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Gold

Gold yesterday settled down by -1.57% at 51302 amid pressure from imminent interest rate hikes by major central banks and an increasingly strong US dollar. The Federal Reserve cemented expectations for an extended monetary tightening path, with multiple policymakers advocating for another aggressive 75bps rate hike in July to curb surging consumer prices. At the same time, the European Central Bank pledged to start raising interest rates in July and is expected to bring its deposit interest rate to positive territory in the third quarter. Meanwhile, tighter financial conditions across major economies raised fears of a global recession, pushing investors towards the safety of the dollar and prompting a broad decline in commodity prices. India's gold imports in June nearly trebled from year-ago levels on correction in prices and as jewellers replenished inventories after robust sales during a key festival. The country had imported 49 tonnes of gold in June, compared with 17 tonnes a year earlier. In value terms, June imports surged to $2.61 billion from $969 million a year ago, he said, adding that India's gold imports still dropped to 335 tonnes in the first half of 2022 from 493 tonnes last year. Technically market is under long liquidation as market has witnessed drop in open interest by -6.79% to settled at 10222 while prices down -820 rupees, now Gold is getting support at 50941 and below same could see a test of 50581 levels, and resistance is now likely to be seen at 51970, a move above could see prices testing 52639.

Trading Ideas:
* Gold trading range for the day is 50581-52639.
* Gold dropped amid pressure from imminent interest rate hikes by major central banks and an increasingly strong US dollar.
* The Federal Reserve cemented expectations for an extended monetary tightening path
* Multiple policymakers advocating for another aggressive 75bps rate hike in July to curb surging consumer prices.

Silver

Silver yesterday settled down by -2.77% at 56865 pressured by rate hike expectations and a stronger dollar, but growing recession fears kept downside limited. Minutes of the Federal Reserve's latest policy meeting and U.S. non-farm payroll numbers will be scanned this week for indications on the pace of policy tightening. The euro slumped to a two-decade low as the latest surge in European gas prices added to worries about a recession. Investor morale across the 19-country euro zone plunged to its lowest level since May 2020, pointing toward an "inevitable" recession. A survey showed business growth across the euro zone slowed further last month, partly due to inflationary pressures. Central bank action remained in focus after the Reserve Bank of Australia raised its cash rate by 50 basis points to 1.35 percent, its third successive increase to combat inflation, and flagged more tightening ahead. The Bank of England said in its latest biannual Financial Stability Report that the global economic outlook has "deteriorated materially" and that banks should ramp up capital buffers to ensure they can weather the storm. The Fed releases the minutes of its latest policy-setting meeting on Wednesday while the minutes of the ECB's previous policy meeting are due on Thursday. Technically market is under fresh selling as market has witnessed gain in open interest by 13.73% to settled at 22477 while prices down -1623 rupees, now Silver is getting support at 56084 and below same could see a test of 55303 levels, and resistance is now likely to be seen at 58312, a move above could see prices testing 59759.

Trading Ideas:
* Silver trading range for the day is 55303-59759.
* Silver fell pressured by rate hike expectations and a stronger dollar, but growing recession fears kept downside limited.
* Minutes of Fed’s latest policy meeting and U.S. non-farm payroll numbers will be scanned this week for indications on the pace of policy tightening.
* The euro slumped to a two-decade low as the latest surge in European gas prices added to worries about a recession.

Crude oil
Crude oil yesterday settled down by -10.79% at 7781 as concerns that a global recession might hurt energy demand more than offset persistent supply-side issues. In the latest developments, Norwegian offshore workers began a strike that is expected to cut around 130,000 barrels or 6.5% of the country’s daily oil production. British Prime Minister Boris Johnson said OPEC+ must produce more oil to try to tackle a growing cost-of-living crisis and bring down prices. "There is no doubt that we are going to need a lot more OPEC+ oil," he told parliament, referring to a group that includes Saudi Arabia, Russia and other major oil producers. "The UK has ... strong and productive relations with Saudi Arabia. We need to make sure the whole of the West does as well," Johnson said, adding that Saudi Arabia needed to produce more oil. Adding to supply concerns, OPEC+ has been struggling to pump more crude due to underinvestment, capacity limits and political unrest in some member states. Meanwhile, oil came under pressure last month on signs of an impending US recession driven by the Federal Reserve's aggressive fight against inflation. Technically market is under long liquidation as market has witnessed drop in open interest by -21.87% to settled at 4938 while prices down -941 rupees, now Crude oil is getting support at 7424 and below same could see a test of 7066 levels, and resistance is now likely to be seen at 8444, a move above could see prices testing 9106.

Trading Ideas:
* Crude oil trading range for the day is 7066-9106.
* Crude oil dropped as concerns that a global recession might hurt energy demand more than offset persistent supply-side issues.
* Citi warns oil may collapse to US$65 by the year-end on recession
* OPEC+ must produce more oil, says UK PM Johnson

Natural gas 
Nat.Gas yesterday settled down by -6.39% at 433.3 as a slightly cooler shift to near term weather forecasts added to headwinds from a prolonged shutdown of Freeport LNG export plant. Freeport's gas export facility hit by fire earlier this month will not be allowed to repair or restart operations until it addresses risks to public safety, a pipeline regulator said. 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, so the expected 90-day outage would leave around 180 bcf of gas available to the U.S. market. So long as the plant remains shut, that gas will remain in the United States and allow utilities to boost the country's low stockpiles ahead of next winter. Data provider Refinitiv said gas output in the U.S. Lower 48 states held at a preliminary 95.1 bcfd on the first day of July, the same as the average for June. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.3 bcfd this week to 96.6 bcfd next week and 100.2 bcfd in two weeks. The forecasts for this week and next week were higher than Refinitiv's outlook on Thursday. Technically market is under fresh selling as market has witnessed gain in open interest by 4.93% to settled at 5254 while prices down -29.6 rupees, now Natural gas is getting support at 417.7 and below same could see a test of 402 levels, and resistance is now likely to be seen at 456.4, a move above could see prices testing 479.4.

Trading Ideas:
* Natural gas trading range for the day is 402-479.4.
* Natural gas fell as a slightly cooler shift to near term weather forecasts added to headwinds from a prolonged shutdown of Freeport LNG export plant.
* Gas output in the U.S. Lower 48 states held at a preliminary 95.1 bcfd on the first day of July, the same as the average for June.
* The U.S. EIA said utilities added 82 bcf of gas to storage during the week ended June 24.

Copper

Copper yesterday settled down by -3.5% at 651.25 as soaring inflation and tepid factory data renewed fears of aggressive rate hikes and global economic slowdown, hitting demand for metals. From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic. Euro zone inflation hit a record high in June as price pressures broadened, and its peak could still be months away, firming the case for rapid European Central Bank rate hikes starting this month. U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, signs that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve. Chile's finance minister Mario Marcel introduced a tax reform bill that increases copper mining royalties on companies that produce more than 50,000 tonnes a year and raises taxes on high-income earners. Cities in eastern China tightened COVID-19 curbs as coronavirus clusters emerge, posing a new threat to China's economic recovery under the government's strict zero-COVID policy. Global copper smelting activity declined in June, hit by a stoppage in top producer Chile, data from satellite surveillance of metal processing plants showed. Technically market is under fresh selling as market has witnessed gain in open interest by 5.29% to settled at 6603 while prices down -23.6 rupees, now Copper is getting support at 641.5 and below same could see a test of 631.8 levels, and resistance is now likely to be seen at 668.9, a move above could see prices testing 686.6.

Trading Ideas:
* Copper trading range for the day is 631.8-686.6.
* Copper dropped as soaring inflation and tepid factory data renewed fears of aggressive rate hikes and global economic slowdown, hitting demand.
* From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic.
* Global copper smelting activity declined in June, hit by a stoppage in top producer Chile

Zinc

Zinc yesterday settled down by -3.36% at 272.15 as a cocktail of factors from aggressive interest rates, a spike in COVID-19 cases in China, potential recession and rising inventories weighed on investor sentiment. Pulling down economic activity and inducing recession fears are soaring inflation and interest rate increases in many countries including the United States, where the Federal Reserve is expected to deliver another 75-basis-point increase this month. Zinc ingot social inventory across seven major markets in China stood at around 170,000 mt, down significantly from that as of last Friday. On the supply side, the SHFE/LME price ratio rose to 7.22, and the profits of imported zinc were as high as 1,137.1 yuan/mt in metal content, indicating that the import window for overseas ores has opened. From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic. The global zinc market moved to a surplus of 10,900 tonnes in April from a revised deficit of 31,700 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,300 tonnes in March. During the first four months of 2022, ILZSG data showed a deficit of 13,000 tonnes versus a surplus of 83,000 tonnes in the same period of 2021. Technically market is under long liquidation as market has witnessed drop in open interest by -4.68% to settled at 1690 while prices down -9.45 rupees, now Zinc is getting support at 266 and below same could see a test of 259.8 levels, and resistance is now likely to be seen at 280.9, a move above could see prices testing 289.6.

Trading Ideas:
* Zinc trading range for the day is 259.8-289.6.
* Zinc dropped as a cocktail of factors from aggressive interest rates, a spike in COVID-19 cases in China, potential recession weighed on investor sentiment.
* The SHFE/LME price ratio rose to 7.22, and the profits of imported zinc were as high as 1,137.1 yuan/mt in metal content
* US Institute for Supply Management (ISM) manufacturing index fell to a two-year low in June.

Aluminium

Aluminium yesterday settled down by -2.6% at 206.35 as market players were still worried about a potential economic recession with the release of various economic readings. Euro zone inflation hit a record high in June as price pressures broadened, and its peak could still be months away, firming the case for rapid European Central Bank rate hikes starting this month. U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, signs that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve. Cities in eastern China tightened COVID-19 curbs as coronavirus clusters emerge, posing a new threat to China's economic recovery under the government's strict zero-COVID policy. The premium for aluminium shipments to Japanese buyers for July to September was set at $148 a tonne, down 14% from the previous quarter, to reflect weak demand for automobiles amid a global chip shortage. Japan is Asia's biggest importer of the light metal and the premiums for primary metal shipments it agrees to pay each quarter over the benchmark London Metal Exchange (LME) cash price set the benchmark for the region. Technically market is under fresh selling as market has witnessed gain in open interest by 14.69% to settled at 3264 while prices down -5.5 rupees, now Aluminium is getting support at 204.6 and below same could see a test of 202.7 levels, and resistance is now likely to be seen at 209.6, a move above could see prices testing 212.7.

Trading Ideas:
* Aluminium trading range for the day is 202.7-212.7.
* Aluminium dropped as market players were still worried about a potential economic recession with the release of various economic readings.
* U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years
* Euro zone inflation hit a record high in June as price pressures broadened, and its peak could still be months away

Mentha oil
Mentha oil yesterday settled up by 1.56% at 1021.4 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year we forecast production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil dropped by -16.4 Rupees to end at 1100.5 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -2.97% to settled at 1177 while prices up 15.7 rupees, now Mentha oil is getting support at 1005.4 and below same could see a test of 989.3 levels, and resistance is now likely to be seen at 1030.2, a move above could see prices testing 1038.9.

Trading Ideas:
* Mentha oil trading range for the day is 989.3-1038.9.
* In Sambhal spot market, Mentha oil dropped  by -16.4 Rupees to end at 1100.5 Rupees per 360 kgs.
* Mentha oil gains amid low production this season and improving demand post-pandemic.
* However, upside seen limited as Synthetic Mentha supply remains uninterrupted.
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.

Turmeric
Turmeric yesterday settled down by -0.86% at 8038 amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8141.6 Rupees dropped -62.9 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -6.92% to settled at 12165 while prices down -70 rupees, now Turmeric is getting support at 7914 and below same could see a test of 7790 levels, and resistance is now likely to be seen at 8224, a move above could see prices testing 8410.

Trading Ideas:
* Turmeric trading range for the day is 7790-8410.
* Turmeric dropped amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* However downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%.
* In Nizamabad, a major spot market in AP, the price ended at 8141.6 Rupees dropped -62.9 Rupees.

Jeera 

Jeera yesterday settled down by -0.5% at 21880 on profit booking after prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving. Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 31,802.25 in April 2021 showing a decline of 66%. In the month of March 2022 around 14,595.43 tonnes cumin seed exported as against 35,159.96 in March 2021 showing a decline of 141%. Cumin production in Rajasthan and Gujarat remained nearly 90 lakh bags (55 kg per bag). This year expected cumin production of hardly around 55 lakh bags in the country. In Unjha, a key spot market in Gujarat, jeera edged up by 189.6 Rupees to end at 21965.75 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -8.85% to settled at 8004 while prices down -110 rupees, now Jeera is getting support at 21730 and below same could see a test of 21575 levels, and resistance is now likely to be seen at 22140, a move above could see prices testing 22395.

Trading Ideas:
* Jeera trading range for the day is 21575-22395.
* Jeera dropped on profit booking after prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low.
* Currently, steady demand seen from Bangladesh and due to Bakri-Eid in July further increase in demand is expected.
* On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving.
* In Unjha, a key spot market in Gujarat, jeera edged up by 189.6 Rupees to end at 21965.75 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -0.24% at 40780 as pressure seen after reports Cotton sowing in Rajasthan witnessed a gain of 8.11% with 598.14 thousand hectares as against 553.26 thousand hectares on the same day last year. Cotton sowing in Gujarat fall by nearly -6% with 1,556,683 hectares against sown area of 2021 which was 1,650,463 hectares. India has extended deadline to import cotton without paying import taxes until Oct. 31 from the earlier cut-off date of Sept. 30, the government said in a notification, as the sowing of the fibre crop delayed in some regions due to patchy monsoon rainfall. The world's biggest producer of the fibre had allowed duty free imports in April after local prices jumped to a record high because of a drop in the production and following rally in global prices. The United States Department of Agriculture's report showed that 37% of the cotton crop was in a good-to-excellent condition in the week ending June 26. That compares with 52% for the same period a year ago. Meanwhile, heavy rain will be possible along portions of the Texas coast later this week, the U.S. National Hurricane Center said. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. In spot market, Cotton gained by 130 Rupees to end at 44270 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 4.38% to settled at 1714 while prices down -100 rupees, now Cotton is getting support at 40190 and below same could see a test of 39610 levels, and resistance is now likely to be seen at 41470, a move above could see prices testing 42170.

Trading Ideas:
* Cotton trading range for the day is 39610-42170.
* Cotton dropped as pressure seen after reports Cotton sowing in Rajasthan witnessed a gain of 8.11%
* Cotton sowing in Gujarat fall by nearly -6% with 1,556,683 hectares against sown area of 2021 which was 1,650,463 hectares
* India extends deadline for duty free cotton imports to Oct. 31
* In spot market, Cotton gained  by 130 Rupees to end at 44270 Rupees.

- www.kediaadvisory.com

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