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Gold

Gold yesterday settled up by 0.64% at 55530 as investors await a slew of data releases in the US calendar and the FOMC minutes for clues on the central bank's rate-hike path. Signs that global inflationary pressures may be peaking encouraged central banks to slow the pace of interest-rate hikes later last year while offering some relief to investors. China's factory activity shrank at a sharper pace in December as surging COVID-19 infections disrupted production and weighed on demand after Beijing largely removed anti-virus restrictions, a private sector survey showed. British manufacturers are starting 2023 on the back foot, after they reported one of their sharpest falls in activity since the 2008-09 recession last month, reflecting a sharp fall in new orders and ongoing job cuts. The S&P Global US Manufacturing PMI was unrevised at 46.2 in December of 2022, pointing to the biggest contraction in factory activity since May of 2020, amid weak client demand. Output fell at a solid pace that was the quickest in just over two-and-a-half years and new orders fell at one of the fastest rates ever. Companies noted that weak client demand stemmed from economic uncertainty and inflationary pressures leading to lower purchasing power among customers. Technically market is under short covering as the market has witnessed a drop in open interest by -0.63% to settle at 14362 while prices are up 352 rupees, now Gold is getting support at 55274 and below same could see a test of 55017 levels, and resistance is now likely to be seen at 55794, a move above could see prices testing 56057.

Trading Ideas:

* Gold trading range for the day is 55409-56189.
* Gold gains as investors await a slew of data releases in the US calendar and the FOMC minutes for clues on the central bank's rate-hike path.
* Signs that global inflationary pressures may be peaking encouraged central banks to slow the pace of interest-rate hikes later last year
* British manufacturers are starting 2023 on the back foot, after reported one of their sharpest falls in activity since the 2008-09 recession

Silver

Silver yesterday settled up by 0.5% at 69917 on profit booking as investors awaited minutes from the Federal Reserve's December policy meeting that could offer hints on the U.S. central bank's tightening path. US job openings fell slightly to 10.5 million in December but remained at considerably high levels, suggesting that wages would continue to rise as companies try to attract workers. At the same time, the ISM Manufacturing PMI fell for a second consecutive month to 48.4 in December 2022, the lowest since May 2020, adding to concerns about the health of the world's largest economy. Geopolitical risks triggered by the Russian invasion of Ukraine ramped up demand for bullion investments, while Western sanctions threatened supply from major producer Russia and lifted prices to a year-peak of $26.4. Still, looming supply concerns drove silver to outperform gold and palladium in 2022. COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes, and London Bullion Market Association stockpiles fell sharply amid outflows to India. The annual inflation rate in Germany fell to 8.6% in December from 10% in November, below market forecasts of 9.1%, a preliminary estimate showed. It was the lowest rate since August as the government paid December natural gas bills for some households and businesses. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.32% to settle at 22781 while prices are up 346 rupees, now Silver is getting support at 69472 and below same could see a test of 69026 levels, and resistance is now likely to be seen at 70742, a move above could see prices testing 71566.

Trading Ideas:

* Silver trading range for the day is 68073-71407.
* Silver prices dropped on profit booking as investors awaited minutes from the Federal Reserve's December policy meeting
* US job openings fell slightly to 10.5 million in December but remained at considerably high levels
* The ISM Manufacturing PMI fell for a second consecutive month to 48.4 in December 2022, the lowest since May 2020


Crude oil

Crude oil yesterday settled down by -2.01% at 6475 weighed down by concerns about weak demand due to the state of the global economy and China's rising COVID cases. The Chinese government also increased export quotas for refined oil products in the first batch for 2023, signalling expectations of poor domestic demand. Top oil exporter Saudi Arabia may further cut the prices for its flagship Arab Light crude grade to Asia in February, after they were set at a 10-month low for this month, as concerns of oversupply continued to cloud the market. The head of the International Monetary Fund warned that much of the global economy would see a tough year in 2023 as the main engines of global growth - the United States, Europe and China - were all experience weakening activity. The Fed also raised interest rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each. If the Fed intensifies its rate hikes, that could slow the economy and hamper fuel consumption. U.S. shipments of crude oil via rail in October fell by 22,000 barrels per day (bpd) from the previous month to 243,000 bpd, according to data by the U.S. Energy Information Administration. Technically market is under fresh selling as the market has witnessed a gain in open interest by 16.2% to settle at 9667 while prices are down -133 rupees, now Crude oil is getting support at 6350 and below same could see a test of 6224 levels, and resistance is now likely to be seen at 6681, a move above could see prices testing 6886.

Trading Ideas:

* Crude oil trading range for the day is 5890-6516.
* Crude oil falls further as concerns grow over global economy, China's COVID cases
* The Chinese government also increased export quotas for refined oil products in the first batch for 2023, signalling expectations of poor domestic demand
* Top oil exporter Saudi Arabia may further cut the prices for its flagship Arab Light crude grade to Asia in February

 

Natural gas

Nat.Gas yesterday settled down by -10.34% at 335.7 on on forecasts for higher demand for liquefied natural gas (LNG) exports over the next two weeks than previously expected. Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.3 bcfd so far in January, up from 96.7 bcfd in December but still below the monthly record of 99.9 bcfd in November 2022. Average U.S. gas demand, including exports, would jump from 110.5 bcfd this week to 121.5 bcfd next week as LNG export rise and temperatures ease ahead of what are usually the coldest weeks of the year. Russia's Gazprom said it would ship 37.8 million cubic metres (mcm) of gas to Europe via Ukraine on Wednesday, down 10.4% from 42.2 mcm on Tuesday. The last time it supplied less than 40 mcm was on July 11, when it shipped 39.4 mcm. Russian gas exports to Europe via pipelines plummeted to a post-Soviet low in 2022 as its largest customer cut imports due to the conflict in Ukraine and a major pipeline was damaged by mysterious blasts, Gazprom data. Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.01% to settle at 26412 while prices are down -38.7 rupees, now Natural gas is getting support at 323.8 and below same could see a test of 311.9 levels, and resistance is now likely to be seen at 357.1, a move above could see prices testing 378.5.

Trading Ideas:

* Natural gas trading range for the day is 317.9-369.5.
* Natural gas rose on forecasts for higher demand for liquefied natural gas (LNG) exports over the next two weeks than previously expected.
* The biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas.
* Gazprom's gas supply to Europe via Ukraine down by 10.4%


Copper

Copper yesterday settled down by -0.83% at 715.15 as sharp recession concerns continued to pressure demand expectations for industrial inputs. Among the latest signs of low demand, PMI data showed that factory activity in China continued to contract sharply in December amid soaring Covid cases, while issues with the country’s debt-ridden property market hurt investment. Still, looming shortage worries limited declines. Output from top producer Chile slid 6.7% in the first three quarters of 2022, while mine protests in Peru added to low production. Commodity trader Trafigura warned that global copper stocks have fallen to record lows, with current inventories being enough to supply world consumption for just 4.9 days. Also, mining giant Glencore estimated a supply shortfall of 50 million tonnes in 2023. China's central bank said it will keep liquidity reasonably ample and maintain the "effective" credit growth to support economic growth and employment. Monetary policy would be precise and forceful, the People's Bank of China said in a statement after a quarterly meeting of its monetary policy committee. The central bank said it would strive to stabilise economic growth, employment and prices, and keep growth of money supply and total social financing basically in line with nominal economic growth. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.6% to settle at 4160 while prices are down -6 rupees, now Copper is getting support at 710 and below same could see a test of 704.9 levels, and resistance is now likely to be seen at 724.8, a move above could see prices testing 734.5.

Trading Ideas:

* Copper trading range for the day is 697-726.2.
* Copper fell as sharp recession concerns continued to pressure demand expectations for industrial inputs.
* PMI data showed that factory activity in China continued to contract sharply in December amid soaring Covid cases
* Output from top producer Chile slid 6.7% in the first three quarters of 2022, while mine protests in Peru added to low production


Zinc

Zinc yesterday settled down by -0.31% at 269.15 as zinc ingot social inventory across seven markets in China rose during New Year’s Day holiday. US dollar remained strong and the manufacturing PMI recorded a new low throughout 2022, the south region of China ushered in the peak of covid infection, leading to insufficient labour forces. ECB Governing Council member Kazaks said he expects the interest rates to be raised sharply at the following two meetings, with future rate hikes likely to be smaller. Ukrainian President Zelensky spoke to Dutch Prime Minister Rutte on January 3. Dutch Prime Minister Rutte said that the Netherlands will continue to help and support Ukraine. Since February 24 last year, the Netherlands has provided 987 million euros in military aid to Ukraine. LME zinc inventories currently remain on the decline and dropped more rapidly last week, according to the London Metal Exchange (LME). The inventories stood at 30,475 mt, the lowest for many years. SHFE zinc inventories increased 12.55% to 20,453 mt in the week of December 30, which currently stand at a low level, according to data from the Shanghai Futures Exchange (SHFE). Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.96% to settle at 2069 while prices are down -0.85 rupees, now Zinc is getting support at 267.8 and below same could see a test of 266.4 levels, and resistance is now likely to be seen at 271.3, a move above could see prices testing 273.4.

Trading Ideas:

* Zinc trading range for the day is 263.9-271.9.
* Zinc prices dropped as zinc ingot social inventory across seven markets in China rose during New Year’s Day holiday.
* US dollar remained strong and the manufacturing PMI recorded a new low throughout 2022
* LME zinc inventories currently remain on the decline and dropped more rapidly last week.


Aluminium

Aluminium yesterday settled down by -2.17% at 205 as the overall supply remained stable as the aluminium factories in Guangxi and Sichuan continued to resume the production. The increase in the aluminium supply in December may be less than expected as the power shortage extended in Guizhou. The inventory has accumulated for three consecutive weeks after hitting the low point, and increased 14% during the New Year’s Day holiday, which weakened the support for aluminium prices. According to statistics, as of January 3, the domestic social inventory of aluminium was 561,000 mt, an increase of 6,800 mt from last Thursday and a decrease of 241,000 mt from the same period last year. According to data released by the London Metal Exchange (LME), LME aluminium inventories have re-entered the downward cycle since late October last year. The latest inventory level was 450,300 mt as of December 30, a new low in the past two months. Inflation in France unexpectedly edged lower in December from a record high a month earlier, helped by slowing energy price rises, official data showed, offering hope the worst of the inflation crisis may be over. The inflation rate fell to 6.7% in December, according to preliminary EU-harmonised data from the national statistics office INSEE. Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.69% to settle at 3899 while prices are down -4.55 rupees, now Aluminium is getting support at 202.9 and below same could see a test of 200.7 levels, and resistance is now likely to be seen at 208.7, a move above could see prices testing 212.3.

Trading Ideas:

* Aluminium trading range for the day is 199.4-207.
* Aluminum dropped as the overall supply remained stable as the aluminium factories in Guangxi and Sichuan continued to resume the production.
* A surge of COVID-19 infections in China and looming weak growth in the United States and Europe have clouded demand prospects for metals.
* LME aluminium inventories have re-entered the downward cycle since late October last year.

Mentha oil

Mentha oil yesterday settled up by 0.94% at 1033.5 on improving export demand especially from China and as the group of ministers’ (GoM’s) has given its views on bringing mentha oil, one of the key ingredients in pan masala, under the reverse charge mechanism. Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes as compared to 1,564.12 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 141.82 tonnes Mentha was exported as against 220.67 tonnes in September 2022 showing a drop of 35.73%. In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021 showing a drop of 49.17%. 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 10.7 Rupees to end at 1181.4 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -6.61% to settle at 967 while prices are up 9.6 rupees, now Mentha oil is getting support at 1027.2 and below same could see a test of 1020.9 levels, and resistance is now likely to be seen at 1039.4, a move above could see prices testing 1045.3.

Trading Ideas:

* Mentha oil trading range for the day is 1032.2-1061.6.
* In Sambhal spot market, Mentha oil gained  by 10.7 Rupees to end at 1181.4 Rupees per 360 kgs.
* Mentha oil gained on improving export demand especially from China and as GoM’s has given its views on bringing mentha oil, under the reverse charge mechanism.
* Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes.
* In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021
 

Turmeric

Turmeric yesterday settled down by -4.05% at 7914 on low level recovery after prices dropped on an “unexpected” slump in domestic and export demand. Turmeric production in the 2021-22 crop year (June-July) has been projected at 13.31 lakh tonnes against 11.24 lakh tonnes the previous year with the area increasing to 3.5 lakh hectares from 2.93 lakh hectares. In the first advance estimate, the crop was pegged at 11.76 lakh tonnes. Turmeric exports during Apr- Oct 2022 has rose by 11.09 percent at 99,569.88 tonnes as compared to 89,626.39 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 11,178.11 tonnes turmeric was exported as against 13,990.65 tonnes in September 2022 showing a fall of 20.10%. In the month of October 2022 around 11,178.11 tonnes of turmeric was exported as against 12,534.87 tonnes in October 2021 showing a fall of 10.82%. 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 7355.45 Rupees gained 25.25 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.09% to settle at 11675 while prices are down -334 rupees, now Turmeric is getting support at 7764 and below same could see a test of 7614 levels, and resistance is now likely to be seen at 8152, a move above could see prices testing 8390.

Trading Ideas:

* Turmeric trading range for the day is 7754-8082.
* Turmeric gained on low level recovery after prices dropped on an “unexpected” slump in domestic and export demand.
* Turmeric production in the 2021-22 crop year (June-July) has been projected at 13.31 lakh tonnes against 11.24 lakh tonnes the previous 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 7355.45 Rupees gained 25.25 Rupees.


Jeera

Jeera yesterday settled up by 1.24% at 33500 amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties. Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected. Sowing In Gujarat, dropped by nearly -8% with 274,995.00 hectares against sown area of 2021 which was 300,401.00 hectares. Prices gained to all time high 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 exports during Apr- Oct 2022 has dropped by 18.92 percent at 1,22,015.13 tonnes as compared to 1,50,479.11 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 12,427.86 tonnes jeera was exported as against 18,081.78 tonnes in September 2022 showing a drop of 31.27%. In the month of October 2022 around 12,427.86 tonnes of jeera was exported as against 11,260.72 tonnes in October 2021 showing a rise of 10.36%. 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 -378.1 Rupees to end at 33020.05 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -9.21% to settle at 5541 while prices are up 410 rupees, now Jeera is getting support at 32610 and below same could see a test of 31725 levels, and resistance is now likely to be seen at 34520, a move above could see prices testing 35545.

Trading Ideas:

* Jeera trading range for the day is 32365-35345.
* Jeera prices rose amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties.
* Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected.
* Sowing in Gujarat, dropped by nearly -8% with 274,995.00 hectares against sown area of 2021 which was 300,401.00 hectares.
* In Unjha, a key spot market in Gujarat, jeera edged down by -378.1 Rupees to end at 33020.05 Rupees per 100 kg.

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