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Gold

Gold yesterday settled up by 0.09% at 50584 as bond yields fell a day before the U.S. Federal Reserve's widely expected 75-basis-point rate hike. The U.S. Federal Reserve is expected to raise interest rates by 75 basis points at the conclusion of its policy meeting on Wednesday. A hike of that magnitude would effectively close out pandemic-era support for the economy. The IMF lowered its growth forecasts for the global economy to 3.2% in 2022 from 3.6% in the April projection, while the outlook for inflation was revised higher to 6.6% in advanced economies (5.7% in April) and 9.5% in emerging and developing economies (vs 8.7%), due to food and energy prices as well as lingering supply-demand imbalances. Meanwhile, the IMF considers risks to the outlook are on the downside, as the war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated; tighter global financial conditions could induce debt distress; renewed COVID-19 outbreaks and lockdowns as well as a further escalation of the property sector crisis might further suppress Chinese growth; and geopolitical fragmentation could impede global trade and cooperation. China's net gold imports via Hong Kong in June jumped by about 390% from the previous month, Hong Kong Census and Statistics Department data showed. Technically market is under short covering as market has witnessed drop in open interest by -23% to settled at 2932 while prices up 48 rupees, now Gold is getting support at 50465 and below same could see a test of 50345 levels, and resistance is now likely to be seen at 50705, a move above could see prices testing 50825.
 

Trading Ideas:
* Gold trading range for the day is 50345-50825.
* Gold prices held steady as bond yields fell a day before the U.S. Federal Reserve's widely expected 75-basis-point rate hike.
* IMF sees lower growth and higher inflation this year
* China's net gold imports via Hong Kong in June jumped by about 390% from the previous month


Silver

Silver yesterday settled up by 0.57% at 54715 as traders awaited a rate hike from the U.S. Federal Reserve but wondered whether hints of a slowing economy may prompt a shift away from its focus on inflation. New home sales in the United States shrank 8.1% from a month earlier to a seasonally adjusted annual rate of 590,000 in June of 2022, well below market expectations of 660,000. It is the lowest reading since April of 2020, as the housing market is cooling due to a rise in mortgage costs. The International Monetary Fund cut global growth forecasts again, warning that downside risks from high inflation and the Ukraine war were materializing and could push the world economy to the brink of recession if left unchecked. Global real GDP growth will slow to 3.2% in 2022 from a forecast of 3.6% issued in April, the IMF said in an update of its World Economic Outlook. It added that world GDP actually contracted in the second quarter due to downturns in China and Russia. The Fund cut its 2023 growth forecast to 2.9% from the April estimate of 3.6%, citing the impact of tighter monetary policy. World growth had rebounded in 2021 to 6.1% after the COVID-19 pandemic crushed global output in 2020 with a 3.1% contraction. Technically market is under short covering as market has witnessed drop in open interest by -5.16% to settled at 23217 while prices up 308 rupees, now Silver is getting support at 54406 and below same could see a test of 54096 levels, and resistance is now likely to be seen at 54940, a move above could see prices testing 55164.
 

Trading Ideas:
* Silver trading range for the day is 54096-55164.
* Silver remained steadied as traders awaited a rate hike from the U.S. Federal Reserve but wondered whether hints of a slowing economy
* SocGen see silver as "extremely vulnerable" to short covering.
* New home sales in the United States shrank 8.1% from a month earlier to a seasonally adjusted annual rate of 590,000 in June of 2022


Crude oil

Crude oil yesterday settled down by -0.62% at 7665 weighed down by an announcement from the Biden administration about more sales from the national oil reserve to fight inflation at the pump. Russia tightened its gas squeeze on Europe as Gazprom said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity. The cut in supplies will leave countries unable to meet their goals to refill natural gas storage ahead of the winter demand period. Germany, Europe's biggest economy, faces potentially rationing gas to industry to keep its citizens warm during the winter months. Morgan Stanley lowered its demand growth forecasts for this year and next. It forecasts Brent crude prices at $110 a barrel in the third quarter and WTI at $107.50, each $20 lower than their previous forecast. The gap between European and international oil benchmark Brent and U.S. benchmark WTI has widened to levels not seen since June 2019 as easing gasoline demand in the United States weighs on U.S. crude while tight supply supports Brent. India cranked up Russian oil imports by 4.7 times in April – May, or by more than 400,000 barrels per day (bpd), year-on-year, thanks to a price discount, the Russian central bank said. Technically market is under long liquidation as market has witnessed drop in open interest by -3.53% to settled at 3166 while prices down -48 rupees, now Crude oil is getting support at 7529 and below same could see a test of 7393 levels, and resistance is now likely to be seen at 7854, a move above could see prices testing 8043.
 

Trading Ideas:
* Crude oil trading range for the day is 7393-8043.
* Crude oil dropped as U.S. decides to sell more from SPR
* Brent premium to U.S. crude hits widest in three years
* Libya oil minister: Oil production is at 1.1mln bpd.


Nat.Gas

Nat.Gas yesterday settled up by 3.44% at 703.7 on prospects of an increasing need for cooling as the weather remains hotter than usual in the United States. Soaring international demand is also adding to the bullish outlook. Russia's war on Ukraine has caused a global energy crunch, with demand for US LNG set to remain elevated partly due to Europe's calls for US exports to help cut reliance on Russian gas. On top of that, the latest EIA's weekly inventory report showed utilities injected just 34 billion cubic feet (bcf) of natural gas into underground storage last week, markedly below median market estimates of a 47 bcf build. The number of rigs drilling for natural gas in the United States rose by 2 this week to 155, data from oil services firm Baker Hughes showed. Horizontal rigs – the type most often used to extract oil or gas from shale – rose by 1 to 687. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 96.1 bcfd so far in July from 95.3 bcfd in June. Refinitiv projected average U.S. gas demand including exports would slide from 101.1 bcfd this week to 100.6 bcfd next week and 99.9 bcfd in two weeks as extreme heat starts to ease in some parts of the country. Technically market is under fresh buying as market has witnessed gain in open interest by 13.15% to settled at 6890 while prices up 23.4 rupees, now Natural gas is getting support at 676.7 and below same could see a test of 649.6 levels, and resistance is now likely to be seen at 736.2, a move above could see prices testing 768.6.
 

Trading Ideas:
* Natural gas trading range for the day is 649.6-768.6.
* Natural gas rose as a persistent heat wave in the United States drove up demand for gas-powered electricity for air conditioning.
* The latest EIA's weekly inventory report showed utilities injected just 34 billion cubic feet (bcf) of natural gas into underground storage last week.
* The number of rigs drilling for natural gas in the United States rose by 2 this week to 155



Copper

Copper yesterday settled up by 0.11% at 633.9 as a growing list of miners have flagged reduced production due to various disruptions, offsetting recession fears that gripped commodity markets since the start of June. To rein in inflation, central banks worldwide have begun rapid interest rises that are likely to stifle economic growth. Chinese miner MMG Ltd said it had suspended its copper production targets for the year following a 60% output drop due to a long protest at its Las Bambas mine in the Peruvian Andes, which significantly disrupted operations. MMG had previously expected to produce 300,000-320,000 tonnes of copper in concentrate during the year at Las Bambas. But during the first half of the year, it managed to produce only 101,000 tonnes, the company said. Antofagasta Plc that operates four copper mines in Chile also slashed its full-year output target to 640-660,000 tonnes last week, citing a leak in an underground pipeline and a water shortage at its flagship project. Meanwhile, copper prices remain more than 30% off the year-to-date high as resurgent Covid-19 outbreaks in top importer China and fears of a global economic slowdown spurred by rising global interest rates continued to pressure metals markets. Technically market is under fresh buying as market has witnessed gain in open interest by 0.33% to settled at 5751 while prices up 0.7 rupees, now Copper is getting support at 628.8 and below same could see a test of 623.6 levels, and resistance is now likely to be seen at 642.1, a move above could see prices testing 650.2.
 

Trading Ideas:
* Copper trading range for the day is 623.6-650.2.
* Copper gains as a growing list of miners have flagged reduced production due to various disruptions
* MMG suspends copper output guidance after Las Bambas protests in Peru
* Antofagasta Plc that operates four copper mines in Chile also slashed its full-year output target to 640-660,000 tonnes


Zinc

Zinc yesterday settled up by 1.32% at 275.95 as data from the National Bureau of Statistics showed that China’s refined zinc output was 549,000 mt in June, down 4.2% year-on-year. The domestic refined zinc production in June was lower than expected mainly due to unexpected output reductions. The global zinc market flipped to a deficit of 3,900 tonnes in May from a revised surplus of 31,000 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a surplus of 10,900 tonnes in April. During the first five months of 2022, ILZSG data showed a surplus of 29,000 tonnes versus a surplus of 44,000 tonnes in the same period of 2021. About 13.5 million tonnes of zinc is produced and consumed each year. The dollar wobbled around just below multi-decade peaks as traders waited on a rate hike decision from the U.S. Federal Reserve and for any clues about whether hints of a slowing economy will prompt a shift away from its focus on inflation. Metals prices have been plagued by weakening demand in top consumer China due to COVID-19 outbreaks and fears of a deepening global economic slowdown that threaten future metals demand as central banks seek to hike interest rates to curb inflation. Technically market is under fresh buying as market has witnessed gain in open interest by 2.67% to settled at 1498 while prices up 3.6 rupees, now Zinc is getting support at 274 and below same could see a test of 272.1 levels, and resistance is now likely to be seen at 278, a move above could see prices testing 280.1.
 

Trading Ideas:
* Zinc trading range for the day is 272.1-280.1.
* Zinc gains as China’s refined zinc output was 549,000 mt in June, down 4.2% year-on-year.
* The domestic refined zinc production in June was lower than expected mainly due to unexpected output reductions.
* The global zinc market flipped to a deficit of 3,900 tonnes in May from a revised surplus of 31,000 tonnes a month earlier



Aluminium

Aluminium yesterday settled up by 0.65% at 210.65 as the market sentiment eased due to better fixed asset investment in the first half of 2022, which rose 18.8% YoY, and as there was no further hawkish remarks from US Fed officials before the monetary meeting. In addition, the market has not yet heard any hawkish remarks from the US Federal Reserve, and market expectations tend to moderate, reducing the pressure on commodities. On top of that, top consumer China continued to increase production as smelters recovered from last year’s aggressive energy efficiency targets and recent coronavirus-induced halts. Some aluminium smelters in Sichuan have reduced production, but oversupply pressure remains strong. In terms of demand, downstream consumption remained poor. The operating rates of major aluminium processing companies were basically stable last week. Given the poor fundamentals, it is expected that aluminium prices will remain under pressure. Aluminium stocks at three major Japanese ports rose 2.9% to 369,800 tonnes at the end of June from 359,400 tonnes at the end of May, Marubeni Corp said. Global primary aluminium output in June rose 1.95% year on year to 5.65 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.33 million tonnes in June, the IAI data showed. Technically market is under short covering as market has witnessed drop in open interest by -9.33% to settled at 2848 while prices up 1.35 rupees, now Aluminium is getting support at 209.7 and below same could see a test of 208.6 levels, and resistance is now likely to be seen at 211.8, a move above could see prices testing 212.8.
Trading Ideas:
* Aluminium trading range for the day is 208.6-212.8.
*Aluminium rose as the market sentiment eased due to better fixed asset investment in the first half of 2022
* In addition, the market has not yet heard any hawkish remarks from the US Federal Reserve, and market expectations tend to moderate
* China continued to increase production as smelters recovered from last year’s aggressive energy efficiency targets and recent coronavirus-induced halts.


Mentha oil

Mentha oil yesterday settled up by 0.8% at 1018.7 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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 we forecast 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil dropped by -17 Rupees to end at 1112.6 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 4.95% to settled at 1549 while prices up 8.1 rupees, now Mentha oil is getting support at 1012.7 and below same could see a test of 1006.6 levels, and resistance is now likely to be seen at 1023.2, a move above could see prices testing 1027.6.
 

Trading Ideas:
* Mentha oil trading range for the day is 1006.6-1027.6.
* In Sambhal spot market, Mentha oil dropped  by -17 Rupees to end at 1112.6 Rupees per 360 kgs.
* Mentha oil gained amid low production this season and improving demand post-pandemic.
* In the month of May 2022 around 209.90 tonnes Mentha was exported as against 170.22 in April 2022 showing a rise of 23.31%.
* In the month of May 2022 around 209.90 tonnes of Mentha was exported as against 179.76 in May 2021 showing a rise of 16.77%.


Turmeric

Turmeric yesterday settled up by 1.51% at 7806 amid expectations of decline in sown area in the ongoing kharif sowing season. Mandi arrivals of Turmeric, at all-India level, 0.22 lakh tonnes, marking a decline of 38% on m-o-m basis and 48% on y-o-y basis. The major Turmeric producing states such as Telangana, Maharashtra witnessed fall in mandi arrivals during the month of July. Turmeric sowing for marketing year 2023 has started across major production states. In the beginning of June, with the delay in monsoon progress over key Turmeric growing states like Andhra Pradesh, Maharashtra and Tamil Nadu, Turmeric sowings remained sluggish. Stockists have remained inactive due to availability of stock in Marathwada region. As per market feedback, in the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region. Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021. In the month of May 2022 around 17,137.15 tonnes turmeric was exported as against 13762.59 in April 2022 showing a rise of 24.51%. In the month of May 2022 around 17,137.15 tonnes of turmeric was exported as against 13,598.88 in May 2021 showing an increase of 26.02%. In Nizamabad, a major spot market in AP, the price ended at 8062.5 Rupees gained 44.5 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.46% to settled at 14860 while prices up 116 rupees, now Turmeric is getting support at 7660 and below same could see a test of 7516 levels, and resistance is now likely to be seen at 7910, a move above could see prices testing 8016.
 

Trading Ideas:
* Turmeric trading range for the day is 7516-8016.
* Turmeric prices remained supported amid expectations of decline in sown area in the ongoing kharif sowing season.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
# Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021.
# In Nizamabad, a major spot market in AP, the price ended at 8062.5 Rupees gained 44.5 Rupees.


Jeera

Jeera yesterday settled up by 0.64% at 23650 as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices in coming months. Arrivals also observed to be less during the month. Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month supported by decrease in arrivals in Rajasthan as well as in Gujarat. However, mandi arrivals were also lower by 39% compared to the corresponding period of the previous year. As per market feedback, export demand has decreased as compared to corresponding period of the previous year. The reason behind decline in export demand was lower exports to China, as the country had imposed lockdown amid resurgence of Covid. In last 3 years Jeera export was observed to be 7.30 Lakh Tonnes out of which 2.01 Lakh Tonnes was exported to China i.e 28% of total jeera exported. As per preliminary estimates, all-India Jeera production is expected to fall in the Marketing year 2022-23 (April-March) by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings. As per Fourth advance estimates released by Govt of Gujarat Jeera production is likely to fall by 45% to 2.22 lakh tonnes over the previous year. Area covered under cumin seed in Gujarat and Rajasthan state (considered together) has decreased by 28% over last year. In Unjha, a key spot market in Gujarat, jeera edged up by 8 Rupees to end at 23336.9 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -3.4% to settled at 10749 while prices up 150 rupees, now Jeera is getting support at 23340 and below same could see a test of 23030 levels, and resistance is now likely to be seen at 23830, a move above could see prices testing 24010.
 

Trading Ideas:
* Jeera trading range for the day is 23030-24010.
* Jeera prices remained supported as supply was observed to be less as farmers and stockists were holding stocks
* Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month
* 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 8 Rupees to end at 23336.9 Rupees per 100 kg.


Cotton

Cotton yesterday settled up by 2.77% at 44520 as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. According to government sources, if rains continue to hit the State for the next few days more crop is likely to get damaged. However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares. Looking at the current trend, cotton sowing in Maharashtra is expected to cross 4.2 million hectares. In Gujarat, it would be around 2.7 million hectares. The cotton acreage in north will be around 1.5 million hectares and the same for southern states is likely to remain at around 3.5-4.0 million hectare. Reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed. In Punjab, area under cotton cultivation dips to lowest since 2010, also Cotton crop in Punjab is on radar for second straight year as attack of whitefly, pink bollworm seen, as per the report. China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. In spot market, Cotton dropped by -110 Rupees to end at 41760 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 14% to settled at 912 while prices up 1200 rupees, now Cotton is getting support at 43520 and below same could see a test of 42530 levels, and resistance is now likely to be seen at 45140, a move above could see prices testing 45770.
 

Trading Ideas:
* Cotton trading range for the day is 42530-45770.
* Cotton gains as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State.
* However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous 12 million hectares.
* The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month.
* In spot market, Cotton dropped  by -110 Rupees to end at 41760 Rupees.

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