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Gold

Gold yesterday settled down by -0.07% at 54260 on bets that the U.S. Federal Reserve is close to halting its rate hike cycle. Fed futures are currently pricing in a terminal rate of below 5 percent by the middle of next year. Federal Reserve Chair Jerome Powell said the central bank will deliver more interest rate hikes next year even as the economy slips towards a possible recession. The upcoming U.S. core personal consumption expenditure (PCE) numbers on Friday could provide a catalyst for a strong move higher. The U.S. Commerce Department is due to release its report on personal income and spending this week, which includes a reading on inflation said to be preferred by the Fed. The final U.S. GDP data for the quarter ended September 2022 is scheduled to be released on Thursday. The Bank of Japan end its two-day policy meeting on Tuesday, with economists expecting no major change in policy. The Japanese yen touched a multi-day high against the U.S. dollar earlier today on speculation that the Bank of Japan may consider a shift in monetary policy goals amid rising inflation pressures. In China, COVID-19 is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.18% to settle at 14744 while prices are down -40 rupees, now Gold is getting support at 54132 and below same could see a test of 54003 levels, and resistance is now likely to be seen at 54440, a move above could see prices testing 54619.
Trading Ideas:
* Gold trading range for the day is 54003-54619.
* Gold steadied on bets that the U.S. Federal Reserve is close to halting its rate hike cycle.
* Fed’s Powell said the central bank will deliver more interest rate hikes next year even as the economy slips towards a possible recession.
* Fed futures are currently pricing in a terminal rate of below 5 percent by the middle of next year.


Silver

Silver yesterday settled down by -0.2% at 67512 as investors continued to mull over the Federal Reserve’s rate hike path and the chances that it could tip the world’s largest economy into recession. Meanwhile, the metal came under pressure last week after the Federal Reserve delivered a more moderate 50 basis point rate hike, though it projected a terminal rate of 5.1% next year, higher than previously indicated. The European Central Bank followed suit, raising its policy rate by 50 basis points and signaling more increases in an effort to bring inflation down to sustainable levels. Monetary authorities in the UK. Switzerland, Norway and the Philippines also tightened policy further last week. Global demand for silver is expected to rise 16% this year to 1.21 billion ounces, creating the biggest deficit in decades, according to the Silver Institute. Use of silver by industry, for jewellery and silverware and for bars and coins for retail investors were all forecast to reach record levels, the institute said. Automakers are using more silver as the amount of electronics in vehicles increases, but the sector accounts for only around 5% of total demand. Solar panels account for around 10% of silver demand. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.44% to settle at 19157 while prices are down -138 rupees, now Silver is getting support at 67025 and below same could see a test of 66538 levels, and resistance is now likely to be seen at 68133, a move above could see prices testing 68754.
Trading Ideas:
* Silver trading range for the day is 66538-68754.
* Silver traded ibn range as investors continued to mull over the Fed’s rate hike path
* Fed delivered a more moderate 50 basis point rate hike, though it projected a terminal rate of 5.1% next year
* Investors digested data showing US retail sales activity and manufacturing PMI declined more than expected


Crude oil

Crude oil yesterday settled up by 1.5% at 6307 as optimism over the Chinese economy outweighed concern over a global recession. China, the world's top crude oil importer, is experiencing its first of three expected waves of COVID-19 cases after Beijing relaxed mobility restrictions but plans to step up support for the economy in 2023. Oil was supported by the U.S. Energy Department saying that it will begin repurchasing crude for the Strategic Petroleum Reserve - the first purchases since releasing a record 180 million barrels from the reserve this year. Oil output from the Permian shale basin in January is set to touch a record 5.6 million barrels per day (bpd), the U.S. forecast, but the increase is a third of September's pace. Output in the biggest U.S. shale oil basin is set to rise by about 37,000 bpd, the smallest gain in seven months, based on projections from the U.S. Energy Information Administration (EIA) in its monthly drilling productivity report. Gains slowed as some of the largest firms are warning of overworked oilfields and less productive new wells. Overall U.S. output is forecast to reach a record 9.32 million bpd in January, according to the EIA, up only 94,500 bpd over the prior month. Technically market is under short covering as the market has witnessed a drop in open interest by -2.18% to settle at 8274 while prices are up 93 rupees, now Crude oil is getting support at 6195 and below same could see a test of 6083 levels, and resistance is now likely to be seen at 6391, a move above could see prices testing 6475.
Trading Ideas:
* Crude oil trading range for the day is 6083-6475.
* Crude oil bounces as China demand hopes offset recession fears
* Reopening of Chinese economy buoys demand hopes
* Rising interest rates and recession fears weigh


Nat.Gas

Nat.Gas yesterday settled down by -10.49% at 489.1 on forecasts of milder weather and lower heating demand in late December. Recent data showed that natural gas flowing towards US LNG terminals rose to 13 bcf per day, the most since June, pointing to firm international demand. At the same time, extreme cold from North Dakota to Texas resulted in the freeze of oil and gas wells, lowering production. Meanwhile, the Freeport LNG export plant in Texas, forced to go offline in June following a fire, expects to bring operations back online only by year's end, leaving more supply on the domestic market. The number of rigs drilling for natural gas in the United States rose by 1 this week to 154, data from oil services firm Baker Hughes showed. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. On a daily basis, however, output was on track to drop about 2.4 bcfd over the past four days to a preliminary five-week low of 98.3 bcfd on Friday as freezing weather blankets parts of Texas, Oklahoma and North Dakota, causing well freeze-offs. Technically market is under fresh selling as the market has witnessed a gain in open interest by 110.32% to settle at 11029 while prices are down -57.3 rupees, now Natural gas is getting support at 471.1 and below same could see a test of 453 levels, and resistance is now likely to be seen at 521.5, a move above could see prices testing 553.8.
Trading Ideas:
* Natural gas trading range for the day is 453-553.8.
* Natural gas dropped on forecasts of milder weather and lower heating demand in late December.
* Data showed that natural gas flowing towards US LNG terminals rose to 13 bcf per day, the most since June
* At the same time, extreme cold from North Dakota to Texas resulted in the freeze of oil and gas wells, lowering production.


Copper

Copper yesterday settled up by 0.43% at 705.45 supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government. The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy before long. But for now, demand remains weak and the country is gripped by a rise in COVID-19 infections that some fear could kill more than 1.5 million in coming months. Hopes for looser Chinese restrictions and broader economic recovery next year have lifted prices since November. A World Economics survey showed China's business confidence had fallen to its lowest since January 2013. Yangshan copper import premiums fell to $52.50 a tonne from about $145 in early November, indicating lower demand for overseas metal. Metals prices derived some support from fears of low inventories and supply after Panama ordered operations to halt at a copper mine owned by Canada-based First Quantum Minerals. The People's Bank of China injected a total of CNY 85 billion via reverse repos on Monday, including CNY 9 billion through the seven-day tenor and CNY 76 billion through the 14-day tenor, while keeping the rate unchanged at 2% and 2.15%, respectively. Technically market is under short covering as the market has witnessed a drop in open interest by -8.07% to settle at 4180 while prices are up 3 rupees, now Copper is getting support at 702.5 and below same could see a test of 699.5 levels, and resistance is now likely to be seen at 708.6, a move above could see prices testing 711.7.
Trading Ideas:
* Copper trading range for the day is 699.5-711.7.
* Copper prices rose supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government.
* The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy.
* Hopes for looser Chinese restrictions and broader economic recovery next year have lifted prices since November.


Zinc

Zinc yesterday settled down by -1.04% at 270.25 as increasing global recession concerns hampered demand expectations. Still, weighing on the sentiment was a hawkish U.S. Federal Reserve that lead to fears that longer interest rate hikes would exacerbate demand for metals. However, downside seen limited supported by top metals consumer China's pledge to stabilise its COVID-ravaged economy and as tight global stockpiles fuelled supply concerns. China will focus on stabilising its $17-trillion economy in 2023 and step up policy adjustments to ensure key targets are hit, said a statement following an agenda-setting meeting attended by President Xi Jinping and his senior officials. The global zinc market deficit eased to 72,400 tonnes in October from a revised deficit of 99,900 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 103,000 tonnes in September. During the first 10 months of 2022, ILZSG data showed a deficit of 117,000 tonnes versus a deficit of 125,000 tonnes in the same period of 2021. The People's Bank of China injected a total of CNY 85 billion via reverse repos on Monday, including CNY 9 billion through the seven-day tenor and CNY 76 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 -1.72% to settle at 2289 while prices are down -2.85 rupees, now Zinc is getting support at 268.2 and below same could see a test of 266 levels, and resistance is now likely to be seen at 273.4, a move above could see prices testing 276.4.
Trading Ideas:
* Zinc trading range for the day is 266-276.4.
* Zinc dropped as increasing global recession concerns hampered demand expectations.
* Still, weighing on the sentiment was a hawkish Fed that lead to fears that longer interest rate hikes would exacerbate demand for metals.
* PBOC Injects CNY 85 Billion into Market



Aluminium

Aluminium yesterday settled down by -0.52% at 208.7 amid persistent fears of a demand-sapping global recession triggered by an aggressive tightening campaign from major central banks. Alcoa, the largest US aluminum producer, has warned investors that high energy and raw material costs and a fall in aluminum prices are putting pressure on margins. At present, the focus of the supply side is in Guizhou. If aluminium smelters in the province reduce production by 30%, the domestic operating capacity will be affected. However, there has been no large-scale production reduction in the province. The People's Bank of China injected a total of CNY 85 billion via reverse repos on Monday, including CNY 9 billion through the seven-day tenor and CNY 76 billion through the 14-day tenor, while keeping the rate unchanged at 2% and 2.15%, respectively. China's aluminium imports in November fell 35.7% from a year earlier as a result of mounting domestic supply, also as the COVID-hit economy continued to temper demand for the light metal. The country brought in 255,744 tonnes, including primary metal and unwrought, alloyed aluminium, last month, according to data from the General Administration of Customs. With easing power restrictions on industrial users this year, smelters in China ramped up their production. Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.14% to settle at 3979 while prices are down -1.1 rupees, now Aluminium is getting support at 207.5 and below same could see a test of 206.2 levels, and resistance is now likely to be seen at 210.2, a move above could see prices testing 211.6.
Trading Ideas:
* Aluminium trading range for the day is 206.2-211.6.
* Aluminium dropped amid persistent fears of a demand-sapping global recession triggered by an aggressive tightening campaign from major central banks.
* China Nov aluminium imports fall amid rising domestic supply
* PBoC injected a total of CNY 85 billion via reverse repos on Monday, including CNY 9 billion through the seven-day tenor


Mentha oil

Mentha oil yesterday settled up by 1.79% at 1017.3 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 10.8 Rupees to end at 1156.2 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -11.09% to settle at 465 while prices are up 17.9 rupees, now Mentha oil is getting support at 1010.4 and below same could see a test of 1003.6 levels, and resistance is now likely to be seen at 1022, a move above could see prices testing 1026.8.
Trading Ideas:
* Mentha oil trading range for the day is 1003.6-1026.8.
* In Sambhal spot market, Mentha oil gained  by 10.8 Rupees to end at 1156.2 Rupees per 360 kgs.
* Mentha oil 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 up by 1.45% at 8406 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 7425.85 Rupees gained 61.5 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.67% to settle at 8445 while prices are up 120 rupees, now Turmeric is getting support at 8268 and below same could see a test of 8132 levels, and resistance is now likely to be seen at 8492, a move above could see prices testing 8580.
Trading Ideas:
* Turmeric trading range for the day is 8132-8580.
* Turmeric 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 7425.85 Rupees gained 61.5 Rupees.


Jeera

Jeera yesterday settled up by 2.92% at 28005 as sowing In Gujarat, dropped by nearly -5% with 261,635.00 hectares against sown area of 2021 which was 274,298.00 hectares as on 19-12-2022. 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 622.15 Rupees to end at 27279.55 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -2.32% to settle at 7341 while prices are up 795 rupees, now Jeera is getting support at 27560 and below same could see a test of 27110 levels, and resistance is now likely to be seen at 28350, a move above could see prices testing 28690.
Trading Ideas:
* Jeera trading range for the day is 27110-28690.
* Jeera prices gained to all time high as sowing In Gujarat, dropped by nearly -5% with 261,635.00 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 622.15 Rupees to end at 27279.55 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -2.29% at 29840 as India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales. According to the Punjab Mandi Board data, cotton crop has seen the slowest arrival in the last five years even as the average rate is the highest since 2018. Punjab is expected to have produced 20 lakh quintals against 29 lakh quintals produced in the 2021-22 season. China's agriculture ministry lowered its outlook for cotton consumption, as slowing global economic growth continues to hurt demand for textiles. China's cotton consumption in the 2022/23 crop year that began in September is seen at 7.5 million tonnes, 200,000 tonnes lower than in last month's forecast, the ministry said in its monthly Chinese Agricultural Supply and Demand Estimates (CASDE) report. According to USDA, World Cotton and Market Report, Global cotton production is estimated down by 700,000 bales from the previous month to 115.7 million, largely owing to lower production in Pakistan. Pakistan production has fallen due to floods and poor weather. Global stocks are forecasted higher with consumption projected lower more than 3.0 million bales. This is the seventh consecutive monthly decline for global consumption. In spot market, Cotton dropped by -760 Rupees to end at 30590 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.59% to settle at 1533 while prices are down -700 rupees, now Cotton is getting support at 29300 and below same could see a test of 28760 levels, and resistance is now likely to be seen at 30610, a move above could see prices testing 31380.
Trading Ideas:
* Cotton trading range for the day is 28760-31380.
* Cotton dropped as India’s domestic cotton demand for the 2022-23 season estimated to be lower by about 18 lakh bales at 300 lakh bales
* China cuts cotton demand outlook on slowing global growth
* USDA cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton
* In spot market, Cotton dropped  by -760 Rupees to end at 30590 Rupees.

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