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Gold

Gold yesterday settled down by -0.18% at 50729 as the dollar climbed up amid rising inflation and concerns about the risk of recession pushed up the safe-haven demand for the currency. A fall in Treasury yields and an upwardly revised contraction for the US GDP in Q1 also helped the bullion. Still, the yellow metal remains under pressure from expectations of continued aggressive monetary tightening. Several Fed policymakers have been advocating for rapid interest rate hikes to bring down high inflation while the ECB is set to start raising rates next month for the first time in 11 years. As farmers are spending more on seeds, agrochemicals and other farm activities for the ongoing kharif season, rural demand for gold slipped by a quarter in June and the trend is likely to continue in July, industry executives said. Prices of agricultural inputs have gone up this kharif season, putting pressure on the pockets of the agrarian community. "Rural demand is down 25% in June as farmers are busy in sowing kharif crop and buying seeds and other agricultural inputs. July will also be similar. The demand will return in August during Ganesh Chaturthi," said Ashish Pethe, chairman, All India Gem & Jewellery Domestic Council. Russia will look to export gold to other countries after the United States introduced a ban on imports of Russian gold. Technically market is under long liquidation as market has witnessed drop in open interest by -2.83% to settled at 11172 while prices down -93 rupees, now Gold is getting support at 50530 and below same could see a test of 50332 levels, and resistance is now likely to be seen at 51036, a move above could see prices testing 51344.

Trading Ideas:
* Gold trading range for the day is 50332-51344.
* Gold dropped as the dollar climbed up amid rising inflation and concerns about the risk of recession pushed up the dollar
* A fall in Treasury yields and an upwardly revised contraction for the US GDP in Q1 also helped the bullion.
* Rural gold demand dips as spend on farm inputs rises

Silver

Silver yesterday settled down by -0.67% at 59791 as the Fed and other major central banks around the world raise interest rates to tackle inflation threatening further the global economy. At the same time, investors worry about global growth amid the war in Europe, and persistent supply chain issues. The U.S. economy contracted in the first quarter amid a record trade deficit, the government confirmed, but that picture is misleading as domestic demand was strong. Gross domestic product fell at a 1.6% annualized rate last quarter, the government said in its third GDP estimate. That was revised down from the 1.5% pace of decline reported last month. The economy grew at a robust 6.9% pace in the fourth quarter. The decline in GDP last quarter also reflected a slower pace of inventory accumulation by businesses relative to the fourth quarter's brisk rate due to supply-chain dislocations and worker shortages. There is a risk U.S. Federal Reserve interest rate increases will slow the economy too much, but the bigger risk is persistent inflation that starts to let public expectations about prices drift higher, Fed chair Jerome Powell said. "The clock is kind of running on how long will you remain in a low-inflation regime ... The risk is that because of the multiplicity of shocks you start to transition into a higher inflation regime and our job is to literally prevent that from happening and we will prevent that from happening," Powell said. Technically market is under fresh selling as market has witnessed gain in open interest by 19.04% to settled at 16069 while prices down -402 rupees, now Silver is getting support at 59401 and below same could see a test of 59011 levels, and resistance is now likely to be seen at 60355, a move above could see prices testing 60919.

Trading Ideas:
* Silver trading range for the day is 59011-60919.
* Silver dropped as the Fed and other major central banks around the world raise interest rates to tackle inflation threatening further the global economy.
* At the same time, investors worry about global growth amid the war in Europe, and persistent supply chain issues.
* Record trade deficit weighs on U.S. economy in first quarter.

Crude oil

Crude oil yesterday settled down by -0.43% at 8774 as fears of an economic slowdown driven by central banks’ aggressive action to combat surging inflation weighed on oil markets. Major producers Saudi Arabia and UAE are at, or very close to, near-term capacity limits, while political unrest in Libya and Ecuador threatened to tighten supply further. Meanwhile, the OPEC meeting ended without any policy changes and the OPEC+ meeting tomorrow is also expected to show no changes. OPEC and OPEC+ begin a series of two-day meetings with sources saying chances of a big policy change look unlikely this month. At its last meeting in early June OPEC+ decided to speed up production cuts and to raise output each month by 648,000 barrels per day (bpd) in July and August, up from earlier increases of 432,000 bpd. OPEC+ consists of OPEC and allies such as Russia. Washington welcomed OPEC's decision, which came after months of pressure from the West on OPEC+ to raise production to help cool off oil prices, which soared as a result of sanctions on Russia for the invasion of Ukraine. However, prices kept rising due to tight supply and worries that OPEC is coming close to running out of spare capacity to raise output any further. Technically market is under long liquidation as market has witnessed drop in open interest by -10.37% to settled at 7222 while prices down -38 rupees, now Crude oil is getting support at 8671 and below same could see a test of 8569 levels, and resistance is now likely to be seen at 8945, a move above could see prices testing 9117.

Trading Ideas:
* Crude oil trading range for the day is 8569-9117.
* Crude oil dropped as fears of an economic slowdown driven by central banks’ aggressive action to combat surging inflation weighed
* Saudi Arabia and UAE are at, or very close to, near-term capacity limits, while political unrest in Libya and Ecuador threatened to tighten supply further.
* OPEC+ begins policy debate as capacity constraints loom

Natural Gas

Nat.Gas yesterday settled down by -2.78% at 517.1 on expectations last week's storage build will be near normal despite hotter than usual weather as the Freeport liquefied natural gas export plant left more fuel available for utilities to stockpile for next winter. Prices dropped despite a drop in daily output this week and hotter weather forecasts through early July. Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 95.1 billion cubic feet per day (bcfd) so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. On a daily basis, output was on track to drop 2.1 bcfd over the past four days to a preliminary two-week low of 94.0 bcfd on Wednesday after hitting a six-month high of 96.1 bcfd on Saturday. Preliminary data, however, is often revised higher later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.2 bcfd this week to 95.5 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Tuesday. Open interest in NYMEX futures fell to its lowest since July 2016 for a second day in a row as investors continued to cut back on risky assets. Technically market is under long liquidation as market has witnessed drop in open interest by -1.89% to settled at 3744 while prices down -14.8 rupees, now Natural gas is getting support at 504.7 and below same could see a test of 492.3 levels, and resistance is now likely to be seen at 535.5, a move above could see prices testing 553.9.

Trading Ideas:
* Natural gas trading range for the day is 492.3-553.9.
* Natural gas fell on expectations last week's storage build will be near normal despite hotter than usual weather.
* Prices dropped despite a drop in daily output this week and hotter weather forecasts through early July.
* Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 95.1 bcfd so far in June from 95.2 bcfd in May.

Copper

Copper yesterday settled down by -0.06% at 704.55 as investors weighed the likelihood of rapid interest rate hikes hurting economic growth and metals demand. Industrial metals have tumbled alongside stock markets as central bankers stepped up talk of action to contain decades-high inflation. COVID restrictions have disrupted manufacturing in China, the biggest metals consumer, but a poll showed that factory activity there likely expanded in June for the first time in four months. In a positive sign for metals demand, homebuilder China Vanke Co said the troubled Chinese property market has bottomed in the short term. China's central bank said it will step up the implementation of prudent monetary policy and keep liquidity reasonably ample, as part of its efforts to strengthen support for the real economy amid slowing economic growth. Slowing global growth, high-running inflation, persistent geopolitical conflicts and domestic COVID outbreaks have pressured the Chinese economy, the People's Bank of China said in a statement, following the conclusion of the quarterly meeting of its monetary policy committee. The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in April was 2.155 million tonnes while consumption was 2.152 million tonnes, the ICSG said. Technically market is under long liquidation as market has witnessed drop in open interest by -0.61% to settled at 5389 while prices down -0.4 rupees, now Copper is getting support at 696 and below same could see a test of 687.3 levels, and resistance is now likely to be seen at 711.4, a move above could see prices testing 718.1.

Trading Ideas:
* Copper trading range for the day is 687.3-718.1.
* Copper dropped as investors weighed the likelihood of rapid interest rate hikes hurting economic growth and metals demand.
* China c.bank promises to step up implementation of prudent monetary policy
* The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March

Zinc

Zinc yesterday settled down by -0.35% at 299.75 as fears over a global economic slowdown, higher interest rates and weak economic readings kept investors on the edge. Although amid cooling market sentiment, while the market confidence may be boosted by loosening pandemic control measures in China, which is worth of attention. China's economy has recovered to some extent, but its foundation is not solid, state media quoted Premier Li Keqiang as saying. U.S. Federal Reserve policymakers promised further rapid interest-rate hikes to bring down high inflation, but pushed back against growing fears among investors and economists that higher borrowing costs will trigger a steep downturn. U.S. consumer confidence fell sharply in June as worries about rapid inflation left consumers anticipating that economic growth would weaken significantly in the second half of the year. The global zinc market moved to a surplus of 10,900 tonnes in April from a revised deficit of 31,700 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,300 tonnes in March. During the first four months of 2022, ILZSG data showed a deficit of 13,000 tonnes versus a surplus of 83,000 tonnes in the same period of 2021. Technically market is under fresh selling as market has witnessed gain in open interest by 0.76% to settled at 1595 while prices down -1.05 rupees, now Zinc is getting support at 297.4 and below same could see a test of 294.9 levels, and resistance is now likely to be seen at 302.7, a move above could see prices testing 305.5.

Trading Ideas:
* Zinc trading range for the day is 294.9-305.5.
* Zinc dropped as fears over a global economic slowdown, higher interest rates and weak economic readings kept investors on the edge.
* Although cooling market sentiment, while the market confidence may be boosted by loosening pandemic control measures in China
* China's economy has recovered to some extent, but its foundation is not solid, state media quoted Premier Li Keqiang as saying.
 

Aluminium

Aluminium yesterday settled down by -0.63% at 211.4 on profit booking as China’s domestic inventory is more likely to see an increase amid the current supply and demand. Nonetheless, market sentiment is expected to pick up with the loosening the pandemic controls. China's central bank said it will step up the implementation of prudent monetary policy and keep liquidity reasonably ample, as part of its efforts to strengthen support for the real economy amid slowing economic growth. Slowing global growth, high-running inflation, persistent geopolitical conflicts and domestic COVID outbreaks have pressured the Chinese economy, the People's Bank of China said in a statement, following the conclusion of the quarterly meeting of its monetary policy committee. Some Japanese aluminium buyers have agreed at least with two global producers to pay a premium of $148 a tonne over the benchmark price for July-September shipments, down 14% from the current quarter, two sources directly involved in the pricing talks said. The figure is lower than the $172 per tonne paid in the April-June quarter and marks a third consecutive quarterly drop. It is also below initial offers of $172-$177 made by producers. Aluminium stocks at three major Japanese ports rose 4.5% to 359,400 tonnes at the end of May from 344,000 tonnes at the end of April, Marubeni Corp said. Technically market is under long liquidation as market has witnessed drop in open interest by -1.81% to settled at 2720 while prices down -1.35 rupees, now Aluminium is getting support at 209.7 and below same could see a test of 208 levels, and resistance is now likely to be seen at 212.9, a move above could see prices testing 214.4.

Trading Ideas:
* Aluminium trading range for the day is 208-214.4.
* Aluminium on profit booking as China’s domestic inventory is more likely to see an increase amid the current supply and demand.
* Nonetheless, market sentiment is expected to pick up with the loosening the pandemic controls.
* China c.bank promises to step up implementation of prudent monetary policy

Mentha oil

Mentha oil yesterday settled up by 0.74% at 1023.8 amid low production this season and improving demand post-pandemic. Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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 we forecast 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil dropped by -18.1 Rupees to end at 1126.5 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -0.5% to settled at 1203 while prices up 7.5 rupees, now Mentha oil is getting support at 1013.6 and below same could see a test of 1003.5 levels, and resistance is now likely to be seen at 1031.4, a move above could see prices testing 1039.1.

Trading Ideas:
* Mentha oil trading range for the day is 1003.5-1039.1.
* In Sambhal spot market, Mentha oil dropped  by -18.1 Rupees to end at 1126.5 Rupees per 360 kgs.
* Mentha oil gained amid low production this season and improving demand post-pandemic.
* Synthetic Mentha supply remains uninterrupted.
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.

Turmeric

Turmeric yesterday settled down by -0.89% at 7828 amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8000.35 Rupees dropped -107.95 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.06% to settled at 14910 while prices down -70 rupees, now Turmeric is getting support at 7640 and below same could see a test of 7452 levels, and resistance is now likely to be seen at 7982, a move above could see prices testing 8136.

Trading Ideas:
* Turmeric trading range for the day is 7452-8136.
* Turmeric dropped amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%.
* In Nizamabad, a major spot market in AP, the price ended at 8000.35 Rupees dropped -107.95 Rupees.

Jeera

Jeera yesterday settled down by -0.84% at 21190 on profit booking after prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving. Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 31,802.25 in April 2021 showing a decline of 66%. In the month of March 2022 around 14,595.43 tonnes cumin seed exported as against 35,159.96 in March 2021 showing a decline of 141%. Cumin production in Rajasthan and Gujarat remained nearly 90 lakh bags (55 kg per bag). This year expected cumin production of hardly around 55 lakh bags in the country. In Unjha, a key spot market in Gujarat, jeera edged down by -1.25 Rupees to end at 21500.5 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.53% to settled at 10824 while prices down -180 rupees, now Jeera is getting support at 20985 and below same could see a test of 20775 levels, and resistance is now likely to be seen at 21450, a move above could see prices testing 21705.

Trading Ideas:
* Jeera trading range for the day is 20775-21705.
* Jeera dropped on profit booking after prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low.
* Currently, steady demand seen from Bangladesh and due to Bakri-Eid in July further increase in demand is expected.
* On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving.
* In Unjha, a key spot market in Gujarat, jeera edged down by -1.25 Rupees to end at 21500.5 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 3.42% at 43560 tracking firmness in ICE cotton prices as the United States Department of Agriculture's report showed that 37% of the cotton crop was in a good-to-excellent condition in the week ending June 26. That compares with 52% for the same period a year ago. Meanwhile, heavy rain will be possible along portions of the Texas coast later this week, the U.S. National Hurricane Center said. Speculators cut net long position in cotton futures by 1,485 contracts to 42,786 in the week to June 21, data from the Commodity Futures Trading Commission showed. Cotton sowing fall nearly 14.76% with 31.83 lakh hectares of area sown against area of 37.37 lakh hectares in 2021. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. Kharif cotton sowing for the season in Gujarat is likely to increase by at least 15% compared to the previous season amid a rush to sow the crop well ahead of its schedule. Farmers had got good prices for cotton in domestic and international markets last season. Indian Meteorological Department (IMD) in its forecast for next five days has said gradual maximum temperature is likely to rise by 2-4 degree centigrade over most parts of northwest India and Madhya Pradesh. In spot market, Cotton gained by 320 Rupees to end at 45480 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.44% to settled at 1576 while prices up 1440 rupees, now Cotton is getting support at 42440 and below same could see a test of 41320 levels, and resistance is now likely to be seen at 44240, a move above could see prices testing 44920.

Trading Ideas:
* Cotton trading range for the day is 41320-44920.
* Cotton gains tracking firmness in ICE cotton prices as the USDA report showed a small percent of crops rated as good.
* India’s Cotton sowing fall nearly 14.76% with 31.83 lakh hectares of area sown against area of 37.37 lakh hectares in 2021.
* Speculators cut net long position in cotton futures by 1,485 contracts to 42,786 in the week to June 21, data from the CFTC showed
* In spot market, Cotton gained  by 320 Rupees to end at 45480 Rupees.

-www.kediaadvisory.com

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