IGI Logo

Gold

Gold yesterday settled up by 0.45% at 54295 as the dollar eased, while investors positioned themselves ahead of key U.S. inflation data and the Federal Reserve's policy meeting due next week. Investors are keeping a close eye on the Fed policy decision due on Dec. 14, with market participants largely pricing in a 50-basis-point (bps) rate hike. November's consumer price data due on Dec. 13 will also be closely watched. Gold premiums in China rose as demand picked up after the top consumer eased COVID restrictions, while high prices muted activity in India. Premiums in China rose to $10-$25 an ounce over benchmark spot prices from last week's $2-$12. Dealers offered discounts of up to $20 an ounce over official domestic prices versus last week's $18 discounts. In Hong Kong, gold changed hands between a discount of $0.5 and $2.50 premiums, while Singapore dealer charged $1.50-$3.00 premiums. China's central bank said it had added 32 tonnes of gold worth around $1.8 billion to its reserves, the first time it has disclosed an increase since September 2019. The additions bring China's reported holdings at the end of November to 1,980 tonnes, worth around $112 billion. Technically market is under short covering as the market has witnessed a drop in open interest by -0.59% to settle at 15752 while prices are up 244 rupees, now Gold is getting support at 54084 and below same could see a test of 53872 levels, and resistance is now likely to be seen at 54454, a move above could see prices testing 54612.
Trading Ideas:
* Gold trading range for the day is 53872-54612.
* Gold prices climbed as the dollar eased, while investors positioned themselves ahead of key U.S. inflation data and Fed policy meeting
* China premiums at $10-$25 an ounce this week
* Demand should pick up further into Chinese New Year-trader

Silver
Silver yesterday settled up by 1.5% at 68038 amid growing fears of a U.S. recession and expectations that the Federal Reserve is prepared to slow down with rate hikes. The dollar remained on the back foot and Treasury yields dipped as investors eyed a trio of central bank interest-rate decisions next week. Official data showed that consumer prices in China were up 1.6 percent year-on-year in November, down from 2.1 percent in October. Producer prices dropped an annual 1.3 percent versus expectations for a decline of 1.4 percent. Signs of low supply also supported prices, as New York’s COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes. Also, the London Bullion Market Association stockpiles fell for the 10th straight month to a record-low 27.1 thousand tonnes in November. The Producer Price Index for final demand in the US rose 0.3% month-over-month in November of 2022, the same as an upwardly revised 0.3% increase in October and above market forecasts of 0.2%. Cost of services went up 0.4%, led by securities brokerage, dealing, investment advice, and related services, which jumped 11.3%. Cost of goods edged up 0.1%, led by 38.1% surge in prices for fresh and dry vegetables. Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.5% to settle at 21269 while prices are up 1004 rupees, now Silver is getting support at 67196 and below same could see a test of 66355 levels, and resistance is now likely to be seen at 68574, a move above could see prices testing 69111.
Trading Ideas:
* Silver trading range for the day is 66355-69111.
* Silver gains amid growing fears of a U.S. recession and expectations that the Federal Reserve is prepared to slow down with rate hikes.
* The dollar remained on the back foot and Treasury yields dipped as investors eyed a trio of central bank interest-rate decisions next week.
* Signs of low supply also supported prices, as New York’s COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes.


Crude oil
Crude oil yesterday settled down by -1.54% at 5876 on worries over weak economic outlook in China, Europe and the United States weighing on oil demand. In China, surging infections will likely depress economic growth in the next few months despite some restrictions being eased, bringing a rebound only later in 2023. Tightening financial conditions also weighed on markets, with the US Federal Reserve expected to raise interest rates further and keep them higher for longer. Meanwhile, investors cheered easing Covid restrictions in China that sparked hopes of a wider economic reopening that could boost demand in the world’s top crude importer. The shutdown of the Keystone pipeline also added to the highly uncertain supply outlook, with investors still assessing the impact of the latest sanctions on Russian oil. U.S. crude production rose by 100,000 barrels per day (bpd) last week to 12.2 million bpd, the highest since August, the U.S. Energy Information Administration said in its weekly Petroleum Status Report. The U.S. Energy Information Administration raised its forecast for this year's crude output growth marginally, while petroleum demand is likely to rise less than previously expected. For 2023, EIA projected that crude production would rise to 12.34 million bpd. That compares with a record 12.29 million bpd in 2019. Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.17% to settle at 23227 while prices are down -92 rupees, now Crude oil is getting support at 5805 and below same could see a test of 5733 levels, and resistance is now likely to be seen at 5994, a move above could see prices testing 6111.
Trading Ideas:
# Crude oil trading range for the day is 5733-6111.
# Crudeoil dropped on worries over weak economic outlook in China, Europe and the United States weighing on oil demand.
# U.S. oil output rises to 12.2 million bpd in latest week – EIA
# EIA projected that crude production would rise to 11.87 million barrels per day (bpd) in 2022, compared with its previous estimate of 11.83 million bpd.


Nat.Gas
Nat.Gas yesterday settled up by 0.99% at 508.7 prompted by forecasts of cold weather from next week. Still, prices remain unusually subdued for this time of the year, down nearly 10% this month, as milder weather in most of October and November delayed the winter heating season while record levels of production added to the bearish sentiment. EIA reported that US production of dry natural gas used mostly in homes and business for heating, cooking and electricity, is set to break an annual record 98.0 Bcf/d in 2022 and to average between 100 Bcf/d and 101 Bcf/d in 2023, amid more pipeline infrastructure expansion projects in the second half of the year. EIA sees natural gas prices at the US Henry Hub to average $5.62/MMBtu in the first half of 2023. The U.S. Energy Information Administration (EIA) said U.S. utilities pulled 21 billion cubic feet (bcf)of gas from storage during the week ended Dec. 2. That was lower than the 31-bcf decline forecast in a poll and well below a decrease of 59 bcf in the same week last year and a five-year (2017-2021) average decline of 49 bcf. The average amount of gas flowing to U.S. LNG export plants held around 11.8 bcfd so far in December, the same as in November. Technically market is under short covering as the market has witnessed a drop in open interest by -22.87% to settle at 7276 while prices are up 5 rupees, now Natural gas is getting support at 482.7 and below same could see a test of 456.8 levels, and resistance is now likely to be seen at 531.1, a move above could see prices testing 553.6.
Trading Ideas:
* Natural gas trading range for the day is 456.8-553.6.
* Natural gas prices rose prompted by forecasts of cold weather from next week.
* EIA reported that US production of dry natural gas is set to break an annual record 98.0 Bcf/d in 2022
* EIA sees natural gas prices at the US Henry Hub to average $5.62/MMBtu in the first half of 2023.


Copper
Copper yesterday settled down by -0.21% at 706.4 as Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 20.4 % from last Friday. Investors anticipated that China's easing of coronavirus restrictions will boost economic growth and metals demand. China announced the most sweeping changes to its resolute anti-COVID regime since the pandemic began three years ago, loosening rules that curbed the spread of the virus but sparked protests and hobbled the world's second-largest economy. Goldman Sachs raised its 2023 forecast for average copper prices to $9,750 per tonne from $8,325 previously. It said that copper surplus is no longer likely to happen in 2023, with global visible stocks falling to their lowest in 14 years. Visible copper inventories remain low, with Goldman Sachs predicting a supply deficit in 2023 and prices at $11,000 in a year. China's economic growth will keep picking up pace with the implementation of the newly-announced anti-COVID adjustment measures. China will also keep the yuan exchange rate basically stable, and this is also conducive to safeguarding global supply chain stability. China's Bank of Communications said it had signed pacts to support eight property firms, easing a liquidity crunch in the sector, which is a major user of metals. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.96% to settle at 5343 while prices are down -1.5 rupees, now Copper is getting support at 702.7 and below same could see a test of 699.1 levels, and resistance is now likely to be seen at 711.7, a move above could see prices testing 717.1.
Trading Ideas:
* Copper trading range for the day is 699.1-717.1.
* Copper prices dropped as Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 20.4 % from last Friday
* Visible copper inventories remain low, with Goldman Sachs predicting a supply deficit in 2023 and prices at $11,000 in a year.
* China's economy will pick up pace following new COVID rules


Zinc
Zinc yesterday settled up by 0.76% at 286.75 as LME zinc inventory has entered a downward track since early September, and continued to fall last week, standing at 39,750 mt, its lowest in more than 32 years. Nyrstar has completed scheduled maintenance work at its Auby operation in Northern France, but the smelter will not resume zinc production due to challenging market conditions. "This period will be used to bring forward future planned investments to improve operational stability and efficiency of the Auby smelter once operations are able to restart." Nyrstar put its zinc smelting operations at Budel in the Netherlands on care and maintenance in September. Metal industry sources say Nyrstar has the capacity to produce 720,000 tonnes of zinc in Europe, with 315,000 of that at Budel. Zinc ingot social inventory across seven markets in China totalled 53,700 mt as of Friday December 9, down 800 mt from this Monday, alluding lingering supply tightness in the spot market. The global zinc market deficit rose to 103,000 tonnes in September from a revised deficit of 90,200 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 101,100 tonnes in August. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.58% to settle at 3476 while prices are up 2.15 rupees, now Zinc is getting support at 284.2 and below same could see a test of 281.6 levels, and resistance is now likely to be seen at 288.4, a move above could see prices testing 290.
Trading Ideas:
* Zinc trading range for the day is 281.6-290.
* Zinc rose as LME zinc inventory continued to fall last week, standing at 39,750 mt, its lowest in more than 32 years.
* Nyrstar's Auby zinc plant on care and maintenance until further notice
* Global zinc market deficit rises to 103,000 T in September – ILZSG



Aluminium
Aluminium yesterday settled down by -0.6% at 214.15 as the China’s operating aluminium capacity continued to rise in December, driven by restarts in Sichuan and Guangxi, as well as release of new capacity in Inner Mongolia and Gansu. And because of winter and approaching New Year’s Day, aluminium smelters raised the proportion of ingots. On the demand side, the downstream consumption was poor in the traditional off-season. Some aluminium processing plants plan to close early for the Chinese New Year. Therefore, aluminium ingot inventory, albeit still at a low level, may accumulate in the future, putting aluminium prices at risk of pulling back. China's economic growth will keep picking up pace with the implementation of the newly-announced anti-COVID adjustment measures. China will also keep the yuan exchange rate basically stable, and this is also conducive to safeguarding global supply chain stability. Aluminium ingot social inventory stood at 500,000 mt as of Thursday December 8, flat from last Thursday but down 7,000 mt from Monday December 5. The inventory level was down 16,000 mt from the end of November and down 452,000 mt from the same period last year. Aluminium ingot social inventory has been hovering around 500,000 mt in the past two weeks. Technically market is under long liquidation as the market has witnessed a drop in open interest by -7.68% to settle at 5709 while prices are down -1.3 rupees, now Aluminium is getting support at 213.2 and below same could see a test of 212.3 levels, and resistance is now likely to be seen at 215.6, a move above could see prices testing 217.1.
Trading Ideas:
* Aluminium trading range for the day is 212.3-217.1.
* Aluminium dropped as the China’s operating aluminium capacity continued to rise in December
* Pressure also seen amid restarts in Sichuan and Guangxi, as well as release of new capacity in Inner Mongolia and Gansu.
* China's economy will pick up pace following new COVID rules


Mentha oil
Mentha oil yesterday settled up by 2.18% at 985.4 on low level buying after prices dropped as mentha exports during Apr-Sept 2022 has dropped by 13.84 percent at 1,107.20 tonnes as compared to 1,285.12 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 220.67 tonnes Mentha was exported as against 238.04 tonnes in August 2022 showing a drop of 7.30%. In the month of September 2022 around 220.67 tonnes of Mentha was exported as against 250.97 tonnes in September 2021 showing a drop of 12.07%. Synthetic Mentha supply remains uninterrupted. Support also seen 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, 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 13.5 Rupees to end at 1122 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -4.97% to settle at 822 while prices are up 21 rupees, now Mentha oil is getting support at 967.3 and below same could see a test of 949.1 levels, and resistance is now likely to be seen at 995.6, a move above could see prices testing 1005.7.
Trading Ideas:
* Mentha oil trading range for the day is 949.1-1005.7.
* In Sambhal spot market, Mentha oil gained  by 13.5 Rupees to end at 1122 Rupees per 360 kgs.
* Mentha gained on low level buying after prices dropped as exports during Apr-Sept 2022 has dropped by 13.84 percent
* In the month of September 2022 around 220.67 tonnes Mentha was exported showing a drop of 7.30%.
* However, Synthetic Mentha supply remains uninterrupted.


Turmeric
Turmeric yesterday settled down by -0.6% at 7892 amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. As per Andhra Pradesh agricultural department, Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67%. Turmeric exports during Apr- Sept 2022 has rose by 14.65 percent at 88,384.27 tonnes as compared to 77,091.52 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 13,990.65 tonnes turmeric was exported as against 12,147.89 tonnes in August 2022 showing a rise of 15.16%. In the month of September 2022 around 13,990.65 tonnes of turmeric was exported as against 12,598.15 tonnes in September 2021 showing a rise of 11.05%. 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 7230.4 Rupees dropped -36.25 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.5% to settle at 6630 while prices are down -48 rupees, now Turmeric is getting support at 7810 and below same could see a test of 7726 levels, and resistance is now likely to be seen at 7982, a move above could see prices testing 8070.
Trading Ideas:
* Turmeric trading range for the day is 7726-8070.
* Turmeric prices dropped amid lower demand from domestic spice-makers and stockists amid availability of supply.
* As per Andhra Pradesh agricultural department, turmeric sowing activity completed around 16,921 hectares, down by 12.67% till date from last year.
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In Nizamabad, a major spot market in AP, the price ended at 7230.4 Rupees dropped -36.25 Rupees.

Jeera
Jeera yesterday settled up by 0.99% at 26510 amid higher demand for the fresh crop and supply tightness in the physical market. Good demand expected from China in December-January and Ramzan demand during January-February from gulf & other countries. Jeera sowing around 75% to 80% sowing has been completed in Rajasthan Jeera growing regions, last year till date sowing completed around 85% to 90%. Jeera exports during Apr- Sept 2022 has dropped by 21.28 percent at 1,09,587.28 tonnes as compared to 1,39,218.38 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 18,081.78 tonnes jeera was exported as against 24,448.33 tonnes in August 2022 showing a drop of 26.04%. In the month of September 2022 around 18,081.78 tonnes of jeera was exported as against 14,828.07 tonnes in September 2021 showing a rise of 21.94%. 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 -5.65 Rupees to end at 25355.45 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.99% to settle at 6246 while prices are up 260 rupees, now Jeera is getting support at 25930 and below same could see a test of 25350 levels, and resistance is now likely to be seen at 26860, a move above could see prices testing 27210.
Trading Ideas:
* Jeera trading range for the day is 25350-27210.
* Jeera gained amid higher demand for the fresh crop and supply tightness in the physical market.
* Current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* 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 -5.65 Rupees to end at 25355.45 Rupees per 100 kg.


Cotton
Cotton yesterday settled up by 0.93% at 31500 helped by prospects of an improvement in demand from top consumer China. India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales. According to the Punjab Mandi Board data, cotton crop has seen the slowest arrival in the last five years even as the average rate is the highest since 2018. Punjab is expected to have produced 20 lakh quintals against 29 lakh quintals produced in the 2021-22 season. China's agriculture ministry lowered its outlook for cotton consumption, as slowing global economic growth continues to hurt demand for textiles. China's cotton consumption in the 2022/23 crop year that began in September is seen at 7.5 million tonnes, 200,000 tonnes lower than in last month's forecast, the ministry said in its monthly Chinese Agricultural Supply and Demand Estimates (CASDE) report. The latest US Department of Agriculture cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton production and lower global demand estimates for 2022/2023. Production in the US, the world’s largest exporter of cotton, was seen about 1.5% higher, at 14.0 million bales, as a decrease in the Southwest is more than offset by increases elsewhere. In spot market, Cotton dropped by -30 Rupees to end at 31970 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -2.9% to settle at 2344 while prices are up 290 rupees, now Cotton is getting support at 31280 and below same could see a test of 31060 levels, and resistance is now likely to be seen at 31660, a move above could see prices testing 31820.
Trading Ideas:
* Cotton trading range for the day is 31060-31820.
* Cotton gains helped by prospects of an improvement in demand from top consumer China.
* China cuts cotton demand outlook on slowing global growth
* USDA cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton
* In spot market, Cotton dropped  by -30 Rupees to end at 31970 Rupees.

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