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Gold

Gold yesterday settled up by 0.2% at 50631 tracking a dollar fall, amid expectations that US inflation has slowed once again in August, offering some momentary relief the Fed will need to deliver further big interest rate increases. On the other hand, the ECB is expected to continue to push borrowing costs higher, with sources telling Reuters the key rate will need to rise to at least 2% if inflation persists. Fed officials ended their public comment period ahead of the central bank's Sept. 20-21 policy meeting, with strong calls for another oversized rate increase to battle sky-high inflation. Gold is now down nearly 20% from this year’s high and is trading less 3% above two-year lows, having lost its appeal as a hedge against inflation and economic uncertainties due to rising interest rates and a strong dollar. The U.S. Consumer Price Index, due on Tuesday, is expected to show that August prices rose at an 8.1% pace over the year, compared with an 8.5% print for July. Markets have ramped up their expectations for a 75 basis point (bp) Fed hike this month to more than 90%. Physical gold demand in some Asian hubs remained firm as lower prices lured buyers, although an uptick in domestic rates restrained purchases in India. Technically market is under short covering as the market has witnessed a drop in open interest by -2.76% to settle at 9643 while prices are up 102 rupees, now Gold is getting support at 50412 and below same could see a test of 50194 levels, and resistance is now likely to be seen at 50814, a move above could see prices testing 50998.

Trading Ideas:

* Gold trading range for the day is 50194-50998.
* Gold gains tracking a dollar fall, amid expectations that US inflation has slowed once again in August
* ECB is expected to continue to push borrowing costs higher, with sources telling the key rate will need to rise to at least 2% if inflation persists.
* Markets eyed U.S. inflation data for further clues on Federal Reserve rate hikes
 

Silver

Silver yesterday settled up by 4.43% at 57491 as the dollar came further off a 20-year high touched a couple of sessions ago. After Fed Chair Jerome Powell delivered an uncharacteristically strong message about how the Fed plans to combat entrenched inflation, U.S. interest rate are now almost certain to go up by 75 bps at the September 20-21 Fed meeting. Chairman Powell emphasized the rhetoric that the US central bank will continue to raise interest rates to bring inflation sharply down during the Cato Institute conference The European Central Bank (ECB) raised interest rates by a record 75 basis points and signaled further hikes to tame runaway inflation. The ECB must raise interest rates further to prevent record euro-zone inflation from spilling over into wages, Governing Council member Klaas Knot said. A report released by the Commerce Department showed wholesale inventories in the U.S. increased by less than expected in the month of July. The report showed wholesale inventories rose by 0.6% in July after surging by 1.8% in June. The smaller than expected advance in wholesale inventories came as a 1% jump in inventories of durable goods was partly offset by a 0.1% dip in inventories of non-durable goods. Meanwhile, the Commerce Department said wholesale sales tumbled by 1.4% in July after leaping by 1.6% in June. Technically market is under short covering as the market has witnessed a drop in open interest by -28.69% to settle at 17436 while prices are up 2441 rupees, now Silver is getting support at 55584 and below same could see a test of 53676 levels, and resistance is now likely to be seen at 58875, a move above could see prices testing 60258.

Trading Ideas:

* Silver trading range for the day is 53676-60258.
* Silver prices climbed higher as the dollar came further off a 20-year high touched a couple of sessions ago.
* Silver hits highest since Aug. 18.
* After Fed Chair Powell comments, U.S. interest rate are now almost certain to go up by 75 bps at the September 20-21 Fed meeting.

Crude

Crude oil yesterday settled up by 0.96% at 6975 after latest threat from Russia to choke off oil and gas supplies if price caps are imposed. Reports that the Biden administration might stop dumping barrels from the U.S. Strategic Petroleum Reserve on the market after October contributed as well to oil's uptick. The Energy Information Administration (EIA) showing a large build-up of U.S. crude inventories last week. The data said crude inventories rose by 8.8 million barrels last week. A report from Baker Hughes said the number of active U.S. rigs drilling for oil fell by five to 591 this week, after seeing a decline of nine rigs last week. The total active U.S. rig count, which includes those drilling for natural gas, dropped by one to 759, the data showed. Kazakhstan's oil output, excluding condensate, fell by 13% to 1.196 million barrels per day (bpd) (5.077 million tonnes) in August from 1.378 million bpd (5.850 million tonnes) in July. The fall in output was due to a sharp decline in production in the giant Kashagan oil field after a gas leak early in August, as well as planned output curbs in the Tengiz field due to regular maintenance. Technically market is under short covering as the market has witnessed a drop in open interest by -13.02% to settle at 7115 while prices are up 66 rupees, now Crude oil is getting support at 6830 and below same could see a test of 6685 levels, and resistance is now likely to be seen at 7097, a move above could see prices testing 7219.

Trading Ideas:

* Crude oil trading range for the day is 6685-7219.
* Crude oil prices continued to find support after latest threat from Russia to choke off oil and gas supplies if price caps are imposed.
* Kazakhstan's oil output fell 13% in August vs July
* Crude inventories rose by 8.8 million barrels last week – EIA

Nat.Gas

Nat.Gas yesterday settled up by 2.86% at 657.2 on forecasts for warmer weather and higher gas demand in mid to late September. In the West, California's power grid urged customers to conserve energy for a 10th consecutive day as homes and businesses crank up air conditioners to escape a brutal heat wave lingering over the drought-stricken region since the start of September. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Refinitiv projected average U.S. gas demand, including exports, would drop from 97.4 bcfd this week to 92.9 bcfd next week as the weather cools before rising to 93.3 bcfd in two weeks as the weather warms again. The forecast for next week was lower than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants rose to 11.1 bcfd so far in September from 11.0 bcfd in August. 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. The reduction in exports from Freeport is a problem for Europe, where most U.S. LNG has gone this year as countries there wean themselves off Russian energy. Technically market is under short covering as the market has witnessed a drop in open interest by -22.34% to settle at 4101 while prices are up 18.3 rupees, now Natural gas is getting support at 632.7 and below same could see a test of 608.2 levels, and resistance is now likely to be seen at 674.8, a move above could see prices testing 692.4.

Trading Ideas:

* Natural gas trading range for the day is 608.2-692.4.
* Natural gas rose on forecasts for warmer weather and higher gas demand in mid to late September.
* The U.S. EIA said utilities added 54 billion cubic feet (bcf) of gas to storage during the week.
* U.S. natgas output and demand to hit record highs in 2022 – EIA
 

Copper

Copper yesterday settled up by 1.17% at 662.75 as risk sentiment remained supported by news that Russia had withdrawn forces from Northern Ukraine, sharply hitting safe-haven demand for the greenback that was also punched by prospects of aggressive tightening by the ECB. Last week, the red metal gained on hopes for more policy support in top metals consumer China and various supply-side risks. Workers at BHP’s Escondida in Chile, the world’s largest copper miner, is currently negotiating with local regulators after threatening an all-out strike last week due to safety concerns. The premium of LME cash copper over the three-month contract fell to $67.50 a tonne, from $108.50 a tonne in the previous session, as some tonnage was delivered into LME warehouses and eased worries over shortage of immediate supply. Supply risks of copper concentrate continued to linger after workers at Chile's Escondida, the world's largest copper mine, agreed to temporarily suspend a work stoppage planned for next week to meet with local regulators. China's copper cathode output stood at 856,500 mt in August, up 1.97% month-on-month and up 4.54% year-on-year. The copper cathode output increased in August mainly due to the production resumption of some smelters and the capacity expansion of the headquarters of Fuye. However, according to production schedules at the beginning of the month, the output in August should have been 892,100 mt. Technically market is under short covering as the market has witnessed a drop in open interest by -3.12% to settle at 5032 while prices are up 7.65 rupees, now Copper is getting support at 654.6 and below same could see a test of 646.5 levels, and resistance is now likely to be seen at 667.4, a move above could see prices testing 672.1.

Trading Ideas:

* Copper trading range for the day is 646.5-672.1.
* Copper rose as risk sentiment remained supported by news that Russia had withdrawn forces from Northern Ukraine
* Support also seen on hopes for more policy support in top metals consumer China and various supply-side risks.
* The premium of LME cash copper over the three-month contract fell to $67.50 a tonne, from $108.50 a tonne in the previous session
 

Zinc

Zinc yesterday settled up by 0.26% at 286 gained as China's refined zinc output stood at 462,700 mt in August, down 13,200 mt or 2.77% on the month and 46,200 mt or 9.07% on the year. China's refined zinc output is expected to increase by 62,900 mt to 525,700 mt in September, up 13,800 mt and 2.69% on the year. From January to September 2022, the combined refined zinc output is estimated to be 4.435 million mt, a decrease of 2.6% year on year. The output is expected to increases as smelters in Sichuan and Hunan have resumed the production after the power rationing ended. Some smelters in Gansu, Guangxi and Inner Mongolia produce normally after the maintenance. Hunan Haoyu will release the output since September and October after starting to produce. The smelter will gradually reach full production and the highest monthly output will be 5,000 mt. The decrease in output is mainly caused by the overhaul of a large-sized smelter in Xinjiang. From January to August 2022, the combined refined zinc output stood at 3.91 million mt, a decrease of 3.27% on the year. The total zinc ingot stocks across seven major markets in China stood at 96,800 mt as of September 9, down 24,900 mt week-on-week and 13,500 mt from Monday. Technically market is under short covering as the market has witnessed a drop in open interest by -5.88% to settle at 1569 while prices are up 0.75 rupees, now Zinc is getting support at 284 and below same could see a test of 282 levels, and resistance is now likely to be seen at 288.2, a move above could see prices testing 290.4.

Trading Ideas:

* Zinc trading range for the day is 282-290.4.
* Zinc gained as China's refined zinc output stood at 462,700 mt in August, down 13,200 mt or 2.77% on the month
* China's refined zinc output is expected to increase by 62,900 mt to 525,700 mt in September
* The total zinc ingot stocks across seven major markets in China stood at 96,800 mt as of September 9, down 24,900 mt week-on-week

Aluminium

Aluminium yesterday settled down by -0.15% at 199.95 as China produced 3.488 million mt of aluminium in August, up 8.16% on the year. China's producer price inflation eased to an 18-month low of 2.3 percent yoy in August 2022 from 4.2 percent in the prior month and less than market consensus of 3.1 percent. The latest figure represented the 20th straight month of slowing producer prices. On a monthly basis, producer prices declined 1.2 percent in August after falling 1.3 percent in July. Food prices in China climbed by 6.1 percent year-on-year in August 2022, slowing from a 6.3 percent rise a month earlier, which was the highest inflation in 22 months, and pointing to the fifth straight month of increase, amid imposing fresh COVID-19 restrictions in some cities to curb infections. China's annual inflation rate fell to 2.5% in August 2022 from July's 2-year high of 2.7%. The latest figure was below market forecasts of 2.8%, amid strict COVID curbs and severe heatwaves, with cost easing for both food and non-food. China produced 3.488 million mt of aluminium in August (31 calendar days), up 8.16% on the year. Although the output in Sichuan fell sharply in August, enterprises still produced some goods. Therefore, the daily output fell less significant by 112,500 mt. Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.49% to settle at 5216 while prices are down -0.3 rupees, now Aluminium is getting support at 198.7 and below same could see a test of 197.4 levels, and resistance is now likely to be seen at 201.8, a move above could see prices testing 203.6.

Trading Ideas:

* Aluminium trading range for the day is 197.4-203.6.
* Aluminium dropped as China produced 3.488 million mt of aluminium in August, up 8.16% on the year.
* China's producer price inflation eased to an 18-month low of 2.3 percent yoy in August 2022 from 4.2 percent in the prior month
* China's annual inflation rate fell to 2.5% in August 2022 from July's 2-year high of 2.7%

Mentha

Mentha oil yesterday settled down by -1.21% at 991 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 dropped by -21.1 Rupees to end at 1122.9 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.41% to settle at 1364 while prices are down -12.1 rupees, now Mentha oil is getting support at 982 and below same could see a test of 973 levels, and resistance is now likely to be seen at 1004, a move above could see prices testing 1017.

Trading Ideas:

* Mentha oil trading range for the day is 973-1017.
* In Sambhal spot market, Mentha oil dropped  by -21.1 Rupees to end at 1122.9 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 down by -0.34% at 7070 amid profit booking on report of better sowing. The Product Advisory Committee (PAC) on turmeric has rejected calls for banning futures trade in the commodity, claiming that it has not found any unusual movement in its price. As per Andhra Pradesh agricultural department, sowing activity completed around 7,958 hectares as compared to last year same period 7,764 hectares. Sufficient stocks and good sowing reports kept turmeric prices under pressure. 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%. In the month of July 2022 around 12,810.36 tonnes of turmeric was exported as against 12,826.38 tonnes in July 2021 showing a decrease of 0.12%. In the month of June 2022 around 17,532.00 tonnes of turmeric was exported as against 13,206 tonnes in June 2021 showing an increase of 40.33%. 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 7278.5 Rupees dropped -94.05 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.69% to settle at 12675 while prices are down -24 rupees, now Turmeric is getting support at 7018 and below same could see a test of 6966 levels, and resistance is now likely to be seen at 7116, a move above could see prices testing 7162.

Trading Ideas:

* Turmeric trading range for the day is 6966-7162.
* Turmeric dropped amid profit booking on report of better sowing.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* 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 7278.5 Rupees dropped -94.05 Rupees.

Jeera

Jeera yesterday settled up by 1.28% at 25335 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 -2.75 Rupees to end at 24564.7 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 7.68% to settle at 7362 while prices are up 320 rupees, now Jeera is getting support at 24965 and below same could see a test of 24590 levels, and resistance is now likely to be seen at 25555, a move above could see prices testing 25770.

Trading Ideas:

* Jeera trading range for the day is 24590-25770.
* Jeera prices 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 -2.75 Rupees to end at 24564.7 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -0.79% at 36550 as India’s Cotton sowing gained by nearly 7.34% to 126.66 lakh hectares in 2022 against an area sown of 118 lakh hectares in 2021. Cotton crops, remain under threat due to adverse weather conditions and pest attacks in major growing regions. India’s cotton output for the season 2022-23 is likely to touch 375 lakh bales (each of 170 kg), given no climatic adversities affect the crop during October, sources said. India’s Cotton sowing gained by nearly 7.34% to 126.66 lakh hectares in 2022 against an area sown of 118 lakh hectares in 2021.Atul Ganatra, President, Cotton Association of India (CAI), stated that the cotton crop condition in India was "very good and if everything goes well, we are expecting 350 lakh bales +/– 25 lakh bales." The crop size may touch 375 lakh bales if there are no rains during October. In its monthly supply-demand report, the United States Department of Agriculture (USDA) cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year. Hot and dry weather conditions in key growing areas in the United States have threatened the condition of the natural fiber crop and raised supply concerns. 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 dropped by -320 Rupees to end at 41960 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.06% to settle at 674 while prices are down -290 rupees, now Cotton is getting support at 36250 and below same could see a test of 35940 levels, and resistance is now likely to be seen at 36930, a move above could see prices testing 37300.

Trading Ideas:

* Cotton trading range for the day is 35940-37300.
* Cotton dropped as as India’s Cotton sowing gained by nearly 7.34% to 126.66 lakh hectares in 2022
* India’s cotton output for the season 2022-23 is likely to touch 375 lakh bales
* Cotton area is estimated at 126 lakh hectares till September 2 — up 8-9 per cent from 117 lakh hectares last year.
* In spot market, Cotton dropped  by -320 Rupees to end at 41960 Rupees.
 

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