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Gold

Gold yesterday settled down by -0.01% at 56962 as the dollar steadied and investors squared positions ahead of U.S. fourth-quarter economic growth figures. U.S. business activity contracted for the seventh straight month in January, though the downturn moderated across both the manufacturing and services sectors for the first time since September. Fed Governor Christopher Waller said that upcoming rate moves and an expected continued decline in inflation left policy “pretty close” to being “sufficiently restrictive,” favoring a smaller 25 basis point increase at the next meeting. Investors now look ahead to a raft of US data that could guide the rates outlook including the Q4 GDP growth rate, durable goods orders, the PCE price index and personal income and spending data. India plans to slash the import duty on gold because higher taxes have made it more profitable for smugglers, who can offer hefty discounts and denting the market share of banks and refiners. The duty cut by the world's second-biggest consumer could lift retail sales by making gold cheaper ahead of peak demand season and support global prices. It could also revive operations of local gold refineries, which nearly suspended refining for the past two months as they could not compete with grey market operators. Technically market is under long liquidation as the market has witnessed a drop in open interest by -35.48% to settle at 4818 while prices are down -7 rupees, now Gold is getting support at 56769 and below same could see a test of 56576 levels, and resistance is now likely to be seen at 57088, a move above could see prices testing 57214.

Trading Ideas:

* Gold trading range for the day is 56576-57214.
* Gold edged lower from all-time peak as the dollar steadied and investors squared positions ahead of U.S. fourth-quarter economic growth figures.
* U.S. business activity contracted for the seventh straight month in January, though the downturn moderated
* India plans to cut gold import duty to arrest smuggling

 

Silver

Silver yesterday settled up by 0.2% at 68676 as investors reassessed the outlook for monetary policy from major central banks and demand for industrial inputs. Despite rising bets that the Federal Reserve will hike its key rate by a slower 25bps in its upcoming meeting, policymakers emphasized there was still a lot of work to be done before inflation returns to target and flagged the possibility of the terminal rate reaching above the 5% currently priced by money markets. Besides reducing the appeal of non-interest-bearing bullion investments, higher borrowing costs ease demand for silver as an industrial input for goods with high electricity conduction needs, which was reflected in the recent decline of solar energy equities. Supply concerns limited the decrease in prices, as COMEX inventories remained under pressure and LBMA stockpiles dropped considerably amid outflows to India. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) in the US dropped 3bps to 6.2% in the week ended January 20th, 2023. While the European Central Bank (ECB) is set to raise interest rates by 50 basis points in both February and March, economists expect a 25-basis point increase at the FOMC's next meeting at the end of this month. Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.84% to settle at 18375 while prices are up 134 rupees, now Silver is getting support at 68165 and below same could see a test of 67653 levels, and resistance is now likely to be seen at 68967, a move above could see prices testing 69257.

Trading Ideas:

* Silver trading range for the day is 67653-69257.
* Silver steadied as investors reassessed the outlook for monetary policy from major central banks and demand for industrial inputs.
* Fed’s Waller said that upcoming rate moves and an expected continued decline in inflation left policy “pretty close” to being “sufficiently restrictive”
* Supply concerns limited the decrease in prices, as COMEX inventories remained under pressure

 

Crude oil

Crude oil yesterday settled down by -0.44% at 6533 as U.S. crude and gasoline inventories rose, on weaker demand for fuel products. Crude inventories rose by a less-than-expected 533,000 barrels in the last week to 448.5 million barrels, compared with forecasts for a 1 million-barrel rise. U.S. gasoline stocks rose by 1.8 million barrels in the week to 232 million barrels, the EIA said.Total product supplied, a proxy for fuel demand, fell 867,000 barrels per day, EIA data showed. Meanwhile, refinery utilization rates rose by 0.8 percentage point, bringing the rate above 80% after falling to the lowest levels lowest since March 2021 the week prior. An OPEC+ panel is likely to endorse the producer group's current oil output policy when it meets next week, as hopes of higher Chinese demand driving an oil price rally are balanced by worries over inflation and a global economic slowdown. Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+, meet virtually on Feb. 1. U.S. crude stocks in the Strategic Petroleum Reserve (SPR) held steady at 371.6 million barrels during the week ended Jan. 20, the first time weekly SPR inventories were unchanged since September 2021, Energy Information Administration (EIA) data showed. In the prior week ended Jan. 13, crude stocks in SPR fell by just one barrel, according to EIA data. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.02% to settle at 5110 while prices are down -29 rupees, now Crude oil is getting support at 6481 and below same could see a test of 6429 levels, and resistance is now likely to be seen at 6607, a move above could see prices testing 6681.

Trading Ideas:

* Crude oil trading range for the day is 6429-6681.
* Crude oil dropped as U.S. crude and gasoline inventories rose, on weaker demand for fuel products.
* OPEC+ panel unlikely to tweak oil policy at Feb. 1 meeting
* Crude inventories rose by a less-than-expected 533,000 barrels in the last week to 448.5 million barrels

Natural gas

Nat.Gas yesterday settled down by -4.25% at 245.4 on forecasts for less cold weather and lower heating demand next week than previously expected and a growing belief in the market that Freeport LNG's liquefied natural gas (LNG) export plant in Texas will not actually restart for weeks or months. That price drop came despite bullish forecasts calling for more gas demand this week than previously expected and a drop in output over the past couple of days as cold weather freezes wells in some producing basins. Earlier this week, Freeport said its export plant was ready to begin the process of exiting a seven-month outage, pending regulatory approval. But some analysts have stuck with their earlier estimates that it will take until February, March or even later for the plant to actually start pulling in big amounts of pipeline gas. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.6 bcfd so far in January, up from 96.7 bcfd in December. That compares with a monthly record of 99.9 bcfd in November 2022. The average amount of gas flowing to U.S. LNG export plants rose to 12.3 bcfd so far in January, up from 11.9 bcfd in December. Technically market is under fresh selling as the market has witnessed a gain in open interest by 18.44% to settle at 35694 while prices are down -10.9 rupees, now Natural gas is getting support at 241.3 and below same could see a test of 237.3 levels, and resistance is now likely to be seen at 252, a move above could see prices testing 258.7.

Trading Ideas:

* Natural gas trading range for the day is 237.3-258.7.
* Natural gas dropped on forecasts for less cold weather and lower heating demand next week than previously expected
* Freeport LNG's liquefied natural gas (LNG) export plant in Texas will not actually restart for weeks or months.
* Price drop came despite bullish forecasts calling for more gas demand this week than previously expected


Copper

Copper yesterday settled up by 0.01% at 786.05 weighed down by a stronger dollar and the absence of China, where markets are closed for a week-long Lunar New Year holiday. Copper inventories in global exchange warehouses are low and social unrest in Peru, has raised fears of disruption to supplies. The world's refined copper market saw a 89,000 tonne deficit in November, compared with a surplus of 68,000 tonnes in October, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in November was 2.2 million tonnes, while consumption was 2.3 million tonnes. For the first eleven months of 2022, the market was in a 384,000 tonne deficit compared with a 381,000 tonne deficit in the same period a year earlier, the ICSG said. Chile's Codelco, the world's largest copper producer, produced 172,000 less tonnes of copper in 2022 compared to 2021, the company's chairman said. Speaking to the association of engineers during a presentation in Santiago, chairman Maximo Pacheco said 77% of the reduction was due to problems with operations while 23% was due to project delays. Support also seen after the news that Peru unrest threatens to choke off almost 2% of global copper supply. Technically market is under short covering as the market has witnessed a drop in open interest by -3.6% to settle at 4639 while prices are up 0.1 rupees, now Copper is getting support at 782.4 and below same could see a test of 778.7 levels, and resistance is now likely to be seen at 788.6, a move above could see prices testing 791.1.

Trading Ideas:

* Copper trading range for the day is 778.7-791.1.
* Copper prices settled flat weighed down by a stronger dollar and the absence of China, where markets are closed for a week-long Lunar New Year holiday.
* Global refined copper market swings to 89,000 deficit in Nov – ICSG
* Copper inventories in global exchange warehouses are low and social unrest in Peru, has raised fears of disruption to supplies.


Zinc

Zinc yesterday settled up by 0.97% at 301.55 supported by improving demand prospects in China and a soft U.S. dollar, even as trading remained muted during the Chinese Lunar New Year holidays. The global zinc market deficit climbed to 119,500 tonnes in November from a revised deficit of 39,400 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 72,400 tonnes in October. During the first 11 months of 2022, ILZSG data showed a deficit of 228,000 tonnes versus a deficit of 163,000 tonnes in the same period of 2021. London Metal Exchange zinc inventories have tumbled to the lowest levels in more than three decades, but rising stocks and tepid demand in top metals consumer China are helping to dampen concern about potential shortages. Shutdowns of some European zinc smelters this year due to high power prices has been a key reason behind low LME stocks of the metal mostly used for galvanising steel. Three-month LME zinc rallied along with other base metals in recent weeks as speculators cheered the reopening of China from COVID-19 restrictions, touching the highest in over four months. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.36% to settle at 2685 while prices are up 2.9 rupees, now Zinc is getting support at 298.6 and below same could see a test of 295.6 levels, and resistance is now likely to be seen at 303.2, a move above could see prices testing 304.8.

Trading Ideas:

* Zinc trading range for the day is 295.6-304.8.
* Zinc gained supported by improving demand prospects in China and a soft U.S. dollar
* Global zinc market deficit widens to 119,500 T in November – ILZSG
* London Metal Exchange zinc inventories have tumbled to the lowest levels in more than three decades

Aluminium

Aluminium yesterday settled down by -0.04% at 227.55 on profit booking amid a week-long Lunar New Year holiday in top consumer China kept volumes thin. Global primary aluminium output in December rose 6.12% year on year to 5.859 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.47 million tonnes in December, the IAI said. China's aluminium imports in 2022 fell 25.6% from a year earlier as COVID-restrictions reduced consumption amid record high domestic production. Last year, the world's biggest aluminium producer and consumer brought in 2.39 million tonnes of unwrought aluminium and products, which includes primary metal and unwrought, alloyed aluminium, according to data from the General Administration of Customs. Demand for the light metal used in construction, transportation and packaging sectors was hampered by China's strict anti-coronavirus measures and its ailing property sector. Economic growth in the world's second-largest economy in 2022 slumped to one of its worst levels in nearly half. The aluminium ingot social inventories across China’s eight major markets stood at 744,000 mt as of January 19, up 102,000 mt or 15.8% from a week ago and 252,000 mt from the end of December. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.15% to settle at 5181 while prices are down -0.1 rupees, now Aluminium is getting support at 226.4 and below same could see a test of 225 levels, and resistance is now likely to be seen at 228.6, a move above could see prices testing 229.4.

Trading Ideas:

* Aluminium trading range for the day is 225-229.4.
* Aluminium settled flat on profit booking amid a week-long Lunar New Year holiday in top consumer China kept volumes thin.
* Global aluminium output rises 6.1% y/y in December – IAI
* China 2022 aluminium imports fall 26% on lower demand

Mentha oil

Mentha oil yesterday settled down by -1.06% at 1009.1 on profit booking after prices gained on improving export demand especially from China. Mentha exports during Apr-Nov 2022 has dropped by 18.10 percent at 1,485.25 tonnes as compared to 1,813.38 tonnes exported during Apr- 2022 2021. In the month of November 2022 around 236.22 tonnes Mentha was exported as against 141.82 tonnes in October 2022 showing a rise of 66.56%. In the month of November 2022 around 236.22 tonnes of Mentha was exported as against 249.26 tonnes in November 2021 showing a drop of 5.23%. 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 dropped by -16.4 Rupees to end at 1162.7 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.11% to settle at 950 while prices are down -10.8 rupees, now Mentha oil is getting support at 1004.8 and below same could see a test of 1000.4 levels, and resistance is now likely to be seen at 1015.8, a move above could see prices testing 1022.4.

Trading Ideas:

* Mentha oil trading range for the day is 1000.4-1022.4.
* In Sambhal spot market, Mentha oil dropped  by -16.4 Rupees to end at 1162.7 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained on improving export demand especially from China.
* Mentha exports during Apr-Nov 2022 has dropped by 18.10 percent at 1,485.25 tonnes
* In the month of November 2022 around 236.22 tonnes of Mentha was exported as against 249.26 tonnes in November 2021


Turmeric

Turmeric yesterday settled down by -1.65% at 7744 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-Nov 2022 has rose by 9.90 percent at 1,11,968.51 tonnes as compared to 1,01,882.03 tonnes exported during Apr-Nov 2021. In the month of November 2022 around 12,398.63 tonnes turmeric was exported as against 11,178.11 tonnes in October 2022 showing a rise of 10.92%. In the month of November 2022 around 12,398.63 tonnes of turmeric was exported as against 12,255.64tonnes in November 2021 showing a rise of 1.17%. 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 7272.95 Rupees dropped -108.2 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.05% to settle at 12490 while prices are down -130 rupees, now Turmeric is getting support at 7676 and below same could see a test of 7610 levels, and resistance is now likely to be seen at 7848, a move above could see prices testing 7954.

Trading Ideas:

* Turmeric trading range for the day is 7610-7954.
* Turmeric prices dropped on an “unexpected” slump in domestic and export demand.
* Turmeric production in 2023 has been projected at 5.13 Lakh Mt against 4.67 Lakh Mt 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 7272.95 Rupees dropped -108.2 Rupees.

 

Jeera

Jeera yesterday settled down by -2.78% at 31485 on profit booking after prices gained 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-Nov 2022 has dropped by 17.40 percent at 133,250.24 tonnes as compared to 161,317.94 tonnes exported during Apr-Nov 2021. In the month of November 2022 around 11,235.11 tonnes jeera was exported as against 12,427.86 tonnes in October 2022 showing a drop of 9.60%. In the month of November 2022 around 11,235.11 tonnes of jeera was exported as against 10,838.83 tonnes in November 2021 showing a rise of 3.66%. 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 -311.1 Rupees to end at 32186.95 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.88% to settle at 4830 while prices are down -900 rupees, now Jeera is getting support at 30930 and below same could see a test of 30375 levels, and resistance is now likely to be seen at 32220, a move above could see prices testing 32955.

Trading Ideas:

* Jeera trading range for the day is 30375-32955.
* Jeera dropped on profit booking after prices gained 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 -10% with 275,832.00 hectares against sown area of 2021-22 which was 307,135.00 hectares.
* In Unjha, a key spot market in Gujarat, jeera edged down by -311.1 Rupees to end at 32186.95 Rupees per 100 kg.
 

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