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Gold

Gold yesterday settled down by -0.42% at 47839 as a stronger U.S. dollar and increased appetite for riskier assets depressed sentiment. Investors are waiting to see if the U.S. Federal Reserve will hike interest rates three times in the coming year, central bank policies would also be a market driver in 2022. Bond markets remain circumspect and have yet to be convinced that the Fed can deliver its hawkish pivot without derailing the U.S. economic recovery, if Treasury yields rose as expected in 2022, that should erode the appeal of bullion. The import statistics published by the Gem and Jewellery Export Promotion Council (GJEPC) indicates that the country's gold bar imports witnessed notable surge during the initial nine-month period (April '21-November '21) this fiscal year. The combined gold bar imports during the first nine months of the current fiscal year totaled $1,504.16 million. The imports skyrocketed by 167.33%, upon comparison with the imports that had totalled just $563.92 million during the corresponding nine-month period of the previous fiscal year. 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 long liquidation as market has witnessed drop in open interest by -0.12% to settled at 8595 while prices down -203 rupees, now Gold is getting support at 47606 and below same could see a test of 47374 levels, and resistance is now likely to be seen at 48041, a move above could see prices testing 48244.

Trading Ideas:

* Gold trading range for the day is 47374-48244.
* Gold eases as dollar and equities climb
* Federal Reserve could raise interest rates as early as March
* Investors assessing risks to global economic growth from rising cases of the Omicron coronavirus variant.

Silver

Silver yesterday settled down by -1.08% at 61838 as the dollar index climbed to a one-week high, mainly on the back of the yen's slump. The safe-haven yen touched a one-month low as worries over the spread of Covid-19 and a tightening of restrictions sapped a multi-day rally in equity markets. Coronavirus cases in France jumped to a record high of 179,807, a day after the government announced new restrictions to contain infections. The U.S. trade deficit in goods mushroomed to a record in November as imports surged and exports slipped. The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said. That exceeds the previous record deficit set in September of $97 billion. Goods exports declined 2.1%, while imports rose by 4.7%. The report also showed wholesale inventories climbed 1.2% last month. The economy grew at a 2.3% annualized rate in the third quarter, a step-down from earlier in the year but activity has rebounded in the fourth quarter. Remittances to the Asia Pacific region from citizens working abroad could grow 6.7% this year and 5.9% next year, after a 2% slump in 2020, underpinned by further easing of COVID-19 curbs in advanced economies, the Asian Development Bank said. Technically market is under fresh selling as market has witnessed gain in open interest by 17.76% to settled at 12352 while prices down -676 rupees, now Silver is getting support at 61268 and below same could see a test of 60699 levels, and resistance is now likely to be seen at 62528, a move above could see prices testing 63219.

Trading Ideas:

* Silver trading range for the day is 60699-63219.
* Silver dropped as the dollar index climbed to a one-week high, mainly on the back of the yen's slump.
* The safe-haven yen touched a one-month low as worries over the spread of Covid-19 and a tightening of restrictions sapped a multi-day rally in equity markets
* U.S. goods trade deficit hits a record in November

Crude oil

Crude oil yesterday settled up by 0.35% at 5703 as investors welcome signs the omicron variant is less severe than initially expected while fresh API data showed US crude inventories fell for a 5th consecutive week. Russian Deputy Prime Minister Alexander Novak said that OPEC+ has resisted calls from Washington to boost output because it wants to provide the market with clear guidance and not deviate from policy on gradual output increases. Russian Deputy Prime Minister Alexander Novak said that OPEC+ group of largest oil producers has resisted calls from Washington to boost output because it wants to provide the market with clear guidance and not deviate from policy. The United States has repeatedly pushed OPEC+ to accelerate output hikes as U.S. gasoline prices soared and President Joe Biden's approval ratings slid. Russia is unlikely to hit its May target of pre-pandemic oil output levels due to a lack of spare production capacity but could do so later in the year. Deputy Prime Minister Alexander Novak, in charge of Moscow's ties with the OPEC+ group of oil producers, has said output by May is expected to hit pre-pandemic levels, or about 11.33 million barrels per day (bpd) of oil and gas condensate, as seen in April 2020. The outlook for energy demand turned a bit positive amid hopes the Omicron variant of the coronavirus is unlikely to any significantly impact global economic recovery. Technically market is under fresh buying as market has witnessed gain in open interest by 1.11% to settled at 8445 while prices up 20 rupees, now Crude oil is getting support at 5635 and below same could see a test of 5568 levels, and resistance is now likely to be seen at 5772, a move above could see prices testing 5842.

Trading Ideas:

* Crude oil trading range for the day is 5568-5842.
* Crude oil gained as investors welcome signs the omicron variant is less severe than initially expected while data showed US crude inventories fell.
* Russia says OPEC+ prioritises mid – term strategy over U.S. calls for more oil
* U.S. crude, gasoline and distillate stocks fell last week – API

Nat.Gas

Nat.Gas yesterday settled up by 1.91% at 298.7 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 short covering as market has witnessed drop in open interest by -14.99% to settled at 5314 while prices up 5.6 rupees, now Natural gas is getting support at 290.9 and below same could see a test of 283 levels, and resistance is now likely to be seen at 306.1, a move above could see prices testing 313.4.

Trading Ideas:

* Natural gas trading range for the day is 283-313.4.
* 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 -0.49% at 746.15 as the omicron variant kept spreading all over the world, and the confirmed COVID cases increased day after day, which kept the market on edge. China Smelters Purchase Team (CSPT) finalised the guidance TC/RC for spot copper concentrate in Q1 2022 at $70/mt or $0.07/lb, up 32% from the same period in 2021. On the fundamentals, the copper ore supply demonstrated upside potential, and improved from the previous periods. However, the supply of blister copper was still tight, putting pressures on the smelters coupled with steeply falling sulphuric acid. And the rush work by the year-end historical seen in the previous years did not come this year, hence the supply of refined copper will rise only limitedly. The falling copper inventory offered some support to SHFE copper though the downstream demand was sluggish. The Philippines has lifted a four-year-old ban on open-pit mining for copper, gold, silver and complex ores, an official said, marking the second landmark policy move this year as the government tries to revitalize the industry. Environment and Natural Resources Secretary Roy Cimatu has signed an administrative order lifting the ban, Mines and Geosciences Bureau Director Wilfredo Moncano said. Technically market is under fresh selling as market has witnessed gain in open interest by 1.23% to settled at 3801 while prices down -3.7 rupees, now Copper is getting support at 743.1 and below same could see a test of 739.8 levels, and resistance is now likely to be seen at 749.3, a move above could see prices testing 752.2.

Trading Ideas:

* Copper trading range for the day is 739.8-752.2.
* Copper dropped as the omicron variant kept spreading all over the world, and the confirmed COVID cases increased day after day
* China's top copper smelters kept floor treatment and refining charges for copper concentrate in the first quarter of 2022 flat from the previous quarter.
* Philippines ends open-pit mining ban to reinvigorate industry

Zinc

Zinc yesterday settled down by -0.75% at 286.15 as a whole approaching the year-end, with sluggish market transactions. Some downstream companies planned to suspend the production in light of the environmental protection incident in the north. The market kept worrying about the supply side amid surging electricity prices in the Europe and low LME inventory. The market shall keep an eye on the meeting pertaining to natural gas held between the US and Russia at the beginning of next year. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -18.78% to settled at 1782 while prices down -2.15 rupees, now Zinc is getting support at 283.5 and below same could see a test of 280.8 levels, and resistance is now likely to be seen at 288.4, a move above could see prices testing 290.6.

Trading Ideas:

* Zinc trading range for the day is 280.8-290.6.
* Zinc prices dropped as a whole approaching the year-end, with sluggish market transactions.
* Some downstream companies planned to suspend the production in light of the environmental protection incident in the north.
* The market kept worrying about the supply side amid surging electricity prices in the Europe and low LME inventory.

Nickel

Nickel yesterday settled up by 0.73% at 1562 amid a calm dollar, low inventories and expectations that policy easing in China would boost demand for industrial metals. 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. 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. Technically market is under fresh buying as market has witnessed gain in open interest by 22.27% to settled at 2070 while prices up 11.3 rupees, now Nickel is getting support at 1535.2 and below same could see a test of 1508.5 levels, and resistance is now likely to be seen at 1576.5, a move above could see prices testing 1591.1.

Trading Ideas:

* Nickel trading range for the day is 1508.5-1591.1.
* Nickel gained amid a calm dollar, low inventories and expectations that policy easing in China would boost demand
* Indonesian President Joko Widodo inaugurated a new ferronickel plant with 1.8 million tonne output capacity in southeast Sulawesi province
* The nickel sulphate market was still pessimistic, and NPI demand rose limitedly amid maintenance plans of steel mills.
 

Aluminium

Aluminium yesterday settled down by -0.64% at 225.8 as the aluminium output in China rose slowly amid small-scale production resumption in Yunnan and Inner Mongolia. On the macro front, the omicron variant kept spreading all over the world, and the confirmed COVID cases increased day after day, which kept the market on edge. The European Union will place tariffs on aluminium foil from China. The levy is based on the anti-dumping measures against Chinese aluminium foil on December 8. The comprehensive tariff is 16.1%-46.7%. Companies including Nanshan Aluminium, Jiangsu Zhongji, Xiamen Xiashun, etc. will be affected. 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 -15.91% to settled at 2437 while prices down -1.45 rupees, now Aluminium is getting support at 222.5 and below same could see a test of 219.1 levels, and resistance is now likely to be seen at 227.9, a move above could see prices testing 229.9.

Trading Ideas:

* Aluminium trading range for the day is 219.1-229.9.
* Aluminium dropped as the aluminium output in China rose slowly amid small-scale production resumption in Yunnan and Inner Mongolia.
* China aims to lower carbon emissions in the aluminium.
* The omicron variant kept spreading all over the world, and the confirmed COVID cases increased day after day, which kept the market on edge.
 

Mentha oil

Mentha oil yesterday settled down by -0.44% at 988.2 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 gained by 0.2 Rupees to end at 1094.2 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 1.33% to settled at 913 while prices down -4.4 rupees, now Mentha oil is getting support at 983.5 and below same could see a test of 978.9 levels, and resistance is now likely to be seen at 994.2, a move above could see prices testing 1000.3.

Trading Ideas:

* Mentha oil trading range for the day is 978.9-1000.3.
* In Sambhal spot market, Mentha oil gained  by 0.2 Rupees to end at 1094.2 Rupees per 360 kgs.
* Mentha oil 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 up by 0.29% at 9040 on good domestic and export demand, besides fears of heavy rains having affected the new crop due next month. However upside seen limited as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric. 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 8071.15 Rupees dropped -8.5 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -4.29% to settled at 5690 while prices up 26 rupees, now Turmeric is getting support at 8912 and below same could see a test of 8782 levels, and resistance is now likely to be seen at 9140, a move above could see prices testing 9238.

Trading Ideas:

* Turmeric trading range for the day is 8782-9238.
* Turmeric gained 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.
* However upside seen limited as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric.
* In Nizamabad, a major spot market in AP, the price ended at 8071.15 Rupees dropped -8.5 Rupees.

Jeera

Jeera yesterday settled down by -0.4% at 16125 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. However downside seen limited as domestic demand is now picking up also the export inquiries to support price 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 -6.8 Rupees to end at 16075 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -1.99% to settled at 7371 while prices down -65 rupees, now Jeera is getting support at 16060 and below same could see a test of 16000 levels, and resistance is now likely to be seen at 16190, a move above could see prices testing 16260.

Trading Ideas:

* Jeera trading range for the day is 16000-16260.
* Jeera dropped as better arrivals are expected in the spot market as the cumin production area in Gujarat is increasing rapidly.
* Further adequate stock with traders and farmers may keeping prices under pressure at higher levels.
* 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.
* In Unjha, a key spot market in Gujarat, jeera edged down by -6.8 Rupees to end at 16075 Rupees per 100 kg.
 

Cotton

Cotton yesterday settled up by 0.33% at 33730 amid firm demand and tight supplies caused by shipping woes. Inventories at ICE US monitored depots fell to all-time lows, slumping by almost 99% this year. The U.S. Department of Agriculture's weekly export sales report showed net sales of 243,900 running bales for 2021/2022, with China being the top buyer. Speculators cut net long positions in cotton futures by 9 contracts to 69,204 in the week to Dec. 21, data from the Commodity Futures Trading Commission showed. 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 spot market, Cotton dropped by -40 Rupees to end at 33120 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 4% to settled at 6663 while prices up 110 rupees, now Cotton is getting support at 33450 and below same could see a test of 33160 levels, and resistance is now likely to be seen at 33900, a move above could see prices testing 34060.

Trading Ideas:

* Cotton trading range for the day is 33160-34060.
* Cotton gained amid firm demand and tight supplies caused by shipping woes.
* The USDA’s weekly export sales report showed net sales of 243,900 running bales for 2021/2022, with China being the top buyer.
* Speculators cut net long positions in cotton futures by 9 contracts to 69,204 in the week to Dec. 21, data from the CFTC showed
* In spot market, Cotton dropped  by -40 Rupees to end at 33120 Rupees.

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