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Gold

Gold yesterday settled down by -1.8% at 51023 as an elevated dollar and solidifying bets for an aggressive interest rate hike from the U.S. Federal Reserve pushed the non-yielding bullion to its lowest in a week. The Fed may still be able to lower inflation without a sharp rise in unemployment even as it continues raising interest rates, Chicago Fed president Charles Evans said, a rebuttal to arguments the U.S. central bank is pushing the world and the United States towards a potentially sharp downturn. The nonfarm payrolls report showed that the US economy added 263,000 jobs in September, above expectations of 250,000 and adding room for the Federal Reserve to maintain the aggressive hiking momentum that it pledged. Cleveland Federal Reserve Bank President Loretta Mester said she believes the U.S. unemployment rate will likely rise a little bit as the Fed raises rates, but that won't stop the central bank from pursuing "job one" of fighting inflation. Physical gold prices flipped to a discount in India as elevated local rates amid a dive in the rupee dampened festive demand, with higher prices playing spoilsport across other Asian hubs as well. India fulfils most of its gold demand through imports, which are becoming expensive with the rupee at record lows. Technically market is under long liquidation as the market has witnessed a drop in open interest by -9.31% to settle at 16996 while prices are down -937 rupees, now Gold is getting support at 50721 and below same could see a test of 50419 levels, and resistance is now likely to be seen at 51505, a move above could see prices testing 51987.

Trading Ideas:

* Gold trading range for the day is 50419-51987.
* Gold prices fell as an elevated dollar and solidifying bets for an aggressive interest rate hike from the U.S. Federal Reserve
* Fed fund futures are now pricing in a 92% chance of a 75-basis-point hike at the next Fed meeting.
* The nonfarm payrolls report showed that the US economy added 263,000 jobs in September, above expectations of 250,000
 

Silver

Silver yesterday settled down by -2.77% at 59102 as dollar index strengthened for a fourth consecutive session to above 113, as investors continue to bet the Federal Reserve will press ahead with its aggressive tightening plans. The jobs report last week showed a stronger-than-expected payrolls number, continuing to point to a strong labour market. This week, the US inflation report, FOMC minutes, and appearances from several policymakers this week should continue to reinforce Fed's commitment to its fight against inflation. Also, Cleveland Fed Bank President Loretta Mester said the Fed has to be “singularly focused on inflation,” echoing remarks from other central bank officials who sounded unequivocally committed to bringing down inflation with more rate hikes, even at the cost of higher unemployment and weaker growth. Investors now look ahead to next week's inflation report for more clues on the central bank’s rate hike path. U.S. employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%, pointing to a tight labor market which keeps the Federal Reserve on its aggressive monetary policy tightening campaign for a while. Though the two-percentage point decline in the jobless rate from 3.7% in August was partly because of people leaving the workforce, the Labor Department's closely watched employment report also showed fewer Americans working part-time for economic reasons last month. Technically market is under fresh selling as the market has witnessed a gain in open interest by 19.42% to settle at 14628 while prices are down -1683 rupees, now Silver is getting support at 58606 and below same could see a test of 58109 levels, and resistance is now likely to be seen at 59800, a move above could see prices testing 60497.

Trading Ideas:

* Silver trading range for the day is 58109-60497.
* Silver dropped as dollar index strengthened for a fourth consecutive session to above 113
* Investors continue to bet the Federal Reserve will press ahead with its aggressive tightening plans.
* U.S. job growth strong in September as labor market forges ahead

Crude oil

Crude oil yesterday settled down by -0.39% at 7597 as investors looked to slowing economic activity in China, the world's biggest crude importer, which revived concerns about a global recession and falling global fuel demand. The OPEC+ cuts, which come ahead of a European Union embargo on Russian oil, will squeeze supply in an already tight market. EU sanctions on Russian crude and oil products will take effect in December and February, respectively. Rising tension between Washington and Beijing following the announcement of new U.S. export controls targeting Chinese companies also added to growing concerns about a possible global recession triggered by numerous central banks raising interest rates to combat high inflation rates. China has issued the first batch of crude oil import quotas for 2023, mainly to independent refiners. The total volume issued is about 20 million tonnes. Last month, Beijing issued a third batch of quotas for 2022 that raised its non-state import quotas to 164.61 million tonnes this year. Urals and Siberian Light oil loadings from the Black Sea port of Novorossiisk were set at 2.84 million tonnes for October, up from 2.6 million tonnes in September. On a daily basis October oil loadings from the port will rise 5.7% from September. Technically market is under long liquidation as the market has witnessed a drop in open interest by -23.74% to settle at 9228 while prices are down -30 rupees, now Crude oil is getting support at 7522 and below same could see a test of 7447 levels, and resistance is now likely to be seen at 7692, a move above could see prices testing 7787.

Trading Ideas:

* Crude oil trading range for the day is 7447-7787.
* Crude oil prices fell as weak service sector data from China coupled with news of lockdowns in parts of the country fueled concerns about demand.
* China releases first batch of 2023 crude oil import quotas
* The OPEC+ cuts, which come ahead of a European Union embargo on Russian oil, will squeeze supply in an already tight market.

Nat.Gas

Nat.Gas yesterday settled down by -4% at 542.1 on record output, continued milder than normal weather and forecasts for less demand this week than previously expected. Also weighing on gas prices was a drop in demand from power outages due to storms and reduced liquefied natural gas (LNG) exports. Gas demand was also reduced by outages at LNG export plants, including Berkshire Hathaway Energy's 0.8-billion cubic feet per day (bcfd) Cove Point in Maryland for about three weeks of planned work starting Oct. 1 and Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 100.1 bcfd so far in October from a monthly record of 99.4 bcfd in September. With cooler weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 89.9 bcfd this week to 91.4 bcfd next week and 93.7 bcfd in two weeks. The forecast for this week was lower than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants fell to 10.8 bcfd so far in October from 11.5 bcfd in September. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. Technically market is under fresh selling as the market has witnessed a gain in open interest by 39.98% to settle at 8105 while prices are down -22.6 rupees, now Natural gas is getting support at 530.1 and below same could see a test of 518.2 levels, and resistance is now likely to be seen at 562.2, a move above could see prices testing 582.4.

Trading Ideas:

* Natural gas trading range for the day is 518.2-582.4.
* Natural gas fell on record output, continued milder than normal weather and forecasts for less demand this week than previously expected.
* Also weighing on gas prices was a drop in demand from power outages due to storms and reduced liquefied natural gas (LNG) exports.
* EIA said utilities added a seasonal record of 129 billion cubic feet (bcf) of gas to storage during the week ended Sept. 30.
 

Copper

Copper yesterday settled up by 0.89% at 657 after top producer Chile permanently closed mining stopes connected to the giant sinkhole that appeared in the northern part of the country in July. Chile’s environmental regulator filed charges related to the sinkhole against Canada’s Lundin Mining Corp which owns 80% of the property, while the remaining 20% is held by Japan’s Sumitomo Metal Mining and Sumitomo Corp. Meanwhile, copper prices declined more than 4% in the past two sessions on expectations that the US Federal Reserve will continue to raise interest rates aggressively, with better-than-expected US jobs data and hawkish remarks from US policymakers cementing such view. Elsewhere, liquidity for the metal is expected to pick up as Chinese traders return from a week-long holiday. The Caixin China General Composite PMI tumbled to 48.5 in September 2022 from 53 in the prior month, pointing to the lowest reading since May, as the Chinese economy facing more downward pressure recently due to several unfavorable factors. The drop in private sector activity was broad-based across the manufacturing and service sectors, with the former seeing the steeper rate of fall. New orders shrank, amid a renewed drop in services sector sales while new work declined at a quicker pace at goods producers. Employment also fell, and at the steepest rate since February 2021. Technically market is under short covering as the market has witnessed a drop in open interest by -13.07% to settle at 5036 while prices are up 5.8 rupees, now Copper is getting support at 650.4 and below same could see a test of 643.7 levels, and resistance is now likely to be seen at 662, a move above could see prices testing 666.9.

Trading Ideas:

* Copper trading range for the day is 643.7-666.9.
* Copper rises on Chile mining closures
* However, upside seen limited on expectations that Fed will continue to raise interest rates aggressively.
* The Caixin China General Composite PMI tumbled to 48.5 in September 2022 from 53 in the prior month

Zinc

Zinc yesterday settled down by -0.58% at 275.25 on profit booking amid a chorus of hawkish Federal Reserve speakers buoyed the dollar. Several Fed officials reinforced the view that the central bank was nowhere near done with its hiking cycle, fanning worries about a recession that could dampen demand for metals. Concerns over top consumer China's economy will also keep the metal under pressure until the government eases its strict COVID-19 restrictions. Glencore said it would place its Nordenham smelter in Germany on care and maintenance from Nov. 1, and the LME restricted new deliveries from a Russian mining company. Foreign exchange reserves in China declined by $26 billion to $3.029 trillion in September of 2022, the lowest since March of 2017 and compared to market forecasts of $3 trillion. It was the second straight month of decreases mainly due to general dollar strength on expectations the Federal Reserve will continue aggressive policy tightening and global recession fears. The global zinc market moved to a deficit of 72,800 tonnes in July from a surplus of 34,600 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 1,400 tonnes in June. Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.14% to settle at 1901 while prices are down -1.6 rupees, now Zinc is getting support at 273.2 and below same could see a test of 271.1 levels, and resistance is now likely to be seen at 278, a move above could see prices testing 280.7.

Trading Ideas:

* Zinc trading range for the day is 271.1-280.7.
* Zinc prices dropped on profit booking amid a chorus of hawkish Federal Reserve speakers buoyed the dollar.
* Several Fed officials reinforced the view that the central bank was nowhere near done with its hiking cycle, fanning worries about a recession
* Concerns over top consumer China's economy will also keep the metal under pressure until the government eases its strict COVID-19 restrictions.

Aluminium

Aluminium yesterday settled down by -1.78% at 200.9 as concerns about an economic recession and manufacturing slowdown took a front seat. Alcoa, the largest US aluminum producer, has recently warned investors that high energy and raw material costs and a fall in aluminum prices are putting pressure on margins. Century Aluminum, the second largest domestic producer, announced in June that it would close one of its US plants and lay off over 600 workers due to rising energy costs. Putting a floor under prices were fears of further supply disruptions after the London Metal Exchange said it would restrict new supplies of Russian metal. Foreign exchange reserves in China declined by $26 billion to $3.029 trillion in September of 2022, the lowest since March of 2017 and compared to market forecasts of $3 trillion. It was the second straight month of decreases mainly due to general dollar strength on expectations the Federal Reserve will continue aggressive policy tightening and global recession fears. The premium for aluminium shipments to Japanese buyers for October to December was set at $99 a tonne, down 33% from the previous quarter, reflecting weak demand and ample inventories. The figure is lower than the $148 per tonne paid in the July-September quarter and marks a fourth consecutive quarterly drop. Technically market is under long liquidation as the market has witnessed a drop in open interest by -18.55% to settle at 3904 while prices are down -3.65 rupees, now Aluminium is getting support at 199.5 and below same could see a test of 198 levels, and resistance is now likely to be seen at 203.6, a move above could see prices testing 206.2.

Trading Ideas:
* Aluminium trading range for the day is 198-206.2.
* Aluminum dropped as concerns about an economic recession and manufacturing slowdown took a front seat.
* Alcoa, has recently warned investors that high energy and raw material costs and a fall in aluminum prices are putting pressure on margins.
* Putting a floor under prices were fears of further supply disruptions after LME said it would restrict new supplies of Russian metal.
 

Mentha oil

Mentha oil yesterday settled down by -0.9% at 988.4 as Synthetic Mentha supply remains uninterrupted. However, downside seen limited 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 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. Mentha exports during Apr-July 2022 has dropped by 19.63 percent at 648.49 tonnes as compared to 806.87 tonnes exported during Apr-July 2021. In the month of July 2022 around 155.04 tonnes Mentha was exported as against 113.33 tonnes in June 2022 showing a rise of 36.80. In the month of July 2022 around 155.04 tonnes of Mentha was exported as against 283.33 tonnes in July 2021 showing a decline of over 45.28%. In the month of June 2022 around 113.33 tonnes Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 46%. In Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil gained by 3.4 Rupees to end at 1133.1 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.53% to settle at 1346 while prices are down -9 rupees, now Mentha oil is getting support at 984.4 and below same could see a test of 980.3 levels, and resistance is now likely to be seen at 996.2, a move above could see prices testing 1003.9.

Trading Ideas:

* Mentha oil trading range for the day is 980.3-1003.9.
* In Sambhal spot market, Mentha oil gained  by 3.4 Rupees to end at 1133.1 Rupees per 360 kgs.
* Mentha oil dropped as Synthetic Mentha supply remains uninterrupted.
* However, downside seen limited amid low production this season and improving demand post-pandemic.
* In the month of July 2022 around 155.04 tonnes Mentha was exported as against 113.33 tonnes in June 2022 showing a rise of 36.80.
 

Turmeric

Turmeric yesterday settled up by 0.73% at 7218 on low level buying on expectation of rise in festival demand amidst dwindling supplies in the market. Slower pace of arrivals amid active buying by local trader is likely to keep market sentiments up for turmeric. Arrivals has been dropped by 26% Y-o-Y due to lower production as about 11248 tonnes of turmeric arrived at APMC mandies across India in Sep’22 compared to 15758 tonnes of previous year for corresponding month. As per estimates, Turmeric all India sowing area for 2022 is estimated at 1.70 lakh hectares as compared to last year 1.66 lakh hectares, up by 2.44%. In Maharashtra, sowing area likely to go up as Turmeric spot prices were higher during the time of sowing compared to last year same period. Turmeric exports during Apr-July 2022 has rose by 17.72 percent at 62,245.73 tonnes as compared to 52,875.44 tonnes exported during Apr-July 2021. In the month of July 2022 around 12,810.36 tonnes turmeric was exported as against 18,532.00 tonnes in June 2022 showing a drop of 30.87%. 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 7197.1 Rupees gained 93.55 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 11.29% to settle at 8875 while prices are up 52 rupees, now Turmeric is getting support at 7126 and below same could see a test of 7032 levels, and resistance is now likely to be seen at 7290, a move above could see prices testing 7360.

Trading Ideas:

* Turmeric trading range for the day is 7032-7360.
* Turmeric rose on low level buying on expectation of rise in festival demand amidst dwindling supplies in the market.
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In the month of July 2022 around 12,810.36 tonnes turmeric was exported as against 18,532.00 tonnes in June 2022 showing a drop of 30.87%.
* In Nizamabad, a major spot market in AP, the price ended at 7197.1 Rupees gained 93.55 Rupees.

 

Jeera

Jeera yesterday settled up by 1.56% at 24725 as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices in coming months. Arrivals also observed to be less during the month. Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month supported by decrease in arrivals in Rajasthan as well as in Gujarat. Jeera exports during Apr-July 2022 has dropped by 37.28 percent at 67,057.16 tonnes as compared to 1,06 ,929.72 tonnes exported during Apr-July 2021. In the month of July 2022 around 19,866.18 tonnes jeera was exported as against 21,587.63 tonnes in June 2022 showing a drop of 7.97%. In the month of July 2022 around 19,866.18 tonnes of jeera was exported as against 24,167.64 tonnes in June 2021 showing a decrease of 17.80%. In the month of June 2022 around 21,587.63 tonnes of jeera was exported as against 30,989.86 tonnes in June 2021 showing a decrease of 30.34%. 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 down by -94.25 Rupees to end at 24144.55 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 28% to settle at 4512 while prices are up 380 rupees, now Jeera is getting support at 24375 and below same could see a test of 24020 levels, and resistance is now likely to be seen at 25025, a move above could see prices testing 25320.

Trading Ideas:

* Jeera trading range for the day is 24020-25320.
* Jeera seen supported as supply was observed to be less as farmers and stockists were holding stocks
* Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month
* 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 down by -94.25 Rupees to end at 24144.55 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 3.96% at 34660 as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions. However upside seen limited as worries of an imminent recession dampened demand for the natural fiber crop. Cotton output is expected to rebound from last years’ experience of unseasonal rain affecting the crop. Production this year is seen at 341.9 lakh bales (170 kg) against 312.03 lakh bales last year. Pakistan’s cotton production has shrunk 19% to 2.19 million bales till September 15, 2022 in the current season mainly due to the devastation caused by heavy rainfall and flash floods nationwide. In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg. Ginning mills have started buying seed cotton with the advent of the auspicious festival of Navratri. However, spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival. In its monthly supply-demand report, the 2022/23 U.S. cotton projections include higher beginning stocks, production, exports and ending stocks this month, the USDA's report said. Additionally, the 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. In spot market, Cotton gained by 190 Rupees to end at 33870 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -12.32% to settle at 605 while prices are up 1320 rupees, now Cotton is getting support at 33930 and below same could see a test of 33190 levels, and resistance is now likely to be seen at 35040, a move above could see prices testing 35410.

Trading Ideas:

* Cotton trading range for the day is 33190-35410.
* Cotton rose as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions.
* In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg.
* Spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival.
* In spot market, Cotton gained  by 190 Rupees to end at 33870 Rupees.
 

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