IGI Logo

Gold

Gold yesterday settled up by 0.88% at 59042 as the dollar softened and investors continued to monitor risks to the global banking sector. A probe into tax fraud and money laundering found major French banks suspect of dividend stripping, adding to the confidence crisis in the European banking sector and increasing demand for safe-haven precious metals. The closure of major US lenders and the collapse of Credit Suisse earlier in the month triggered investors to pile on safe-haven assets, lifting prices. Dovish expectations for the Federal Reserve also supported bullion prices. In its latest meeting, the FOMC projected a single quarter-point increase remaining in its hiking campaign, despite higher inflation and lower unemployment rate forecasts, underscoring greater caution amid the current fragility of the global financial sector. China's net gold imports via Hong Kong in February rose by about 192% from the previous month, Hong Kong Census and Statistics Department data showed. Net imports into the world's top gold consumer stood at 64.878 tonnes in February, compared with 22.24 tonnes in January, the data showed. Total gold imports via Hong Kong were up about 185% at 65.552 tonnes. Technically market is under short covering as the market has witnessed a drop in open interest by -32.2% to settle at 3262 while prices are up 516 rupees, now Gold is getting support at 58618 and below same could see a test of 58193 levels, and resistance is now likely to be seen at 59350, a move above could see prices testing 59657.

Trading Ideas:
* Gold trading range for the day is 58193-59657.
* Gold gains as investors continued to monitor risks to the global banking sector.
* Fed’s Bullard said that the stress in the banking sector will abate, and the Fed needs to push interest rates higher than previously expected.
* China's net gold imports via Hong Kong surge in February

Silver

Silver yesterday settled up by 0.94% at 70584 as the dollar index slipped toward 102.5, falling for the second straight session as fears over the recent banking turmoil started to fade, hurting demand for the safe-haven currency. Investors welcomed reports that First Citizens BankShares agreed to buy significant holdings of Silicon Valley Bank, while CNBC reported that outflows from small institutions to banking giants have slowed. US authorities also aimed to shore up confidence by considering an expanded emergency lending facility and assuring markets that the US banking system was “sound and resilient.” Last week, the Federal Reserve delivered a widely expected 25 basis point rate hike and hinted at only one more increase. Still, Fed Chair Jerome Powell said that officials didn’t see rate cuts for 2023 and were prepared to prolong their tightening cycle if needed. All eyes now turn to a key measure of US inflation and several speeches from Fed officials this week. Silver Institute said that silver has become an important fashion accessory among retailers, which should continue supporting demand and prices through 2023. The Silver Institute said it sees global jewelry demand falling by 10% as the Indian market "normalizes" in 2023. The Silver Institute said it also sees weaker demand in the U.S. due to growing concerns over the economy. Technically market is under fresh buying as the market has witnessed a gain in open interest by 4.88% to settle at 14164 while prices are up 658 rupees, now Silver is getting support at 69871 and below same could see a test of 69157 levels, and resistance is now likely to be seen at 70983, a move above could see prices testing 71381.

Trading Ideas:
* Silver trading range for the day is 69157-71381.
* Silver gains as dollar slips towards 102.50
* Further steady outflows in bullion inventories supported the metal's prices, fueling concerns about low silver availability.
* The Silver Institute said it sees global jewelry demand falling by 10% as the Indian market "normalizes" in 2023.

Crude oil

Crude oil yesterday settled up by 1.34% at 6058 on supply concerns and indications of strengthening demand. Oil prices also drew support from indications of strong Chinese demand. U.S. crude oil stockpiles were seen rising about 200,000 barrels last week. Turkey stopped pumping crude from Kurdistan via a pipeline following an arbitration decision that confirmed Baghdad’s consent was needed to ship the oil. China's crude oil imports will average 10.8 million barrels per day (bpd) in 2023, matching the previous record high from 2020, according to the think tank of the country's leading energy group. Imports will rise 6.2% from last year to 540 million tonnes, while refinery processing will gain 7.8% to 733 million tonnes, equivalent to 14.66 million bpd, China National Petroleum Corporation's Economics and Technology Research Institute (ETRI) said in its annual industry outlook. The forecasts are largely in line with those of private analysts, who have tipped a rebound in China's fuel consumption as the world's second-largest economy reopens after ending its strict zero-COVID policy late last year. The ETRI forecast is for crude oil imports to rise by 630,000 bpd in 2023, which is below the 900,000 bpd expected by the International Energy Agency, but above estimates from some analysts, such as Wood Mackenzie and S&P Global Commodity Insights. Technically market is under short covering as the market has witnessed a drop in open interest by -5.03% to settle at 7210 while prices are up 80 rupees, now Crude oil is getting support at 5976 and below same could see a test of 5895 levels, and resistance is now likely to be seen at 6111, a move above could see prices testing 6165.

Trading Ideas:
* Crude oil trading range for the day is 5895-6165.
* Crude oil prices rose amid supply concerns
* China's 2023 crude oil imports set for 6.2% rise, but risks prevail
* Iraqi Kurdistan region's oil output at risk after Turkey halts pipeline exports

Nat.Gas

Nat.Gas yesterday settled down by -1.51% at 182.2 pressured by persistently weak demand due to above-normal temperatures and ample inventories. Working stocks in underground storage amounted to 1,900 billion cubic feet on March 17, according to the EIA, the highest for the time of year since 2020. Meanwhile, natural gas flows to LNG export plants have been on track to hit record highs after Freeport LNG's export plant in Texas became operational again. Still, Freeport LNG unexpectedly canceled some cargoes due to issues with one of the plant's three liquefaction trains, sparking some worries that it could take longer than the company expects to return to full service. Natural gas inventories are nearing the end of winter well above average, causing futures prices to slump close to their lowest level in real terms in three decades. Despite several days of shattering cold immediately before Christmas, the winter was fairly mild across the main population centres of the United States, depressing gas consumption. Working stocks in underground storage amounted to 1,900 billion cubic feet on March 17, according to the U.S. Energy Information Administration (EIA), the highest for the time of year since 2020 and before that 2017. Technically market is under fresh selling as the market has witnessed a gain in open interest by 19.43% to settle at 40101 while prices are down -2.8 rupees, now Natural gas is getting support at 179.6 and below same could see a test of 176.9 levels, and resistance is now likely to be seen at 186.7, a move above could see prices testing 191.1.

Trading Ideas:
* Natural gas trading range for the day is 176.9-191.1.
* Natural gas dropped pressured by persistently weak demand due to above-normal temperatures and ample inventories
* Average gas output in the U.S. Lower 48 states rose to 98.5 bcfd so far in March from 98.1 bcfd in February.
* Working stocks in underground storage amounted to 1,900 billion cubic feet on March 17, the highest for the time of year since 2020

Copper

Copper yesterday settled up by 0.08% at 776.35 as the People's Bank of China officially lowered RRR, which is expected to release 600 billion yuan of funds. Copper inventories in Shanghai Futures Exchange warehouses have slumped to 161,152 tonnes from 252,455 tonnes in late February as demand has recovered. Still, looming threats of low supply kept copper prices nearly 7% higher year-to-date. Mining exports from major producer Peru sank almost 20% annually in January due to the widespread protests, while inventories at the Shanghai Futures Exchange tumbled 36% since their peak in February. Depleting stocks worldwide drove key commodity trader Trafigura to forecast copper prices will reach a record high this year, while supply and demand imbalances led Goldman Sachs to expect the global shortage of visible copper inventories by September. Key commodities trader Trafigura forecasts copper prices will hit a record high this year, while Goldman Sachs predicts a global shortfall of visible copper stockpiles by September due to depleting supplies worldwide. According to the International Copper Study Group's (ICSG) latest monthly report, the world's refined copper market had a 103,000 tonne surplus in January, up from a 10,000 tonne surplus the previous month. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.76% to settle at 3912 while prices are up 0.65 rupees, now Copper is getting support at 773.5 and below same could see a test of 770.5 levels, and resistance is now likely to be seen at 779.5, a move above could see prices testing 782.5.

Trading Ideas:
* Copper trading range for the day is 770.5-782.5.
* Copper gains as PBOC lowered RRR, expected to release 600 billion yuan of funds
* Copper inventories at the Shanghai Futures Exchange tumbled 36% since their peak in February.
* S&P: Our growth prediction of 5.5% for China this year is higher than the country's aim of roughly 5%.

Zinc

Zinc yesterday settled up by 0.62% at 257.65 as power rationing in Yunnan still persists as some enterprises in Wenshan have also received notices of power restriction. Chinese spot treatment charges for zinc concentrate slipped from their highest in more than two years in March and will likely fall further on high smelter utilisation rates and a demand recovery in its biggest consuming market. An over-supplied zinc concentrate market in China had pushed spot treatment charges (TCs) to 5,100 yuan ($742) a tonne in January-February, as miners were prepared to pay more for smelters to process the excess of material into refined metal. SHFE inventories of refined zinc surged 582% from December 2022 to 123,894 tonnes by March 10, exchange data showed, correlating with the ramp-up at smelters. The global zinc market deficit fell to 18,300 tonnes in January from a revised deficit of 80,300 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 100,500 tonnes in December. The deficit of 18,300 tonnes in January compares with a surplus of 15,000 tonnes in the same month last year, ILZSG data showed. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.76% to settle at 2677 while prices are up 1.6 rupees, now Zinc is getting support at 255.9 and below same could see a test of 254.2 levels, and resistance is now likely to be seen at 258.8, a move above could see prices testing 260.

Trading Ideas:
* Zinc trading range for the day is 254.2-260.
* Zinc gains as power rationing in Yunnan still persists
* China's zinc treatment charges fall from multi – year high as smelters ramp up
* Global zinc market deficit slides to 18,300 T in January – ILZSG

Aluminium

Aluminium yesterday settled up by 0.58% at 207.65 as consumption continued to pick up, driving domestic aluminium ingot social inventory to fall rapidly. On the fundamentals, the resumption of production by aluminium smelters in Sichuan, Guizhou and other places has led to a slight recovery on the supply side. The aluminium ingot social inventories across China’s eight major markets stood at 1.13 million mt as of March 23, down 85,000 mt from a week ago and 47,000 mt from Monday March 20. The figure, albeit up 85,000 mt from the same period last year, has fallen 143,000 mt from the peak recorded in early March. Stocks across three major markets dropped sharply, led by south China, where fewer cargoes arrived following output cuts by smelters earlier while demand recovered. After two weeks of accumulation, the domestic aluminium billet social inventory dipped 1,500 mt from a week ago to 167,900 mt as of March 23. Stable aluminium billet production ensured smooth arrivals. More billets flowed to Foshan instead of Wuxi due to widening price difference between the two regions. The imports of unwrought aluminium alloy stood at 81,000 mt in January 2023, down 30.5% year-on-year and 12.3% month-on-month, according to General Administration of Customs. Technically market is under short covering as the market has witnessed a drop in open interest by -2.02% to settle at 2915 while prices are up 1.2 rupees, now Aluminium is getting support at 206.6 and below same could see a test of 205.4 levels, and resistance is now likely to be seen at 208.5, a move above could see prices testing 209.2.

Trading Ideas:
* Aluminium trading range for the day is 205.4-209.2.
* Aluminium gains as ingot social inventory to fall rapidly.
* China’s aluminium ingot social inventories stood at 1.13 million mt as of March 23, down 85,000 mt from a week ago
* The output for the months of January and February 2023 was 6.5 million tonnes, an increase of 5.3% on year

Mentha oil

Mentha oil yesterday settled up by 0.84% at 1003.7 on short covering after prices dropped as demand was poor due to recession fears and global banking turmoil. The collapse of California’s Silicon Valley Bank and troubles at Swiss lender Credit Suisse have shaken the financial markets and dampened the outlook for oil consumption. Market participants expect prices to remain under pressure until demand recovers and market sentiment improves. Mentha exports during Apr-Jan 2023, dropped by 13.65 percent to 2,016.77 tonnes as compared to 2,335.63 tonnes exported during Apr-Jan 2022. In January 2023 around 233.21 tonnes of Mentha was exported as against 298.38 tonnes in December 2022 showing a drop of 21.84%. In January 2023 around 233.21 tonnes of Mentha was exported as against 171.07 tonnes in January 2022 showing a rise of 36.32%. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year, production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. In Sambhal spot market, Mentha oil gained by 2.6 Rupees to end at 1178.4 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -0.51% to settle at 786 while prices are up 8.4 rupees, now Mentha oil is getting support at 992.4 and below same could see a test of 981 levels, and resistance is now likely to be seen at 1012.3, a move above could see prices testing 1020.8.

Trading Ideas:
* Mentha oil trading range for the day is 981-1020.8.
* In Sambhal spot market, Mentha oil gained  by 2.6 Rupees to end at 1178.4 Rupees per 360 kgs.
* Mentha oil gained on short covering after prices dropped as demand was poor due to recession fears and global banking turmoil.
* Mentha exports during Apr-Jan 2023, dropped by 13.65 percent to 2,016.77 tonnes
* In January 2023 around 233.21 tonnes was exported against 298.38 tonnes in December 2022 showing a drop of 21.84%.

Turmeric

Turmeric yesterday settled up by 0.64% at 6898 on good domestic and export demand. Turmeric harvesting has started in the key growing regions and farmers and stockists are releasing their stocks, in the fear of further decline in prices. In AP (Nizamabad) Turmeric market around 5,000-7,000 bags are arriving on an average daily basis. In the Erode spot market 400-600 bags are reported on a daily basis, In the Sangli district it is around 3500-7000 bags. Coupled with weak demand in the export and domestic market prices are trading at lower levels (in the current season). Turmeric exports during Apr-Jan 2023, rose by 7.76 percent at 1,36,492.59 tonnes as compared to 1,26,659.01 tonnes exported during Apr-Jan 2022. In January 2023 around 12,484.25 tonnes of turmeric was exported as against 12,039.57 tonnes in December 2022 showing a rise of 3.69%. In January 2023 around 12,484.25 tonnes of turmeric was exported as against 10,558.26 tonnes in January 2022 showing a rise of 18.24%. 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 6901.05 Rupees dropped -76.7 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -2.32% to settle at 10515 while prices are up 44 rupees, now Turmeric is getting support at 6840 and below same could see a test of 6782 levels, and resistance is now likely to be seen at 6938, a move above could see prices testing 6978.

Trading Ideas:
* Turmeric trading range for the day is 6782-6978.
* Turmeric gains on good domestic and export demand
* Farmers and stockists are releasing their stocks, in the fear of further decline in prices
* The crop is good this season despite some projection of a lower crop.
* In Nizamabad, a major spot market in AP, the price ended at 6901.05 Rupees dropped -76.7 Rupees.

Jeera

Jeera yesterday settled up by 3.12% at 35805 as unfavorable weather conditions affecting supply from main producing areas. This year, there is a stock deficit, lesser output, and increased export demand for jeera. Cumin harvests in Gujarat are now higher than last year, but recent rains are projected to lower yields by at least 20%. Gujarat produced 2.15 lakh metric tonnes (MT) of cumin in 2023. Currently, over 30% of Gujarat's crop remains unharvested in the districts of Kutch and Banaskantha. Due to unseasonal rain in certain regions, a portion of this crop is likely to be damaged or of low quality. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. One bag holds 55kg. This will result in a demand-supply imbalance. Currently, at least 70% of the crop in Rajasthan and around 30% in Gujarat have yet to be harvested. Because of the rain in both states, the total yield will be reduced. The cumin crop was destroyed by two bouts of unseasonal rainfall during the harvest season. In comparison to the planned arrival of 70 lakh bags, the stock will be reduced to 60-65 lakh bags, with a carry-forward stock of 5 lakh bags from last year. In Unjha, a key spot market in Gujarat, jeera edged up by 354.15 Rupees to end at 34373.65 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -2.17% to settle at 5544 while prices are up 1085 rupees, now Jeera is getting support at 34970 and below same could see a test of 34140 levels, and resistance is now likely to be seen at 36310, a move above could see prices testing 36820.

Trading Ideas:
* Jeera trading range for the day is 34140-36820.
* Jeera prices rose as unfavorable weather conditions affecting supply
* Support also seen amid a stock deficit, lesser output, and increased export demand for jeera
* Cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags.
* In Unjha, a key spot market in Gujarat, jeera edged up by 354.15 Rupees to end at 34373.65 Rupees per 100 kg.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer