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Gold

Gold yesterday settled down by -0.36% at 48067 as global equities bounced from omicron-driven lows. Investors assessed the impact of soaring omicron cases and prospects of higher interest rates. The U.S. current account deficit surged to a 15-year high in the third quarter amid a record increase in imports as businesses rushed to replenish depleted inventories. The Commerce Department said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, accelerated 8.3% to $214.8 billion last quarter. That was the biggest shortfall since the third quarter of 2006. India continued to heavily rely on imports to meet its domestic requirements for gold with imports making up 86% of its total supply during 2016-2020, the World Gold Council said. Mining and recycling activity accounted for only 1% and 13%, respectively, WGC said in its Bullion Trade in India report. The country imported 6,581 tn of gold in the last 10 years (2010-2020), averaging 730 tn a year, it said. The share of dore in gold import rose to 29% in 2020 against 11% in 2014 on account of lower duty. Global gold exchange-traded funds saw inflows of 13.6 tn, or $838 mln, in November, the World Gold Council said in a report. Technically market is under long liquidation as market has witnessed drop in open interest by -1.09% to settled at 8462 while prices down -173 rupees, now Gold is getting support at 47940 and below same could see a test of 47812 levels, and resistance is now likely to be seen at 48247, a move above could see prices testing 48426.

Trading Ideas:

* Gold trading range for the day is 47812-48426.

* Gold prices eased as global equities bounced from omicron-driven lows.

* Investors assessed the impact of soaring omicron cases and prospects of higher interest rates.

* Commodities markets on worries over a rapid surge in coronavirus cases

Silver

Silver yesterday settled up by 0.63% at 61805 as a dip in the U.S. dollar and risks posed to global economic growth from a surge in the Omicron variant cases burnished the metal's safe-haven appeal. However, concerns about the Omicron coronavirus variant still lingered amid tighter curbs in Europe and elsewhere that threatened to swamp the global economy ahead of the New Year. The U.S. current account deficit surged to a 15-year high in the third quarter amid a record increase in imports as businesses rushed to replenish depleted inventories. The Commerce Department said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, accelerated 8.3% to $214.8 billion last quarter. That was the biggest shortfall since the third quarter of 2006. Developments related to the omicron variant of the coronavirus remained in focus, with Moderna announcing that a booster dose of its Covid-19 vaccine increased antibody levels against Omicron. The currently authorized 50 microgram booster dose increased neutralizing antibody levels against Omicron approximately 37-fold compared to pre-boost levels. Technically market is under short covering as market has witnessed drop in open interest by -4.55% to settled at 11504 while prices up 388 rupees, now Silver is getting support at 61258 and below same could see a test of 60711 levels, and resistance is now likely to be seen at 62354, a move above could see prices testing 62903.

Trading Ideas:

* Silver trading range for the day is 60711-62903.

* Silver firmed as a dip in U.S. dollar and risks posed to global economic growth from a surge in Omicron variant cases burnished the metal's safe-haven appeal.

* The U.S. current account deficit surged to a 15-year high in the third quarter

* The Netherlands imposed a nationwide lockdown and several European countries are weighing the possibility of more Covid restrictions being introduced

Crude oil

Crude oil yesterday settled up by 5.3% at 5421 as investors' appetite for risk improved, although they remained cautious amid the rapid spread of the Omicron coronavirus variant across the globe. OPEC+ compliance with oil production cuts rose to 117% in November from 116% a month earlier, two sources from the group told, indicating production levels remain well below agreed targets. Compliance from the 10 OPEC countries participating in the production cuts reached 122%, with participating non-OPEC countries achieving 107%, data showed. Countries across Europe were considering new curbs on movement as the fast-moving Omicron variant swept the world days before Christmas, throwing travel plans into chaos and unnerving financial markets. On the supply front, OPEC+ compliance with oil production cuts rose to 117% in November from 116% a month earlier, two sources from the group told Reuters, indicating production levels remain well below agreed targets. In the United States, crude oil inventories were expected to have fallen for a fourth consecutive week, while distillate and gasoline stockpiles likely rose last week. Money managers cut their net long U.S. crude futures and options positions in the week to December 14, the U.S. Commodity Futures Trading Commission (CFTC) said. Technically market is under short covering as market has witnessed drop in open interest by -2.04% to settled at 5753 while prices up 273 rupees, now Crude oil is getting support at 5247 and below same could see a test of 5074 levels, and resistance is now likely to be seen at 5511, a move above could see prices testing 5602.

Trading Ideas:

* Crude oil trading range for the day is 5074-5602.

* Crude oil prices rebounded as investors' appetite for risk improved

* Libya suspended crude exports from two of its ports after militias shut down the nation’s biggest field days before an election

* OPEC+ produces below target in November as compliance rises

Nat.Gas

Nat.Gas yesterday settled up by 2.28% at 296 on forecasts for colder weather that could result in higher heating demand over the next two weeks and a jump in European gas prices that should keep U.S. liquefied natural gas (LNG) exports near record highs. Refinitiv projected average U.S. gas demand, including exports, would rise from 109.7 billion cubic feet per day last week to 123.7 bcfd this week before easing to 120.1 bcfd next week. Data provider Refinitiv estimated 413 heating degree days (HDDs) over the next two weeks in the lower 48 U.S. states, up from the 401 HDDs estimated. The normal is 426 HDDs for this time of year. 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). However, mostly mild weather since mid-November has kept heating demand low and allowed utilities to leave so much gas in storage that there will soon be more of the fuel in stockpiles than is usual for the time of year for the first time since April. The amount of gas flowing to U.S. LNG export plants has averaged 11.9 bcfd so far in December, now that the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana is producing LNG. Technically market is under short covering as market has witnessed drop in open interest by -18.39% to settled at 4652 while prices up 6.6 rupees, now Natural gas is getting support at 285.2 and below same could see a test of 274.3 levels, and resistance is now likely to be seen at 303, a move above could see prices testing 309.9.
 

Trading Ideas:

* Natural gas trading range for the day is 274.3-309.9.

* Natural gas rose on forecasts for colder weather that could result in higher heating demand over the next two weeks.

* The U.S. EIA said utilities pulled 88 bcf of gas from storage during the week ended Dec. 10.

* US natural gas production to hit new monthly record high in 2022, EIA reports

Copper

Copper yesterday settled up by 1.09% at 746.4 alongside oil prices and stock markets as investors weighing up the impact of the Omicron coronavirus variant on economic growth turned a little more bullish after two days of selling. A Peruvian community blocking a road used by MMG Ltd's Las Bambas copper mine will attend a government-brokered meeting set for Tuesday, a representative said, backtracking from a previous decision to boycott it. "In order to stop people from demonizing the communities as uncompromising, it's been decided to attend the meeting," said Victor Villa, a legal adviser for residents of Chumbivilcas, whose month-long blockade forced Las Bambas to suspend production last week. The Omicron coronavirus variant is multiplying rapidly across Europe, the United States and Asia, raising the risk of economically damaging measures to contain its spread. On-warrant copper stocks in LME-registered warehouses are at 80,000 tonnes, up from a historic low of 14,150 tonnes in October but far below recent peaks. Stocks in Shanghai Futures Exchange (ShFE) warehouses, at 34,580 tonnes, are the lowest since 2009 and inventories in Chinese bonded warehouses have plunged. Miners are braced for tighter environmental rules after President-elect Gabriel Boric pledged to oppose a $2.5 billion iron-copper mine approved in August. Technically market is under fresh buying as market has witnessed gain in open interest by 6.8% to settled at 2936 while prices up 8.05 rupees, now Copper is getting support at 741.7 and below same could see a test of 737.1 levels, and resistance is now likely to be seen at 749.2, a move above could see prices testing 752.1.

Trading Ideas:

* Copper trading range for the day is 737.1-752.1.

* Copper rose alongside oil prices as investors weighing up the impact of the Omicron coronavirus variant on economic growth turned a little more bullish.

* Peru community to attend mine blockade meet in reversal of decision

* Inventories of copper in LME-registered warehouses declined to 80,550 tonnes.

Zinc

Zinc yesterday settled up by 2.45% at 286 helped by a weaker dollar and concerns over tight supply, as demand for the industrial metal was forecast to get a boost from China's easy monetary policy. However upside seen limited as fears mounted that the spread of the Omicron coronavirus variant would hinder global economic recovery. The Netherlands has imposed restrictions to slow its spread and Germany was considering measures to contain the virus, triggering fears other countries would follow and put the brakes on economic activity. Nyrstar's Auby zinc operations will be placed on care and maintenance from the first week of January 2022 in response to significantly higher current and projected future power prices in France, the company said. The global zinc market deficit declined to 6,100 tonnes in October from a downwardly revised shortfall of 38,400 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 44,000 tonnes in September. During the first 10 months of 2021, ILZSG data showed a deficit of 93,000 tonnes versus a surplus of 476,000 tonnes in the same period of 2020. Around 13.5 million tonnes of zinc is produced and consumed each year. Technically market is under fresh buying as market has witnessed gain in open interest by 1.89% to settled at 1458 while prices up 6.85 rupees, now Zinc is getting support at 281 and below same could see a test of 275.9 levels, and resistance is now likely to be seen at 289.1, a move above could see prices testing 292.1.

Trading Ideas:

* Zinc trading range for the day is 275.9-292.1.

* Zinc rose helped by a weaker dollar and concerns over tight supply

* Kazakhstan's January-November production of refined zinc rose 4.5% 14.7% respectively

* President Joe Biden's $1.75 trillion domestic investment bill was dealt a potentially fatal blow after a key senator said he would not support it.

Nickel

Nickel yesterday settled up by 1.12% at 1542.5 as demand for the industrial metal was forecast to get a boost from China's easy monetary policy. On the macro front, Chuck Schumer, the Senate majority leader, suggested the Senate will vote early next year on President Joe Biden's sweeping $1.75 trillion policy bill as well as on voting rights; while Democratic senator Manchin vowed to vote against the bill, which may bring critical blow to the voting result. China imported 4.01 million mt of nickel ore and its concentrate in November, a decrease of 10% from the previous month and a year-on-year increase of 12%, According to General Administration of Customs. Imports from the Philippines, which remained the largest supplier, stood at 3.34 million mt, down 17% month on month but up 12% year on year. China’s copper NPI imports stood at 290,000 mt in November, down 3% month on month and 25% year on year. The global nickel market saw a small surplus of 5,000 tonnes in October compared with a shortfall of 3,100 tonnes a month earlier, data from the International Nickel Study Group (INSG) showed. During the first 10 months of the year, there was a deficit in the nickel market of 165,500 tonnes compared with a surplus of 88,500 tonnes in the same period last year, Lisbon-based INSG added. Technically market is under short covering as market has witnessed drop in open interest by -2.27% to settled at 1205 while prices up 17.1 rupees, now Nickel is getting support at 1534.4 and below same could see a test of 1526.3 levels, and resistance is now likely to be seen at 1547.3, a move above could see prices testing 1552.1.

Trading Ideas:

* Nickel trading range for the day is 1526.3-1552.1.

* Nickel prices rose as demand for the metal was forecast to get a boost from China's easy monetary policy.

* China imported 4.01 million mt of nickel ore and its concentrate in November, a decrease of 10% from the previous month

* Global nickel market swings into small surplus in Oct – INSG

Aluminium

Aluminium yesterday settled up by 2.94% at 222.5 as prices are getting support after the news that supply remained at a low level, while the demand side performed well. Hence the aluminium inventory kept dropping. However, SHFE aluminium is unlikely to hit highs recently due to slowing inventory decline and falling alumina prices. The market shall watch the sustainability of aluminium demand. Global primary aluminium output fell 0.22% year on year in November to 5.497 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production dropped to 3.16 million tonnes in November 2021 from 3.207 million in the same month of last year, the IAI said. China's aluminium imports have hit an annual record high this year with a month to spare, customs data showed, as restrictions on power usage by domestic smelters underpin demand for overseas metal. Arrivals of unwrought aluminium and products – which include primary metal and unwrought, alloyed aluminium – totalled 397,915 tonnes in ovember, up 34% from 297,043 tonnes in October and up 109.3% year-on-year. That was the highest monthly total since August 2020 and took imports for the first 11 months of the year to 2.97 million tonnes, beating the previous annual record of 2.7 million tonnes in 2020. Technically market is under short covering as market has witnessed drop in open interest by -6.2% to settled at 1392 while prices up 6.35 rupees, now Aluminium is getting support at 218.5 and below same could see a test of 214.3 levels, and resistance is now likely to be seen at 224.8, a move above could see prices testing 226.9.

Trading Ideas:

* Aluminium trading range for the day is 214.3-226.9.

* Aluminium gained as prices are getting support after the news that supply remained at a low level, while the demand side performed well.

* However, SHFE aluminium is unlikely to hit highs recently due to slowing inventory decline and falling alumina prices.

* Global aluminium output dips 0.2% y/y to 5.497 mln T in November – IAI

Mentha oil

Mentha oil yesterday settled down by -0.39% at 972.7 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 40.3 Rupees to end at 1113.7 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -9.63% to settled at 685 while prices down -3.8 rupees, now Mentha oil is getting support at 963.2 and below same could see a test of 953.7 levels, and resistance is now likely to be seen at 986.1, a move above could see prices testing 999.5.

Trading Ideas:

* Mentha oil trading range for the day is 953.7-999.5.

* In Sambhal spot market, Mentha oil gained  by 40.3 Rupees to end at 1113.7 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 down by -0.45% at 9310 as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric. However, downside seen limited due to heavy rainfall, the minimum crop damage has gone to 40% to 50% in producing parts of Maharashtra, Telangana and Andhra. Support also as the demand from exporters is good. Spices Board has set a target of 33 per cent increase in turmeric exports to 183000 tonnes on a year-on-year basis in the financial year 2020-21. At the same time, the government estimates that turmeric production may be 1.11 million tonnes in 2020-21, which was 1.15 million tonnes a year ago. Turmeric all India production for 2022 is estimated at 4.89 lakh MT. Last year’s production was 4.46 lakh MT, up by 9.64% from last year. 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. Exports of jeera during Apr-Sep declined 14% on year to 139,295 tn, from 162,033 tn a year ago. There were also reports of export demand from Europe, Gulf countries and Bangladesh. The areas where turmeric has been sown have received adequate rainfall and are expected to produce well in the next season. In Nizamabad, a major spot market in AP, the price ended at 8090.9 Rupees gained 33 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 3.04% to settled at 6620 while prices down -42 rupees, now Turmeric is getting support at 9256 and below same could see a test of 9202 levels, and resistance is now likely to be seen at 9378, a move above could see prices testing 9446.

Trading Ideas:

* Turmeric trading range for the day is 9202-9446.

* Turmeric dropped as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric.

* However, downside seen limited due to heavy rainfall, the minimum crop damage has gone to 40% to 50%.

* At the same time, the government estimates that turmeric production may be 1.11 million tonnes in 2020-21, which was 1.15 million tonnes a year ago.

* In Nizamabad, a major spot market in AP, the price ended at 8090.9 Rupees gained 33 Rupees.

Jeera

Jeera yesterday settled up by 0.18% at 16345 as domestic demand is now picking up also the export inquiries to support price. Cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September but are expected to improve in the coming months. Further adequate stock with traders and farmers may keeping prices under pressure at higher levels. The area under cumin in Gujarat is only 1.71 lakh hectares as against 3 lakh hectares in the same period last year, while in Rajasthan, cumin was sown in 3.20 lakh hectares. Jeera production in Syria and Turkey was limited due to bad weather, which increases demand for Indian cumin. Exports of spices from India during Apr-Sep declined 8% on year to 780,273 tn, according to data from the Spices Board India. In terms of value, exports rose 3% to 154.6 bln rupees. India exported 77,245 tn of turmeric in Apr-Sep, down 26% on year. During last two months, the prices were higher compared to last year despite sufficient stocks with traders. Sowing can see drop as farmers preferred to have other crop against Jeera. Weather in key sowing area will be crucial in next few months. The export of cumin is increasing continuously and in the coming days there are signs of increasing the export of cumin in a big way. In Unjha, a key spot market in Gujarat, jeera edged up by 140.9 Rupees to end at 16195.45 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -5.69% to settled at 8655 while prices up 30 rupees, now Jeera is getting support at 16225 and below same could see a test of 16100 levels, and resistance is now likely to be seen at 16510, a move above could see prices testing 16670.

Trading Ideas:

* Jeera trading range for the day is 16100-16670.

* Jeera prices remained supported as domestic demand is now picking up also the export inquiries to support price.

* Cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September

* The area under cumin in Gujarat is only 1.71 lakh hectares as against 3 lakh hectares in the same period last year

* In Unjha, a key spot market in Gujarat, jeera edged up by 140.9 Rupees to end at 16195.45 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.83% at 31770 amid reports heavy rains in November damaged cotton crop over 44,200 ha cotton has been affected in Andhra Pradesh. World cotton production for the 2021/22 season is poised for a full comeback from a disappointing 2020/21 season, led by the United States, the International Cotton Advisory Committee said in its annual report. It forecast 2021/22 output at 25.71 million tonnes, a 6.01% increase from 2020/21. USDA weekly export sales report showed net sales of 286,400 running bales, down 25% from the previous week but about 5% higher compared with the prior 4-week average. Increases were primarily for China. In its monthly balance sheet for November 2021, the CAI has estimated total cotton supply at 154.76 lakh bales of 170 kgs each, which consists of the arrivals of 77.76 lakh bales of 170 kgs each, imports of 2 lakh bales of 170 kgs each during the month of November 2021 and Opening Stock of 75 lakh bales of 170 kgs each at the beginning of the season on 1st October 2021. Further, the CAI has estimated cotton consumption for the months of October and November 2021 at 55.83 lakh bales of 170 kgs each while export shipment of cotton during the months of October and November 2021 is estimated at 7.00 lakh bales of 170 kgs each. In spot market, Cotton dropped by -80 Rupees to end at 31750 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -10.42% to settled at 2546 while prices up 260 rupees, now Cotton is getting support at 31610 and below same could see a test of 31440 levels, and resistance is now likely to be seen at 31940, a move above could see prices testing 32100.

Trading Ideas:

* Cotton trading range for the day is 31440-32100.

* Cotton gained amid reports heavy rains in November damaged cotton crop over 44,200 ha cotton has been affected in Andhra Pradesh.

* World cotton production for the 2021/22 season is poised for a full comeback from a disappointing 2020/21 season, led by the United States.

* USDA weekly export sales report showed net sales of 286,400 running bales, down 25% from the previous week

* In spot market, Cotton dropped  by -80 Rupees to end at 31750 Rupees.

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