were higher compared to last year despite sufficient stocks with traders. Sowing can see drop as farmers preferred to have other crop against Jeera. Weather in key sowing area will be crucial in next few months. In Unjha, a key spot market in Gujarat, jeera edged down by -9.85 Rupees to end at 16081.8 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -5.25% to settled at 7521 while prices up 20 rupees, now Jeera is getting support at 16145 and below same could see a test of 16105 levels, and resistance is now likely to be seen at 16240, a move above could see prices testing 16295.

Trading Ideas:

* Jeera trading range for the day is 16105-16295.
* Jeera gained as domestic demand is now picking up also the export inquiries to support price.
* However upside seen limited as better arrivals are expected in the spot market as the cumin production area in Gujarat is increasing rapidly.

* Cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September.
* In Unjha, a key spot market in Gujarat, jeera edged down by -9.85 Rupees to end at 16081.8 Rupees per 100 kg.
 

Cotton

Cotton yesterday settled up by 0.93% at 33620 amid firm demand, due to production concerns and tight supplies caused by shipping woes. Inventories at ICE US monitored depots fell to all-time lows, slumping by almost 99% this year. Meanwhile, the USDA in its December report estimated 2021/22 global production to drop by 200,000 bales as a 1.0 million bale drop in Pakistan more than offset gains in Benin, Turkey, Uzbekistan, and Cameroon. Also, world cotton ending stocks were projected 1.2 million bales lower due to lower beginning stocks, smaller production and slightly higher consumption. Mali's cotton harvest for the 2021/22 season is expected to be 731,000 tonnes, 10% below an earlier forecast due to insufficient rain in some areas and localised floods elsewhere, data from the cotton producers' association showed. In March, the government forecast that cotton production would rebound this season to 810,000 tonnes after plunging nearly 80% in 2020/21 to 147,200 tonnes because the pandemic upended demand and farmers went on strike. However upside seen limited on expectations of lower demand for garments due to the resurgence of new Omicron coronavirus variant, higher supply, and as higher prices are hurting demand for supplies from top shipper US. In spot market, Cotton gained by 480 Rupees to end at 33160 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 2.79% to settled at 6407 while prices up 310 rupees, now Cotton is getting support at 33370 and below same could see a test of 33120 levels, and resistance is now likely to be seen at 33900, a move above could see prices testing 34180.

Trading Ideas:

* Cotton trading range for the day is 33120-34180.
* Cotton gains amid firm demand, due to production concerns and tight supplies caused by shipping woes.
* Inventories at ICE US monitored depots fell to all-time lows, slumping by almost 99% this year.
* World cotton ending stocks were projected 1.2 million bales lower due to lower beginning stocks, smaller production and slightly higher consumption.
* In spot market, Cotton gained  by 480 Rupees to end at 33160 Rupees.