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Gold

Gold yesterday settled up by 0.64% at 55530 as growth concerns dominated sentiment at the start of the year, with swiftly diminishing hopes that the US Federal Reserve could engineer a soft landing. IMF head Kristalina Georgiva warned that 2023 is going to be a tough year as the main engines of growth, namely the US, Europe and China, are all experiencing weakening activity. Investors now look ahead to a raft of data this week that could guide the outlook for growth and monetary policy, including manufacturing PMI data from major economies, a key monthly US jobs report and the latest Fed minutes. Meanwhile, gold ended 2022 nearly flat around $1,810 an ounce after experiencing wild swings throughout the period. The metal reached a near-record high of $2,070 in March at the onset of Russia’s invasion of Ukraine, before dropping to an over 2-year low of almost $1,600 in September on aggressive monetary tightening worldwide. Physical gold demand in India remained muted as domestic prices jumped to their highest level in nearly 10-months, with buying activity across Asian hubs also on hold during the holiday period. Dealers were offering a discount of up to $26 an ounce over official domestic prices down from the last week's discount of $30. Technically market is under short covering as the market has witnessed a drop in open interest by -0.63% to settle at 13763 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 55017-56057.
* Gold jumped as growth concerns dominated sentiment at the start of the year, with swiftly diminishing hopes that Fed could engineer a soft landing.
* IMF head Georgiva warned that 2023 is going to be a tough year as the main engines of growth, are all experiencing weakening activity.
* Investors now look ahead to a raft of data this week that could guide the outlook for growth and monetary policy


Silver

Silver yesterday settled up by 0.5% at 69917 supported by increased demand for precious metals amid recession concerns and looming supply shortages. 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. Limiting the yearly gains, the rise in interest rates from major central banks to combat inflation drove investors out of bullion to interest-bearing securities, while the tight monetary setting reduced demand for silver as an industrial input for electrical conductors, tracking the mid-year decline for copper. 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 21493 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 69026-71566.
* Silver gained supported by increased demand for precious metals amid recession concerns and looming supply shortages.
* Geopolitical risks triggered by the Russian invasion of Ukraine ramped up demand for bullion investments
* COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes


Crude oil

Crude oil yesterday settled down by -2.01% at 6475 as weak demand data from China and a gloomy economic outlook weighed. IMF head Kristalina Georgiva warned that 2023 is going to be a tough year as the main engines of growth, namely the US, Europe and China, are all experiencing weakening activity. China’s swift reopening that could lead to global surge in infections and tougher worldwide restrictions also remain a major risk for markets, though it sparked hopes of a faster recovery in the world’s second largest economy. On the supply side, investors are watching for further actions from Russia after it banned oil exports to foreign buyers that adopt the G7 price cap, as well as the prospect of further production cuts from OPEC+. The US oil benchmark gained about 7% in 2022, a year marked by extreme volatility due mainly to the Ukraine invasion, China’s Covid woes and aggressive rate hikes. The Chinese government has raised export quotas for refined oil products in the first batch for 2023. Traders attributed the increase to expectations of poor domestic demand, as the world's largest crude importer continued to battle waves of COVID-19 infections. Technically market is under fresh selling as the market has witnessed a gain in open interest by 16.2% to settle at 6700 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 6224-6886.
* Crude oil falls as outlook for China, global economy weigh
* IMF head Kristalina Georgiva warned that 2023 is going to be a tough year as the main engines of growth
* The Chinese government has raised export quotas for refined oil products in the first batch for 2023.


Natural gas

Nat.Gas yesterday settled down by -10.34% at 335.7 amid prospects of lower heating demand on forecasts for much warmer-than-normal temperatures through mid-January. Pressuring prices further, the Freeport LNG export plant in Texas, forced to go offline in June following a fire, again delayed the restart to the second half of January, leaving more supply on the domestic market. The US benchmark is now down roughly 60% from its March 2022 peak of approximately $10 as milder weather so far delayed the start of the winter heating season while easing fears of a natural gas crisis, particularly in Europe, added to the bearish tone. Data provider Refinitiv estimated 315 heating degree days (HDDs) over the next two weeks in the lower 48 U.S. states, down from 327 HDDs estimated. The normal is 439 HDDs for this time of year. With the weather expected to turn mild, Refinitiv projected average U.S. gas demand, including exports, would drop from 142.6 bcf per day (bcfd) this week to 111.6 bcfd in the next week. Gas output was up about 10 bcfd over the past four days in the U.S. lower 48 states after dropping to 80.4 bcfd on Saturday, its biggest drop in daily output since the February freeze of 2021. Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.01% to settle at 26687 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 311.9-378.5.
* Natural gas dropped amid prospects of lower heating demand on forecasts for much warmer-than-normal temperatures through mid-January.
* Pressuring prices further, the Freeport LNG export plant in Texas, again delayed the restart to the second half of January
* EIA said utilities pulled 213 billion cubic feet (bcf) of gas from storage due to severe cold


Copper

Copper yesterday settled down by -0.83% at 715.15 as a surge in domestic Covid cases kept sentiment under pressure, though China’s swift reopening sparked hopes of a faster economic recovery. President Xi Jinping said in his New Year’s address that the country faces tough challenges ahead in the fight against Covid-19 and acknowledged divisions in society that led to rare spontaneous protests. China's central bank said it will keep liquidity reasonably ample and maintain the "effective" credit growth to support economic growth and employment. The Caixin China General Manufacturing PMI fell to 49.0 in December 2022 from 49.4 in November, pointing to the lowest print since September, amid a spike in COVID cases that disrupted production. The latest result also marked the fifth straight month of drop in factory activity, compared with market consensus of 48.8, with output, new orders, and export sales all declining further. China's current account surplus was revised slightly higher to USD 144.3 billion in the third quarter of 2022 from a preliminary estimate of USD 144 billion and compared to a USD 82.6 billion surplus in the same period of the previous year. It was the largest current account surplus on record. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.6% to settle at 4187 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 704.9-734.5.
* Copper dropped as a surge in domestic Covid cases kept sentiment under pressure
* China current account surplus revised slightly higher
* China manufacturing shrinks the most in 3 months


Zinc

Zinc yesterday settled down by -0.31% at 269.15 as an overall stronger dollar, worsening COVID-19 situation in China, and global economic slowdown worries weighed on industrial metals. London Metal Exchange (LME) warehouse stocks of the galvanising metal total 36,525 tonnes, the lowest amount this century. Almost 60% of that metal is earmarked for physical load-out, leaving just 15,175 tonnes of live tonnage, no more than a few hours worth of global consumption. Global refined zinc output fell by 3.2% in January-October, according to the ILZSG, matching the drop-off in usage. Production fell in China, Kazakhstan, Canada and Mexico, all of which are major sources of refined metal. But the biggest hit was to European production this year as the region's smelters faced an acute margin squeeze due to the rolling energy crisis. Glencore mothballed its 100,000-tonne per year Portovesme plant in Italy at the end of 2021 and put its 165,000-tonne per year Nordenham smelter in Germany on care and maintenance last month. The Caixin China General Manufacturing PMI fell to 49.0 in December 2022 from 49.4 in November, pointing to the lowest print since September, amid a spike in COVID cases that disrupted production. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.96% to settle at 1952 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 266.4-273.4.
* Zinc dropped as an overall stronger dollar, worsening COVID-19 situation in China, and global economic slowdown worries weighed on industrial metals.
* LME warehouse stocks of the galvanising metal total 36,525 tonnes, the lowest amount this century.
* Global refined zinc output fell by 3.2% in January-October, according to the ILZSG, matching the drop-off in usage.


Aluminium

Aluminium yesterday settled down by -2.17% at 205 as the rapid spread of coronavirus infections and contracting factory activities China heightened traders' concerns of tepid demand. China's official purchasing managers' index (PMI) showed factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as COVID-19 infections swept through production lines across the country. The private Caixin survey, believed to focus on smaller, export-oriented firms compared with the larger official PMI survey, also showed factory activity shrank at a sharper pace in December after Beijing's abrupt reversal of anti-virus measures. The industrial metals markets might not see improving demand and a price rally in the next few months as the headwinds of slow growth will likely dominate the economic landscape for some time. Nonetheless, the dropping of China's stringent "zero-COVID" measures still sparked some hopes for better economic activities in the world's biggest metals consuming market. 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. Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.69% to settle at 3965 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.

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Trading Ideas:

* Aluminium trading range for the day is 200.7-212.3.
* Aluminum dropped as the rapid spread of coronavirus infections and contracting factory activities China heightened traders' concerns of tepid demand.
* China's official PMI showed factory activity shrank for the third straight month in December
* China cbank says will keep liquidity reasonably ample

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 12.5 Rupees to end at 1170.7 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 919 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 1020.9-1045.3.
* In Sambhal spot market, Mentha oil gained  by 12.5 Rupees to end at 1170.7 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 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 7330.2 Rupees dropped -51.75 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.09% to settle at 11190 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 7614-8390.
* Turmeric 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 7330.2 Rupees dropped -51.75 Rupees.
 

Jeera

Jeera yesterday settled up by 1.24% at 33500 as 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 up by 956.4 Rupees to end at 33398.15 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 5589 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 31725-35545.
* Jeera prices gained as sowing in Gujarat, dropped by nearly -8% to 274,995.00 hectares
* Support also seen amid higher demand for the fresh crop and supply tightness.
* 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 up by 956.4 Rupees to end at 33398.15 Rupees per 100 kg.

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