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Gold

Gold yesterday settled up by 0.08% at 55017 on expectations of slower interest rate hikes by the U.S. Federal Reserve after being beaten down from record highs earlier this year. Initial unemployment claim data pointed to a cooling off in the U.S. labour market, easing worries about harsher Federal Reserve rate hikes next year. President Joe Biden signed a $1.66 trillion bill funding the U.S. government for fiscal year 2023, the White House said in a statement. 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. Meanwhile in China, premiums stood at $12 an ounce from last week' $8-16 range over global benchmark spot prices. Demand in China is, however, expected to pick up during the Chinese New Year period between Jan. 21 and Jan. 27. China's net gold imports via Hong Kong in November fell by about 10% from the previous month, Hong Kong Census and Statistics Department data showed. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.4% to settle at 13921 while prices are up 46 rupees, now Gold is getting support at 54877 and below same could see a test of 54736 levels, and resistance is now likely to be seen at 55142, a move above could see prices testing 55266.

Trading Ideas:

* Gold trading range for the day is 54736-55266.
* Gold prices edged up on expectations of slower interest rate hikes by the Fed after being     beaten down from record highs earlier this year.
* Biden signs $1.66 trillion FY 2023 government funding bill
* India demand slows as high prices, holidays put off customers


Silver

Silver yesterday settled down by -0.51% at 69413 as traders remained focused on the outlook for China after several countries, including the U.S., have decided to insist on negative Covid tests for travelers arriving from China. Silver prices gained over 10% in 2022 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 73000. 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. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.19% to settle at 21172 while prices are down -354 rupees, now Silver is getting support at 68748 and below same could see a test of 68084 levels, and resistance is now likely to be seen at 70038, a move above could see prices testing 70664.

Trading Ideas:

* Silver trading range for the day is 68084-70664.
* Silver dropped as traders remained focused on China after several countries, have decided to insist on negative Covid tests for travelers arriving from China.
* Silver prices gained over 10% in 2022 supported by increased demand for precious metals amid recession concerns and looming supply shortages.
* Looming supply concerns drove silver to outperform gold and palladium in 2022.


Crude oil

Crude oil yesterday settled up by 1.27% at 6555 as optimism about increased demand for fuel from China after the country abruptly ended its Covid restrictions helped as well. Oil prices were also supported by recent reports in the media about Russia's Deputy Prime Minister Alexander Novak saying that Russia may cut production by 500,000 - 700,000 barrels per day. 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 released Friday by the U.S. Energy Information Administration. Shipments within the United States in October fell by 59,000 barrels per day (bpd) from the previous month to 109,000 bpd, while shipments from Canada to the United states rose by 37,000 barrels per day (bpd) from the previous month to 134,000 bpd. Money managers raised their net long U.S. crude futures and options positions in the week to December 27, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group raise its combined futures and options position in New York and London by 6,019 contracts to 187,659 during the period. According to a report from Baker Hughes, the total rig count in the U.S. stayed at 779 this week. Technically market is under short covering as the market has witnessed a drop in open interest by -4.02% to settle at 5586 while prices are up 82 rupees, now Crude oil is getting support at 6473 and below same could see a test of 6390 levels, and resistance is now likely to be seen at 6614, a move above could see prices testing 6672.

Trading Ideas:

* Crude oil trading range for the day is 6390-6672.
* Crude oil gains as optimism about increased demand for fuel from China after the country abruptly ended its Covid restrictions helped as well.
* Brent crude logs 10% gain in 2022, WTI records 7% increase
* Year marked by Ukraine war supply concerns, Chinese demand drop

Natural gas
 

Nat.Gas yesterday settled up by 0.51% at 377.8 after the EIA said utilities pulled 213 billion cubic feet (bcf) of gas from storage due to severe cold in the week ended Dec. 23, exceeding the 201 bcf decline analysts forecast in a poll. That compared with a decrease of 125 bcf in the same week last year and a five-year (2017-2021) average decline of 106 bcf. 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, pending regulatory approval. 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 short covering as the market has witnessed a drop in open interest by -0.94% to settle at 24797 while prices are up 1.9 rupees, now Natural gas is getting support at 368 and below same could see a test of 358.1 levels, and resistance is now likely to be seen at 387.3, a move above could see prices testing 396.7.
 

Trading Ideas:

* Natural gas trading range for the day is 358.1-396.7.
* Natural gas recovered after the EIA said utilities pulled 213 billion cubic feet (bcf) of gas from storage due to severe cold
* However, concerns eased about supply disruptions including wells and pipes freezing due to extreme cold.
* Estimated 315 heating degree days (HDDs) over the next two weeks in the lower 48 U.S. states, down from 327 HDDs estimated.


Copper
 

Copper yesterday settled down by -0.56% at 718.7 as an overall stronger dollar, worsening COVID-19 situation in China, and global economic slowdown worries weighed on industrial metals. China will boost fiscal spending "appropriately" in 2023 to support the slowing economy, focusing on tech innovation and key strategic sectors, the finance ministry said. 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. Copper output in Chile, the world's largest producer of the metal, fell 5.5% year-on-year to 459,229 tonnes in November, the country's statistics agency INE said. The agency said the drop was partly due to lower ore grade and operational problems affecting major companies in the sector. Some copper deposits have also been affected by less water availability, fatal accidents and maintenance issues. Chile is the world's top copper producer and is home to global giants like Codelco, BHP, Glencore, Anglo American, Freeport and Antofagasta. Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.52% to settle at 4211 while prices are down -4.05 rupees, now Copper is getting support at 715.5 and below same could see a test of 712.3 levels, and resistance is now likely to be seen at 723.5, a move above could see prices testing 728.3.

Trading Ideas:

* Copper trading range for the day is 712.3-728.3.
* Copper dropped as an overall stronger dollar, worsening COVID-19 situation in China, and global economic slowdown worries weighed.
* China will boost fiscal spending "appropriately" in 2023 to support the slowing economy, focusing on tech innovation and key strategic sectors
* Chile copper production down 5.5% in November


Zinc

Zinc yesterday settled down by -0.28% at 268 as China produced 605,000 mt of zinc in November, an increase of 2.9% year on year. Output at some smelters topped their expectations and this pushed domestic refined zinc output higher in November. Smelters across China resumed production in December. SMM understood that the smelters in Sichuan resumed normal production and contributed the main output growth. The impact of the COVID-19 at some smelters in Qinghai gradually eased and they will gradually resume normal production. However, some smelters in Yunnan have slightly reduced their output as the impact of the COVID-19 lingers. The People’s Bank of China injected a total CNY 202 billion of reverse repos into the banking system on Wednesday, including CNY 189 billion through the seven-day tenor and CNY 13 billion through the 14-day tenor, while keeping the rate unchanged at 2% and 2.15%, respectively. It was the eighth straight session of the big injection to maintain the reasonable and sufficient liquidity in the banking system at the end of the year, according to an online statement. Last week, the PBOC injected a net of CNY 704 billion into the banking system, the largest weekly injection since late October. Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.94% to settle at 2113 while prices are down -0.75 rupees, now Zinc is getting support at 266.9 and below same could see a test of 265.6 levels, and resistance is now likely to be seen at 270.1, a move above could see prices testing 272.

Trading Ideas:

* Zinc trading range for the day is 265.6-272.
* Zinc dropped as China produced 605,000 mt of zinc in November, an increase of 2.9% year on year.
* Output at some smelters topped their expectations and this pushed domestic refined zinc output higher in November.
* The People’s Bank of China injected a total CNY 202 billion of reverse repos into the banking system


Aluminium

Aluminium yesterday settled down by -0.95% at 208.5 as China's imports of primary aluminium jumped to a one-year high of 110,700 tonnes in November in a significant reversal of the recent trend. The country flipped to net exporter in the first half of 2022, with primary metal shipped as far as Europe and the United States to capitalise on sky-high physical premiums. The premiums are now much reduced. The domestic aluminium supply growth is likely to fall short of expectations amid power rationing in south-west China. LME aluminium inventories fell back again last week after a slight rebound. The latest inventory level was 466,600 mt, which is lowest prices in the past two months. SHFE aluminium inventory kept picking up and increased by 3.43% on a weekly basis to 95,539 mt. On the consumption side, the downstream processing sectors were in the seasonal low, and the operating rates were further weighed on by the spiking number of covid-infected employees. The People’s Bank of China injected a total CNY 202 billion of reverse repos into the banking system on Wednesday, including CNY 189 billion through the seven-day tenor and CNY 13 billion through the 14-day tenor, while keeping the rate unchanged at 2% and 2.15%, respectively. Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.7% to settle at 4053 while prices are down -2 rupees, now Aluminium is getting support at 207.4 and below same could see a test of 206.2 levels, and resistance is now likely to be seen at 210.6, a move above could see prices testing 212.6.
 

Trading Ideas:

* Aluminium trading range for the day is 206.2-212.6.
* Aluminum dropped as China's imports of primary aluminium jumped to a one-year high of 110,700 tonnes in November
* The domestic aluminium supply growth is likely to fall short of expectations amid power rationing in south-west China.
* SHFE aluminium inventory kept picking up and increased by 3.43% on a weekly basis to 95,539 mt.


Mentha oil

Mentha oil yesterday settled down by -0.42% at 1018.9 on profit booking after prices gained 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 17.6 Rupees to end at 1173.1 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.46% to settle at 959 while prices are down -4.3 rupees, now Mentha oil is getting support at 1013.8 and below same could see a test of 1008.6 levels, and resistance is now likely to be seen at 1025.6, a move above could see prices testing 1032.2.

Trading Ideas:

* Mentha oil trading range for the day is 1003.5-1029.1.
* In Sambhal spot market, Mentha oil gained  by 14.4 Rupees to end at 1173.1 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained 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 -0.24% at 8288 on profit booking after prices gained as amid buying activities has increased amid weaker production for upcoming season. Not only weaker production, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh will also help prices to trade on positive note. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. 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 7426.85 Rupees dropped -31.15 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.85% to settle at 10680 while prices are down -20 rupees, now Turmeric is getting support at 8222 and below same could see a test of 8156 levels, and resistance is now likely to be seen at 8342, a move above could see prices testing 8396.

Trading Ideas:

* Turmeric trading range for the day is 8194-8390.
* Turmeric dropped on profit booking after prices gained as buying activities has increased amid weaker production for upcoming season.
* However, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh limited downside
* 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 7400.75 Rupees dropped -26.1 Rupees.

Jeera

Jeera yesterday settled up by 1.06% at 30380 as sowing In Gujarat, dropped by nearly -6% with 268,775.00 hectares against sown area of 2021 which was 286,514.00 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 321.85 Rupees to end at 29546.25 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.03% to settle at 6930 while prices are up 320 rupees, now Jeera is getting support at 29960 and below same could see a test of 29545 levels, and resistance is now likely to be seen at 30640, a move above could see prices testing 30905.
 

Trading Ideas:

* Jeera trading range for the day is 29955-32275.
* Jeera prices gained as sowing in Gujarat, dropped by nearly -6% to 268,775 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 405.4 Rupees to end at 29546.25 Rupees per 100 kg.

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