IGI Logo

Gold

Gold yesterday settled up by 0.09% at 58906 hurt by an elevated dollar and U.S. bond yields ahead of the Federal Reserve's July meeting minutes this week that could shed light on the appetite for higher interest rates. The dollar earlier climbed to its highest level in over a month on concerns about China's economy. U.S. consumer prices increased moderately in July while producer prices rose slightly more than expected, consistent with a moderation in inflationary pressures that could persuade the Fed to leave interest rates unchanged next month. Physical gold demand picked up in India helped by a retreat in prices, while strong central bank buying kept premiums stable near five-month highs in top buyer China. This allowed dealers to trim discounts to about $1.50 an ounce over official domestic prices from $3 levels last week. Jewellery manufacturers also received a good number of orders at the India International Jewellery Show this week in Mumbai, said Vipul Shah, chairman of the Gem Jewellery Export Promotion Council (GJEPC). The top consumer has been steadily increasing its reserves, with the central bank reporting 68.69 million fine troy ounces at end-July versus 67.95 million fine troy ounces at end-June. Technically market is under short covering as the market has witnessed a remain unchanged in open interest by 0% to settle at 13512 while prices are up 53 rupees, now Gold is getting support at 58750 and below same could see a test of 58600 levels, and resistance is now likely to be seen at 59040, a move above could see prices testing 59180.

Trading Ideas:

* Gold trading range for the day is 58725-59145.

* Gold remained in range hurt by an elevated dollar and U.S. bond yields

* SPDR gold holdings hit lowest since Jan 2020

* Fed's hawkish minutes will pressure gold

Silver

Silver yesterday settled down by -0.01% at 69976 pressured by a firmer dollar and elevated bond yields as inflation and interest rate concerns returned to haunt investors. However, downside seen limited amid solid industrial demand and tight supply. Also, efforts to curb carbon emissions sped up the development of solar panel technologies that need higher conduction needs, causing sharp upgrades in forecasts for silver demand. Solar panel companies are expected to make up 14% of global silver consumption, compared to 5% in 2014. Meanwhile, the output is projected to rise by slower 2%, flagging fresh supply deficit concerns. Traders shrugged off signs of cooling in the US labour market and softer-than-expected inflation reading after hawkish remarks from the Fed reignited fears that interest rates could stay higher for longer. The University of Michigan consumer sentiment for the US edged lower to 71.2 in August of 2023 from 71.6 in July which was the highest reading since October 2021, but beat forecasts of 71, according to preliminary estimates. The expectations subindex declined to 67.3 from 68.3 while the gauge for current economic conditions increased to 77.4, the highest since October of 2021, from 76.6. Technically market is under long liquidation as the market has witnessed a remain unchanged in open interest by 0% to settle at 17935 while prices are down -5 rupees, now Silver is getting support at 69620 and below same could see a test of 69260 levels, and resistance is now likely to be seen at 70370, a move above could see prices testing 70760.

Trading Ideas:

* Silver trading range for the day is 69040-70720.

* Silver fell as dollar firmed and renewed inflation worries spook investors.

* However, downside seen limited amid solid industrial demand and tight supply.

* Solar panel companies are expected to make up 14% of global silver consumption.

Crudeoil

Crudeoil yesterday settled up by 0.89% at 6934 amid concerns about China's faltering economic recovery and a stronger dollar. Weekly ending crude oil stocks in the U.S. Strategic Petroleum Reserve rose by 995,000 barrels last week to 347.75 million barrels, the biggest weekly increase since June 2020, data from the Energy Information Administration showed The U.S. dollar index extended gains after a slightly bigger increase in U.S. producer prices in July lifted Treasury yields despite expectations the Federal Reserve is at the end of hiking interest rates. Meanwhile, supply cuts by Saudi Arabia and Russia, part of the alliance between the Organization of the Petroleum Exporting Countries and their allies, or OPEC+, are expected to erode oil inventories over the rest of this year, potentially driving prices even higher, the International Energy Agency said in its monthly report. Money managers cut their net long U.S. crude futures and options positions in the week to August 8, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 1,905 contracts to 178,688 during the period. Technically market is under short covering as the market has witnessed a remain unchanged in open interest by 0% to settle at 6928 while prices are up 61 rupees, now Crudeoil is getting support at 6850 and below same could see a test of 6766 levels, and resistance is now likely to be seen at 6982, a move above could see prices testing 7030.

Trading Ideas:

* Crudeoil trading range for the day is 6749-6975.

* Crude oil fell as China's recovery worries and a stronger dollar persisted

* US crude oil stocks in SPR post biggest weekly increase since June 2020 - EIA

* Meanwhile, supply cuts by Saudi Arabia and Russia, are expected to erode oil inventories over the rest of this year - EIA

Naturalgas

Naturalgas yesterday settled up by 0.87% at 230.6 as hotter-than-normal weather kept cooling demand high, with consumption set to rise further into next week. The latest EIA report showed that US utilities added 29 billion cubic feet (bcf) of natural gas into storage during the week ended August 4, more than market expectations of a 25 bcf increase. Consequently, total stockpiles rose to 3.030 trillion cubic feet (tcf), which stands 11% higher than the five-year average, despite the unusually high temperatures. Meteorologists forecast that hotter-than-usual weather will persist until at least August 26, prompting investors to anticipate higher consumption. Meanwhile, gas flow to US LNG export plants has been falling so far in August mainly due to reductions at Venture Global LNG's Calcasieu facility in Louisiana, bolstering domestic gas availability. U.S. energy firms cut the number of oil and natural gas rigs operating, which is an early indicator of future output, for a fifth week in a row, energy services firm Baker Hughes said in its weekly report. Refinitiv said average gas output in the U.S. lower 48 states were 101.9 bcfd so far in August, nearly the same as the 101.8 bcfd in July. Technically market is under short covering as the market has witnessed a remain unchanged in open interest by 0% to settle at 24118 while prices are up 2 rupees, now Naturalgas is getting support at 225.1 and below same could see a test of 219.5 levels, and resistance is now likely to be seen at 235.7, a move above could see prices testing 240.7.

Trading Ideas:

* Naturalgas trading range for the day is 225.7-238.7.

* Natural gas gains as hotter-than-normal weather kept cooling demand high

* The latest EIA report showed that US utilities added 29 bcf into storage

* Meteorologists forecast that hotter-than-usual weather will persist until at least August 26, prompting investors to anticipate higher consumption.

Copper

Copper yesterday settled down by -0.51% at 725 on low level recovery after prices seen pressure on worries over China's property sector and pressure from a stronger dollar. China's new bank loans tumbled in July and other key credit gauges also weakened, even after policymakers cut interest rates and promised to roll out more support for the faltering economy. New data magnified concerns over China’s economic recovery and further pared the outlook for base metal demand in the world’s top consumer. Despite the series of concerning data, markets continued to be skeptical about economic support from Beijing as public bodies refrained from signaling that significant stimulus could be passed. Still, the decline was limited by evidence of lower supply, risking wide shortages as economies transition to copper-intensive green technologies. Codelco’s output sank by 14% in the first half of the year. Additionally, the latest data showed that global inventories are 26% down year-to-date. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5% from last Friday, the exchange said. China's June copper cathode output jumped 15% from a year earlier, expecting August output to rise further to a historic high. Technically market is under long liquidation as the market has witnessed a remain unchanged in open interest by 0% to settle at 5894 while prices are down -3.7 rupees, now Copper is getting support at 721.9 and below same could see a test of 718.7 levels, and resistance is now likely to be seen at 728.9, a move above could see prices testing 732.7.

Trading Ideas:

* Copper trading range for the day is 718.6-732.4.

* Copper gains on low level recovery after pressure seen on worries over China's property sector.

* Concerns about Country Garden's liquidity brought back into focus the troubled property sector

* China's new bank loans tumbled in July and other key credit gauges also weakened

Zinc

Zinc yesterday settled down by -1.26% at 214.7 as mounting concerns about the slow recovery in top buyer China weighed on prospects for demand. In particular, weak manufacturing data and a struggling property sector suggest more stimulus measures are likely needed to enhance the world's largest economy. Looking forward, S&P Global anticipates a moderate growth of 1.4% in the worldwide demand for refined zinc in 2023, influenced by ongoing inflation and stringent monetary policies in both the US and Europe. Concurrently, global refined zinc supply is expected to increase by 1.9%, attributed to a low base year and easing energy costs in Europe, while zinc smelter production in China is constrained due to power restrictions. China's new bank loans tumbled in July, data showed, with annual growth of outstanding total social financing (TSF) – a broad measure of credit and liquidity in the economy – slowing to 8.9%. TSF slumped to 528.2 billion yuan ($73.04 billion) from 4.22 trillion yuan in June, missing analyst estimates. Concern over the health of the property sector has also resurfaced, with a possible debt restructuring by Country Garden, China's top private property developer. Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.67% to settle at 3934 while prices are down -2.75 rupees, now Zinc is getting support at 213.4 and below same could see a test of 212.1 levels, and resistance is now likely to be seen at 216.3, a move above could see prices testing 217.9.

Trading Ideas:

# Zinc trading range for the day is 212.1-217.9.

# Zinc dropped amid mounting concerns about the slow recovery in China.

# S&P Global anticipates a moderate growth of 1.4% in the worldwide demand for refined zinc in 2023

# Global refined zinc supply is expected to increase by 1.9%.

Aluminium

Aluminium yesterday settled down by -0.53% at 197.2 after data demonstrating the sluggish nature of China's post-pandemic recovery. Chinese property giant's debt issue raised doubts about a real estate recovery. Aluminium stocks of Russian origin in London Metal Exchange-approved warehouses, available to the market, rose to 81% of the total in July from 80% in June. The share of Russian origin stocks in LME-registered warehouses has been gradually rising this year as some traders and consumers scramble for alternatives to the Russian metals, even though they are not directly targeted by Western sanctions imposed on Moscow. Russian aluminium stocks on LME warrant rose to 227,525 metric tons in July from 218,025 in June, data published by the world's oldest exchange and largest metals market showed. The proportion of Indian aluminium inventories, which have been dragged down by the move away from the Russian metal, in LME warehouses was unchanged at 18% in July. On the supply side of the fundamentals, Yunnan region is maintaining resumption of production. Currently, more than 80% of the resumption plan has been completed, and production continues to be released. The pressure on the supply side may continue to increase, and the space above aluminum prices is limited. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.48% to settle at 3898 while prices are down -1.05 rupees, now Aluminium is getting support at 196.9 and below same could see a test of 196.4 levels, and resistance is now likely to be seen at 198, a move above could see prices testing 198.6.

Trading Ideas:

# Aluminium trading range for the day is 196.4-198.6.

# Aluminum fell due to sluggish China post-pandemic recovery data.

# Chinese property giant's debt issue raised doubts about a real estate recovery.

# Russian aluminium in LME – registered warehouses rise to 81% in July

Cottoncand

Cottoncandy yesterday settled up by 0.53% at 60760 as cotton crop in North India is under the threat of pink bollworm (PBW) attacks and the intensity of pest attacks is seen higher this year compared to the last two years. While PBW was observed in cotton only at the end of the season in North during kharif 2022-23, this year the pest has surfaced at the start of the season, which is a big threat for the farmers. as arrivals in Punjab have been recorded at almost one-third of the previous year, 2021-22. In Punjab the arrival of cotton in the 2022-23 marketing season has been recorded at 8.7 lakh quintal till date this year, while it was 28.89 lakh quintal for the entire 2021-22 season. USDA weekly export sales report showed net sales of 277,700 running bales of cotton for 2023/2024, with increases primarily for China. During this Kharif season, cotton cultivation in Gujarat has achieved a remarkable milestone, surpassing the records of the past eight years. The state's farmers have successfully planted cotton across an extensive 26.64 lakh hectare area, showcasing a stark contrast to the declining trend witnessed in other major cotton-producing states. In fact, Gujarat, known as India's largest cotton producer, has accomplished cotton sowing in a total of 26,64,565 hectare (ha) as of July 31, according to official data from the state Directorate of Agriculture. In Rajkot, a major spot market, the price ended at 29267.85 Rupees gained by 0.05 percent. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.52% to settle at 383 while prices are up 320 rupees, now Cottoncandy is getting support at 60280 and below same could see a test of 59790 levels, and resistance is now likely to be seen at 61080, a move above could see prices testing 61390.

Trading Ideas:

* Cottoncandy trading range for the day is 59790-61390.

* Cotton gains as crop in North India is under the threat of pink bollworm attacks

* Arrivals in Punjab have been recorded at almost one-third of the previous year, 2021-22.

* In Punjab the arrival of cotton in the 2022-23 marketing season has been recorded at 8.7 lakh quintal till date this year

* In Rajkot, a major spot market, the price ended at 29267.85 Rupees gained by 0.05 percent.

Turmeric

Turmeric yesterday settled up by 0.31% at 16956 amid limited availability of quality produce in the market. Ongoing sowing and crop progress is major price driver for turmeric and forecast of drier weather in southern and central region has added worries to turmeric crops. Sowing activities almost completed in Maharashtra and likely to pick up in Andhra Pradesh and Tamil Nadu but erratic monsoon rainfall has impacted the sowing progress. The looming threat of El Nino casts a shadow over the upcoming turmeric crop. Meteorological predictions suggest the activation of El Nino in July, potentially resulting in reduced rainfall and drought conditions. Such conditions could particularly impact yields, like turmeric, that heavily rely on monsoon irrigation. Farmers shift in focus has led to expectations of a 20-25 percent decrease in turmeric sowing this year, notably in states like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Turmeric exports during Apr-May 2023, rose by 27.55 percent at 39,418.73 tonnes as compared to 30,903.38 tonnes exported during Apr-May 2022. In Nizamabad, a major spot market, the price ended at 14403.05 Rupees dropped by -1.05 percent. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.42% to settle at 16050 while prices are up 52 rupees, now Turmeric is getting support at 16764 and below same could see a test of 16570 levels, and resistance is now likely to be seen at 17168, a move above could see prices testing 17378.

Trading Ideas:

* Turmeric trading range for the day is 16570-17378.

* Turmeric gains amid limited availability of quality produce in the market.

* Sowing activities almost completed in Maharashtra and likely to pick up in Andhra Pradesh and Tamil Nadu

* In May 2023 around 19,827.86 tonnes of turmeric was exported as against 19,590.87 tonnes in April 2023 showing a rise of 1.21%.

* In Nizamabad, a major spot market, the price ended at 14403.05 Rupees dropped by -1.05 percent.

Jeera

Jeera yesterday settled down by -0.88% at 61495 in wake of improved global supply condition. Cheaper availability of Syria and jeera in global market will lead to fall in export demand from India in coming days. Drier weather condition in Gujarat will also lead to rise in arrivals that will cap the upwards move. China’s cumin imports and exports have caused temporary corrections in cumin prices, with a recent $200 decrease in the international market. The possibility of China purchasing Indian cumin in October-November before the arrival of new cumin adds further uncertainty to the market dynamics. Cumin imports in May 2023 reached 210 metric tons, showing a substantial increase of 227.73% compared to the previous month's import volume of 64 metric tons. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. Jeera exports during Apr-May 2023, rose by 67.90 percent at 42,988.50 tonnes as compared to 25,603.35 tonnes exported during Apr-May 2022. In May 2023 around 25,903.63 tonnes of jeera was exported as against 17,084.87 tonnes in April 2023 showing a rise of 51.52%. In May 2023 around 25,903.63 tonnes of jeera was exported as against 14,894.62 tonnes in May 2022 showing a rise of 73.91%. In Unjha, a major spot market, the price ended at 61253.65 Rupees dropped by -0.13 percent. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.71% to settle at 6963 while prices are down -545 rupees, now Jeera is getting support at 60980 and below same could see a test of 60460 levels, and resistance is now likely to be seen at 62160, a move above could see prices testing 62820.

Trading Ideas:

* Jeera trading range for the day is 60460-62820.

* Jeera prices remained under pressure in wake of improved global supply condition.

* Cheaper availability of Syria and jeera in global market will lead to fall in export demand from India in coming days.

* The market is expecting a lower yield and quality of jeera this season

* In Unjha, a major spot market, the price ended at 61253.65 Rupees dropped by -0.13 percent.

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