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Gold

Gold yesterday settled up by 2.77% at 51917 as India increased its import tax on gold in a surprise move that aims to reduce inflows to the world’s second-largest consumer, after the country’s ballooning trade gap pushed its currency to a record low. The import duty on gold was increased to 12.5% from 7.5%, according to a government notice dated June 30. India’s gold purchases had been picking up in the past year after buying slumped during the pandemic and the country had imported the most gold in a decade in 2021, according to the World Gold Council. Indians consider gold to be auspicious and a store of value, and the country relies entirely on imports to meet demand. Physical gold dealers in India offered steep discounts as demand remained weak, with an import tax hike likely to further sap interest, while top consumer China saw activity bounce back slowly as it emerged from COVID-led curbs. India raised its basic import duty on gold to 12.5% from 7.5% as the government tries to bring down the trade deficit. This week, discounts rose to about $40 an ounce over official domestic prices from last week's $8 discounts. In China, gold changed hands at $4-$7 an ounce premiums over global benchmark spot prices. In Hong Kong, gold was sold at anywhere between 80 cents an ounce to $1.80 premiums. Technically market is under fresh buying as market has witnessed gain in open interest by 1.24% to settled at 11142 while prices up 1400 rupees, now Gold is getting support at 51086 and below same could see a test of 50254 levels, and resistance is now likely to be seen at 52391, a move above could see prices testing 52864.

Trading Ideas:
* Gold trading range for the day is 50254-52864.
* Gold prices rose due to increase in import duty tax in by India.
* India raises import duty on bullion to 12.5% from 7.5% earlier
* Imports in 2021 surged to the highest in a decade: WGC

Silver

Silver yesterday settled down by -1.21% at 58175 as a stronger dollar and prospects of higher interest rates eroded its safe-haven appeal. The dollar is on track to gain markedly against a basket of other major currencies as the Federal Reserve led a global wave of aggressive monetary tightening to combat surging inflation. Fed policymakers indicated this week a strong commitment to bringing down inflation even at the risk of a recession, signaling another 75 basis point rate increase in July. Global manufacturing struggled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while China's strict COVID-19 lockdowns and Russia's invasion of Ukraine added to supply chain disruptions, surveys showed. From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic. They were the latest signs pointing to the risk of all-out recession in the global economy, coming after the world's top chipmakers said they were facing waning demand and as central bankers warned of painful interest rate hikes ahead. The slowdown in the United States was accompanied by declines in new orders and employment. Technically market is under fresh selling as market has witnessed gain in open interest by 7.38% to settled at 20106 while prices down -712 rupees, now Silver is getting support at 57208 and below same could see a test of 56241 levels, and resistance is now likely to be seen at 59471, a move above could see prices testing 60767.

Trading Ideas:
* Silver trading range for the day is 56241-60767.
* Silver dropped as a stronger dollar and prospects of higher interest rates eroded its safe-haven appeal.
* The dollar is on track to gain as the Federal Reserve led a global wave of aggressive monetary tightening to combat surging inflation.
* U.S. factory activity slows to two-year low

Crude oil

Crude oil yesterday settled up by 2.6% at 8605 as investors balanced a tightening market against a backdrop of weakening global economic growth and subdued demand. The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, has said that they would stick to a previously decided output boost in August despite calls for bigger increases to rein in crude prices. OPEC+ confirmed the plan to increase production by 648,000 bpd in August, according to an OPEC statement released after the meeting. The statement cited “current oil market fundamentals and the consensus on its outlook” as the reasons for the decision. At its last meeting in early June, OPEC+ decided to advance the planned output increases of 432,000 barrels per day (bpd) for September and redistribute it equally to the previous two months, thus raising production by 648,000 bpd in July and August. U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped 7.0 million barrels last week to 497.9 million barrels, its lowest since April 1986, U.S. Energy Information Administration (EIA) said. EIA also said U.S. crude production rose by 100,000 barrels per day (bpd) to 12.1 million bpd in the week to June 24, its highest level since April 2020. Technically market is under fresh buying as market has witnessed gain in open interest by 17.5% to settled at 4961 while prices up 218 rupees, now Crude oil is getting support at 8380 and below same could see a test of 8154 levels, and resistance is now likely to be seen at 8730, a move above could see prices testing 8854.

Trading Ideas:
* Crude oil trading range for the day is 8154-8854.
* Crude oil gains as investors balanced a tightening market against a backdrop of weakening global economic growth and subdued demand.
* U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped 7.0 million barrels last week to 497.9 million barrels, its lowest since April 1986
* OPEC+ has said that they would stick to a previously decided output boost in August despite calls for bigger increases to rein in crude prices.

Natural Gas

Nat.Gas yesterday settled up by 0.29% at 449 due to a technical bounce and forecasts for hotter weather and higher demand over the next two weeks than previously expected. U.S. pipeline safety regulators said they found unsafe conditions at Freeport and will not allow the plant to restart until an outside analysis is complete. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. So long as the plant remains shut, that gas will remain in the United States and allow utilities to boost the country's low stockpiles ahead of next winter. Data provider Refinitiv said gas output in the U.S. Lower 48 states held at a preliminary 95.1 bcfd on the first day of July, the same as the average for June. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.3 bcfd this week to 96.6 bcfd next week and 100.2 bcfd in two weeks. The forecasts for this week and next week were higher than Refinitiv's outlook on Thursday. Technically market is under short covering as market has witnessed drop in open interest by -14.02% to settled at 5542 while prices up 1.3 rupees, now Natural gas is getting support at 437.8 and below same could see a test of 426.7 levels, and resistance is now likely to be seen at 465.8, a move above could see prices testing 482.7.

Trading Ideas:
* Natural gas trading range for the day is 426.7-482.7.
* Natural gas jumped due to a technical bounce and forecasts for hotter weather and higher demand over the next two weeks than previously expected.
* Gas output in the U.S. Lower 48 states held at a preliminary 95.1 bcfd on the first day of July, the same as the average for June.
* The U.S. EIA said utilities added 82 bcf of gas to storage during the week ended June 24.

Copper

Copper yesterday settled down by -2.18% at 679.05 as fears of a demand-sapping recession continued to hang over the market. Still, news that China eased Covid-19 restrictions in Shanghai and relaxed testing mandates lifted prospects for higher demand. Also, industrial data showed improved factory activity in top consumer China. The Caixin China manufacturing PMI came in at 51.7 in June 2022, returning to growth after three months of contraction. On the production side, workers at the world's largest copper producer Codelco in Chile, reached an agreement with the company to end a national strike over the decision to close the troubled Ventanas smelter. Copper has lost more than 12% in June, marking the third consecutive monthly decline. The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in April was 2.155 million tonnes while consumption was 2.152 million tonnes, the ICSG said. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 16.6 percent from last Friday, the exchange said. Technically market is under fresh selling as market has witnessed gain in open interest by 8.92% to settled at 5982 while prices down -15.1 rupees, now Copper is getting support at 670.4 and below same could see a test of 661.6 levels, and resistance is now likely to be seen at 689.7, a move above could see prices testing 700.2.

Trading Ideas:
* Copper trading range for the day is 661.6-700.2.
* Copper extended losses as fears of a demand-sapping recession continued to hang over the market.
* Still, news that China eased Covid-19 restrictions in Shanghai and relaxed testing mandates lifted prospects for higher demand.
* Industrial data showed improved factory activity in top consumer China.

Zinc

Zinc yesterday settled down by -3.69% at 276.8 as sharp interest rate hikes and weak economic data fan fears of a recession. Global manufacturing struggled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while China's strict COVID-19 lockdowns and Russia's invasion of Ukraine added to supply chain disruptions, surveys showed. From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic. They were the latest signs pointing to the risk of all-out recession in the global economy, coming after the world's top chipmakers said they were facing waning demand and as central bankers warned of painful interest rate hikes ahead. The global zinc market moved to a surplus of 10,900 tonnes in April from a revised deficit of 31,700 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,300 tonnes in March. During the first four months of 2022, ILZSG data showed a deficit of 13,000 tonnes versus a surplus of 83,000 tonnes in the same period of 2021. Zinc stocks in London Metal Exchange (LME) approved warehouses are at their lowest in more than two years due to shortages in Europe where record-high power prices have led to production cuts of the metal used to galvanise steel. Technically market is under long liquidation as market has witnessed drop in open interest by -11.7% to settled at 1970 while prices down -10.6 rupees, now Zinc is getting support at 270.9 and below same could see a test of 265 levels, and resistance is now likely to be seen at 285.8, a move above could see prices testing 294.8.

Trading Ideas:
* Zinc trading range for the day is 265-294.8.
* Zinc prices dropped as sharp interest rate hikes and weak economic data fan fears of a recession.
* Factory data dampen global hopes for 'soft landing'
* Global zinc market flips to surplus of 10,900 T in April – ILZSG

Aluminium

Aluminium yesterday settled up by 1.2% at 211.3 as the refineries has slashed its operating capacity due to the tight supply of bauxite, equivalent to a daily loss of 2,200 mt of output. However fast-rising interest rates and weak economic data stoked fears of a global recession, which would dent demand for metals. Central banks are raising interest rates sharply to rein in soaring inflation, restraining economic growth. Some Japanese aluminium buyers have agreed at least with two global producers to pay a premium of $148 a tonne over the benchmark price for July-September shipments, down 14% from the current quarter, two sources directly involved in the pricing talks said on Wednesday. The figure is lower than the $172 per tonne paid in the April-June quarter and marks a third consecutive quarterly drop. It is also below initial offers of $172-$177 made by producers. Aluminium ingot social inventory totalled 734,000 mt as of June 30, down 17,000 mt from last Thursday and down 12,000 mt from this Monday. Aluminium social inventory has been on the downward trajectory, but it is falling more slowly. In details, inventories kept dropping in Wuxi and Foshan, though the overall de-stocking process slowed. Aluminium billet inventory fell 5,200 mt from last Thursday to 106,400 mt as of June 30, and added 2,700 mt from this Monday. Technically market is under short covering as market has witnessed drop in open interest by -6.73% to settled at 2565 while prices up 2.5 rupees, now Aluminium is getting support at 207.1 and below same could see a test of 202.8 levels, and resistance is now likely to be seen at 213.6, a move above could see prices testing 215.8.

Trading Ideas:
* Aluminium trading range for the day is 202.8-215.8.
* Aluminium gained as the refineries has slashed its operating capacity due to the tight supply of bauxite
* Central banks are raising interest rates sharply to rein in soaring inflation, restraining economic growth.
* Some Japanese aluminium buyers have agreed at least with two global producers to pay a premium of $148 a tonne.

Mentha oil

Mentha oil yesterday settled up by 0.96% at 1023.1 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 gained by 3.7 Rupees to end at 1128.4 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 2.64% to settled at 1245 while prices up 9.7 rupees, now Mentha oil is getting support at 1015.3 and below same could see a test of 1007.4 levels, and resistance is now likely to be seen at 1029.3, a move above could see prices testing 1035.4.

Trading Ideas:
* Mentha oil trading range for the day is 1007.4-1035.4.
* In Sambhal spot market, Mentha oil gained  by 3.7 Rupees to end at 1128.4 Rupees per 360 kgs.
* Mentha oil gained 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.

Turmeric

Turmeric yesterday settled up by 0.92% at 7888 as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. However upside seen limited amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8068.8 Rupees gained 102.65 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.41% to settled at 13775 while prices up 72 rupees, now Turmeric is getting support at 7752 and below same could see a test of 7616 levels, and resistance is now likely to be seen at 8002, a move above could see prices testing 8116.

Trading Ideas:
* Turmeric trading range for the day is 7616-8116.
* Turmeric gained as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* However, upside seen limited amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21.
* In Nizamabad, a major spot market in AP, the price ended at 8068.8 Rupees gained 102.65 Rupees.

Jeera

Jeera yesterday settled up by 1.06% at 21535 as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving. Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 31,802.25 in April 2021 showing a decline of 66%. In the month of March 2022 around 14,595.43 tonnes cumin seed exported as against 35,159.96 in March 2021 showing a decline of 141%. Cumin production in Rajasthan and Gujarat remained nearly 90 lakh bags (55 kg per bag). This year expected cumin production of hardly around 55 lakh bags in the country. In Unjha, a key spot market in Gujarat, jeera edged down by -64 Rupees to end at 21472.9 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -2.83% to settled at 9795 while prices up 225 rupees, now Jeera is getting support at 21290 and below same could see a test of 21040 levels, and resistance is now likely to be seen at 21695, a move above could see prices testing 21850.

Trading Ideas:
* Jeera trading range for the day is 21040-21850.
* Jeera prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low.
* Currently, steady demand seen from Bangladesh and due to Bakri-Eid in July further increase in demand is expected.
* On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 to 1,000 bags are arriving.
* In Unjha, a key spot market in Gujarat, jeera edged down by -64 Rupees to end at 21472.9 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -3% at 41450 as Cotton sowing gained by nearly 3.8% to 64.08 lakh hectares in 2022 against an area sown of 61.73 lakh hectares in 2021. Pressure also seen on profit booking as growing recessionary fears raised prospects of lower demand. The United States Department of Agriculture's report showed that 37% of the cotton crop was in a good-to-excellent condition in the week ending June 26. That compares with 52% for the same period a year ago. Meanwhile, heavy rain will be possible along portions of the Texas coast later this week, the U.S. National Hurricane Center said. Speculators cut net long position in cotton futures by 1,485 contracts to 42,786 in the week to June 21, data from the Commodity Futures Trading Commission showed. Cotton sowing fall nearly 14.76% with 31.83 lakh hectares of area sown against area of 37.37 lakh hectares in 2021. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. Kharif cotton sowing for the season in Gujarat is likely to increase by at least 15% compared to the previous season amid a rush to sow the crop well ahead of its schedule. Farmers had got good prices for cotton in domestic and international markets last season. In spot market, Cotton dropped by -530 Rupees to end at 44940 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.1% to settled at 1534 while prices down -1280 rupees, now Cotton is getting support at 40790 and below same could see a test of 40130 levels, and resistance is now likely to be seen at 42440, a move above could see prices testing 43430.

Trading Ideas:
* Cotton trading range for the day is 40130-43430.
* Cotton dropped as Cotton sowing gained by nearly 3.8% to 64.08 lakh hectares in 2022 against an area sown of 61.73 lakh hectares in 2021.
* Pressure also seen on profit booking as growing recessionary fears raised prospects of lower demand.
* Speculators cut net long position in cotton futures by 1,485 contracts to 42,786 in the week to June 21, data from the CFTC showed
* In spot market, Cotton dropped  by -530 Rupees to end at 44940 Rupees.

-www.kediaadvisory.com

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