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Gold

Gold yesterday settled up by 1.17% at 52109 after a lower-than-expected inflation reading for the US pushed the dollar down amid prospects the Fed will not have to tight monetary policy much more. Most investors now see a 50bps rate hike next month instead of another 75bps. The aggressive tightening campaign by central banks in major economies, as well as China’s ongoing battle against resurgent Covid outbreaks also stoked fresh concerns about a global recession. While gold is widely considered as a hedge against inflation and economic uncertainties, higher interest rates raise the opportunity cost of holding non-yielding bullion, denting its appeal. Wholesale inventories in the US advanced by 0.6 percent from a month earlier to $918.5 billion in September of 2022, below an initial estimate of 0.8 percent and easing from an upwardly revised 1.4 percent increase in the previous month. Physical gold demand in India eased with jewellers awaiting a dip in domestic prices to stock up for the wedding season following a festival rush, while premiums in China stay elevated due to lack of fresh quotas. Dealers in India were charging a premium of up to $3 an ounce over official domestic prices, down from last week's premium of $3.5. Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.05% to settle at 8025 while prices are up 603 rupees, now Gold is getting support at 51656 and below same could see a test of 51204 levels, and resistance is now likely to be seen at 52385, a move above could see prices testing 52662.

Trading Ideas:
* Gold trading range for the day is 51204-52662.
* Gold rises after a lower-than-expected US CPI
* Most investors now see a 50bps rate hike next month instead of another 75bps.
* US wholesale inventories revised slightly down

Silver

Silver yesterday settled up by 0.57% at 61911 as dollar dropped below 109 the lowest in eight weeks and the yield on the US 10-year Treasury note fell sharply to 3.9%, the lowest in nearly one month as markets raised bets on smaller rate increases by the Federal Reserve after the inflation rate slowed more than expected in October. U.S consumer prices increased less than expected in October and underlying inflation appeared to have peaked, which would allow the Federal Reserve to dial back its hefty interest rate hikes. The consumer price index rose 0.4% last month after climbing by the same margin in September, the Labor Department said. It was the first time since February that the annual increase in the CPI was below 8%. The annual CPI peaked at 9.1% in June, which was the biggest advance since November 1981. Annual inflation is slowing as last year's big increases drop out of the calculation. The number of Americans filing new claims for unemployment benefits rose by 7,000 to 225,000 on the week ending November 5th, the highest increase in four weeks and surpassing expectations of 220,000. The result eased perceptions of a tighter labor market, clashing with the hawkish policy signaled by the Federal Reserve in its November meeting. Technically market is under short covering as the market has witnessed a drop in open interest by -2.33% to settle at 15493 while prices are up 350 rupees, now Silver is getting support at 61106 and below same could see a test of 60300 levels, and resistance is now likely to be seen at 62748, a move above could see prices testing 63584.

Trading Ideas:
* Silver trading range for the day is 60300-63584.
* Silver rose as dollar dropped below 109 the lowest in eight weeks as markets raised bets on smaller rate increases by the Federal Reserve
* The yield on the US 10-year Treasury note fell sharply to 3.9%, the lowest in nearly one month
* U.S. consumer prices increase less than expected in October
 

Crude oil

Crude oil yesterday settled down by -0.47% at 7031 as renewed COVID curbs in China raised concern about fuel demand in the world's biggest crude importer. China is battling a rebound in infections in several economically vital cities, including the capital Beijing. The U.S. Energy Information Administration cut its 2023 world oil demand growth forecast by 320,000 barrels per day to 1.16 million bpd. In its monthly forecast, the agency raised its oil demand growth estimate for 2022 by 140,000 bpd to 2.26 million bpd. U.S. crude stocks rose as domestic oil production gained, while gasoline and distillate inventories fell last week, the Energy Information Administration said. Crude inventories rose by 3.9 million barrels in the last week to 440.8 million barrels, the highest since July 2021. Analysts in a Reuters poll had expected a 1.4 million-barrel rise. Saudi Aramco has told at least four refinery customers in North Asia they will receive full contract volumes of crude oil in December. The producer is maintaining a steady supply to Asia despite the decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, to lower the group's output target by 2 million barrels per day (bpd) starting this month. Technically market is under long liquidation as the market has witnessed a drop in open interest by -14.51% to settle at 7818 while prices are down -33 rupees, now Crude oil is getting support at 6928 and below same could see a test of 6826 levels, and resistance is now likely to be seen at 7115, a move above could see prices testing 7200.

Trading Ideas:
* Crude oil trading range for the day is 6826-7200.
* Crude oil dropped as renewed COVID curbs in China raised concern about fuel demand
* US EIA cuts 2023 world oil demand growth forecast
* U.S. crude stockpiles rise, fuel inventories fall – EIA

Natural Gas

Nat.Gas yesterday settled up by 1.64% at 490.2 on forecasts for heating demand to rise next week when the weather turns much colder and a possible increase in LNG exports if the Freeport LNG plant in Texas starts to return to service. Freeport LNG, however, has said repeatedly that it still expects the 2.1 billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in November following an unexpected shutdown on June 8 caused by a pipeline explosion. Demand for gas will rise once Freeport returns. Futures were also under pressure due to what will likely be federal reports showing much bigger-than-usual gas storage builds this week and next, and expectations that Subtropical Storm Nicole will strengthen into a hurricane before hitting the East Coast of Florida Wednesday night and then moving up the U.S. East Coast toward Georgia and the Carolinas on Friday. U.S. natural gas production and demand will rise to record highs in 2022, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO). EIA projected dry gas production will rise to 98.07 billion cubic feet per day (bcfd) in 2022 and 99.69 bcfd in 2023 from a record 94.57 bcfd in 2021. Technically market is under short covering as the market has witnessed a drop in open interest by -10.56% to settle at 9178 while prices are up 7.9 rupees, now Natural gas is getting support at 475.7 and below same could see a test of 461.2 levels, and resistance is now likely to be seen at 502.9, a move above could see prices testing 515.6.

Trading Ideas:
* Natural gas trading range for the day is 461.2-515.6.
* Natural gas rose on forecasts for heating demand to rise next week when the weather turns much colder and a possible increase in LNG exports.
* The market also remained hyper focused on rumors that the Freeport LNG export plant in Texas may not return in November
* U.S. natgas output, demand to hit record highs in 2022

Copper

Copper yesterday settled up by 1.02% at 686.35 as cooler-than-expected inflation in the US lowered expectations on the extent of rate hikes by the Federal Reserve, supporting industrial demand. Prices were also supported by looming concerns of low supply. China's factory gate prices for October dropped for the first time since December 2020, and consumer inflation moderated, underlining faltering domestic demand as strict COVID-19 curbs, a property slump and global recession risks hammered the economy. Lifting concerns of a slowdown, millions of residents of China's southern manufacturing hub of Guangzhou were told to get tested for COVID-19, as infections topped 2,000 for two days running in the city's worst outbreak so far. A state news agency said Chinese authorities should take a more targeted approach to tackle COVID outbreaks, but the country is again grappling with a surge of infections and Chinese stock markets fell. Despite a fall in copper inventories in LME-registered warehouses, the premium for cash copper over the three-month LME contract has fallen to around $10 a tonne from more than $100 last month, suggesting ample supply. Copper stocks on the LME touched a fresh seven-month low after 1,475 tonnes of departures from Busan and New Orleans, trimming the total to 83,075 tonnes. Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.65% to settle at 5570 while prices are up 6.9 rupees, now Copper is getting support at 676.2 and below same could see a test of 666.1 levels, and resistance is now likely to be seen at 694, a move above could see prices testing 701.7.

Trading Ideas:
* Copper trading range for the day is 666.1-701.7.
* Copper rose as cooler-than-expected inflation in the US lowered expectations on the extent of rate hikes by Fed, supporting industrial demand
* China's factory gate prices for October dropped for the first time since December 2020
* Despite a fall in copper inventories in LME, the premium for cash copper over the three-month LME contract has fallen to around $10 a tonne
 

Zinc

Zinc yesterday settled up by 0.06% at 260.4 as refined zinc output is expected to add 23,200 mt in November, and rise further in December. Hence the inventory is likely to rebound from low. Data showed that the China refined zinc output in October fell slightly short of expectation and stood at 514,100 mt, up 2.02% or 10,200 mt MoM and up 14,800 mt or 2.96% YoY. From January to October 2022, the combined refined zinc output stood at 4.93 million mt, a decrease of 2.48% year-on-year. Glencore produced 18% less zinc in the first nine months compared with the same period a year before, the company said as it trimmed its full-year output forecast by 6% due to knock-on effects of the Ukraine war. The forecast reduction was due to "emerging supply-chain issues in Kazakhstan as the secondary impacts of the Russia/Ukraine war are felt", the commodities group said. Kazakhstan has large deposits of zinc and other materials and Glencore controls Kazzinc, a producer of zinc, copper and lead, in the country. China refined zinc output in November will add 23,200 mt from the previous month to 537,300 mt, up 17,800 mt or 3.43% on the year. The total refined zinc output in January-November 2022 is estimated to be 5.47 million mt, a decrease of 1.93% year-on-year. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.62% to settle at 2379 while prices are up 0.15 rupees, now Zinc is getting support at 256.7 and below same could see a test of 253.1 levels, and resistance is now likely to be seen at 263.2, a move above could see prices testing 266.1.

Trading Ideas:
* Zinc trading range for the day is 253.1-266.1.
* Zinc settled flat as refined zinc output is expected to add 23,200 mt in November, and rise further in December.
* Data showed that the China refined zinc output in October fell slightly short of expectation and stood at 514,100 mt
* Glencore produced 18% less zinc in the first nine months compared with the same period a year before
 

Aluminium

Aluminium yesterday settled down by -0.02% at 201.65 as investors weighed on the worsening macroeconomic backdrop in top consumer China against expectations of lower supply. The operating aluminium capacity in Sichuan picked up slowly, but is unlikely to reach full capacity before the end of the year in the dry season. In addition, the commissioning of new capacities in Guizhou and Inner Mongolia as well as the resumption of production in Guagnxi fell short of expectations, alleviating the supply pressure. On the demand side, the aluminium plate/sheet, foil and extrusion sectors were contained by pandemic and insufficient orders. On the other hand, aluminium ingot inventory fell constantly on delayed arrivals. Covid outbreaks in the country ramped up fears of strict lockdowns and further cemented officials’ vows to stick to the zero-Covid policy, erasing hopes of a rebound in economic activity. On top of that, car sales in China missed expectations for October, underscoring the weight of economic uncertainty. Still, prices remain well above the $3.5 mark that was consistent through the start of the fourth quarter, supported by stimulus pledges from the PBoC and looming supply concerns. Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.29% to settle at 4660 while prices are down -0.05 rupees, now Aluminium is getting support at 199 and below same could see a test of 196.4 levels, and resistance is now likely to be seen at 204.4, a move above could see prices testing 207.2.

Trading Ideas:
*  Aluminium trading range for the day is 196.4-207.2.
*   Aluminium settled flat as investors weighed on the worsening macroeconomic backdrop in top consumer China against expectations of lower supply.
* The operating aluminium capacity in Sichuan picked up slowly, but is unlikely to reach full capacity before the end of the year in the dry season.
* Aluminium ingot inventory fell constantly on delayed arrivals.

Mentha oil

Mentha oil yesterday settled down by -0.29% at 960.9 as mentha exports during Apr-Aug 2022 has dropped by 14.27 percent at 886.53 tonnes as compared to 1034.14 tonnes exported during Apr-Aug 2021. Exports in the month of August 2022 were around 238.04 tonnes as against 155.04 tonnes in July 2022 showing a rise of 53.53%. In the month of August 2022 around 238.04 tonnes of Mentha was exported as against 227.27 tonnes in August 2021 showing a rose of 4.74%. 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 Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil dropped by -22.2 Rupees to end at 1110.7 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.55% to settle at 1015 while prices are down -2.8 rupees, now Mentha oil is getting support at 955 and below same could see a test of 949 levels, and resistance is now likely to be seen at 967, a move above could see prices testing 973.

Trading Ideas:
* Mentha oil trading range for the day is 949-973.
* In Sambhal spot market, Mentha oil dropped  by -22.2 Rupees to end at 1110.7 Rupees per 360 kgs.
* Mentha oil prices dropped as exports during Apr-Aug 2022 has dropped by 14.27 percent
* August exports were around 238.04 tonnes showing a rise of 53.53% compared to July 2022.
* However, Synthetic Mentha supply remains uninterrupted.

Turmeric

Turmeric yesterday settled down by -0.61% at 7488 on profit booking after prices gained in last some sessions as unseasonal rains in some parts of the country have affected the crops. Arrivals has been dropped by 26% Y-o-Y due to lower production as about 11248 tonnes of turmeric arrived at APMC mandies across India in Sep’22 compared to 15758 tonnes of previous year for corresponding month. As per Andhra Pradesh agricultural department, as on 06th October 2022 Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67% till date. Turmeric exports during Apr-August 2022 has rose by 15.35 percent at 74,393.62 tonnes as compared to 64,493.34 tonnes exported during Apr- August 2021. In the month of August 2022 around 12,147.89 tonnes turmeric was exported as against 12,810.36 tonnes in July 2022 showing a drop of 5.17%. In the month of August 2022 around 12,147.89 tonnes of turmeric was exported as against 11,617.90 tonnes in August 2021 showing a rise of 4.56%. 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 7320.15 Rupees dropped -23.25 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.29% to settle at 8610 while prices are down -46 rupees, now Turmeric is getting support at 7446 and below same could see a test of 7402 levels, and resistance is now likely to be seen at 7542, a move above could see prices testing 7594.

Trading Ideas:
* Turmeric trading range for the day is 7402-7594.
* Turmeric dropped on profit booking after prices gained in last some sessions as 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, 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 7320.15 Rupees dropped -23.25 Rupees.

Jeera

Jeera yesterday settled down by -1.89% at 24690 amid reports sowing started in some parts of Rajasthan as moisture conditions is less and completed around 5% to 10% in the key growing regions. Current year sowing area likely to increase in Rajasthan and Gujarat growing regions. However, due to moisture conditions as a result of higher rainfall sowing may be delayed by 10 to 15 days current year. Current year Jeera sowing is likely to start from October last week or November first week in Gujarat growing regions. Jeera exports during Apr-August 2022 has dropped by 26.44 percent at 91,505.49 tonnes as compared to 1,24,390.31 tonnes exported during Apr- August 2021. In the month of August 2022 around 24,448.33 tonnes jeera was exported as against 19,866.18 tonnes in July 2022 showing a rise of 18.74%. In the month of August 2022 around 24,448.33 tonnes of jeera was exported as against 17,460.60 tonnes in August 2021 showing a rise of 40.02%. 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 -151.05 Rupees to end at 24585.05 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.78% to settle at 6315 while prices are down -475 rupees, now Jeera is getting support at 24470 and below same could see a test of 24245 levels, and resistance is now likely to be seen at 25050, a move above could see prices testing 25405.

Trading Ideas:
* Jeera trading range for the day is 24245-25405.
* Jeera dropped amid reports sowing started in some parts of Rajasthan as moisture conditions is less and completed around 5% to 10%
*  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 -151.05 Rupees to end at 24585.05 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -0.37% at 32730 on profit booking after prices gained in last some sessions as cotton production is expected to fall dramatically in Telangana as a result of the four months of incessant rain and pest attacks. While cotton output is expected to be low, cotton quality is also likely to be affected by the same factors. Cotton farmers have demanded a minimum support price (MSP) of ?12,000 a quintal during the current season, saying the cost of production has increased significantly, while yields have dropped. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey and Vietnam. The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales, while also cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece and Mexico. "In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher," the USDA said. In spot market, Cotton gained by 280 Rupees to end at 32460 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.93% to settle at 2163 while prices are down -120 rupees, now Cotton is getting support at 32280 and below same could see a test of 31840 levels, and resistance is now likely to be seen at 33080, a move above could see prices testing 33440.

Trading Ideas:
* Cotton trading range for the day is 31840-33440.
* Cotton dropped on profit booking after prices gained in last some sessions as cotton production is expected to fall dramatically in Telangana
* The pink worm harmed the cotton flock and will have an impact on output.
* However, India is likely to produce 34.4 million bales of cotton in the 2022/23 season, up 12% from a year ago
* In spot market, Cotton gained  by 280 Rupees to end at 32460 Rupees.

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