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Gold

Gold yesterday settled down by -0.03% at 55693 as expectations of slower U.S. rate hikes lowered Treasury yields while lifting bullion to a fresh eight-month peak. Fed Governor Michelle Bowman said that the U.S. central bank will have to raise rates further to combat high inflation and that will likely lead to softer job market conditions. The overall economic picture has improved recently on the back of signs that inflation is cooling, allowing monetary policymakers to slow down the pace of tightening while easing some worries about a deep economic downturn. Indian gold refiners have nearly stopped imports of gold dore, a semi-pure alloy, as grey market operators offer hefty discounts to market rates and cut into their slender margins, making business a losing proposition. Most refiners in the world's second-biggest consumer of the precious metal have suspended operations and are struggling to honour long-term supply contracts with miners. Jewellers and bullion dealers were not buying from refiners as they could not offer the same kind of discount available from competing suppliers. Grey market operators, or businesses that smuggle gold from overseas and sell it for cash to avoid the duties, got a boost in July 2022 when India raised its import tax on gold. Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.25% to settle at 12033 while prices are down -19 rupees, now Gold is getting support at 55500 and below same could see a test of 55307 levels, and resistance is now likely to be seen at 55908, a move above could see prices testing 56123.
Trading Ideas:
* Gold trading range for the day is 55307-56123.
* Gold prices steadied as expectations of slower U.S. rate hikes lowered Treasury yields while lifting bullion to a fresh eight-month peak.
* The U.S. central bank will have to raise rates further to combat high inflation and that will likely lead to softer job market conditions
* Cooling inflation and a slowing economy may convince the U.S. Federal Reserve to ease its tightening of monetary policy.


Silver

Silver yesterday settled down by -0.57% at 67973 as investors look ahead to the US CPI report due later this week to see whether it will confirm that inflation is trending lower. Slower-than-expected wage growth in the United States threw cold water on a batch of data pointing to a tight labor market, raising convictions that the Fed might not be as hawkish as previously signaled. “Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chairman said in prepared remarks for the panel discussion in Stockholm. Powell's comments focused on central banks' independence and were short of details on the coming interest-rate decisions. Fed Officials also have signaled their intention to lift the rate above 5% in 2023 and keep it there throughout the year. Fed Governor Michelle Bowman said she expects more interest rate increases ahead to achieve a sufficiently restrictive federal funds rate and keep it at that level for some time. COMEX inventories levels saw an aggressive decline in the period, and London Bullion Market Association stockpiles fell considerably amid outflows to India. Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.02% to settle at 18562 while prices are down -390 rupees, now Silver is getting support at 67328 and below same could see a test of 66683 levels, and resistance is now likely to be seen at 68921, a move above could see prices testing 69869.
Trading Ideas:
* Silver trading range for the day is 66683-69869.
* Silver dropped as investors look ahead to the US CPI report due later this week to see whether it will confirm that inflation is trending lower.
* Fed’s Powell comments focused on central banks' independence and were short of details on the coming interest-rate decisions.
* Fed Officials also have signaled their intention to lift the rate above 5% in 2023 and keep it there throughout the year.


Crude oil

Crude oil yesterday settled up by 2.48% at 6330 prompted by hopes of a rise in China demand. The country is taking significant steps to boost its economy while ending its strict coronavirus-induced restrictions. The Chinese government also issued oil import quotas early this week which were higher than last year, in a sign crude consumption will improve. The U.S. Energy Information Administration raised its forecast for this year's crude output and petroleum consumption growth, projecting even higher growth in 2024. The EIA projected that crude oil production would rise by 550,000 bpd to 12.41 million barrels in 2023, compared with its previous estimate of a 470,000 bpd rise. Crude oil production is expected to rise by 400,000 barrels per day to 12.81 million bpd in 2024, the EIA said. U.S. petroleum and other liquid fuel consumption is expected to rise by 170,000 bpd to 20.44 million bpd in 2023 and rise by another 190,000 bpd to 20.63 million bpd in 2024. Data from the American Petroleum Institute showed that US crude inventories jumped by 14.9 million barrels last week, defying expectations for a 2.4 million barrel drop. Technically market is under short covering as the market has witnessed a drop in open interest by -31.11% to settle at 6608 while prices are up 153 rupees, now Crude oil is getting support at 6166 and below same could see a test of 6001 levels, and resistance is now likely to be seen at 6427, a move above could see prices testing 6523.
Trading Ideas:
* Crude oil trading range for the day is 6001-6523.

* Crude oil gained prompted by hopes of a rise in China demand.
* U.S. crude output and petroleum demand to rise in 2023 – EIA
* Crude oil production is expected to rise by 400,000 barrels per day to 12.81 million bpd in 2024, the EIA said.


Natural gas

Nat.Gas yesterday settled down by -1.59% at 296.3 amid forecasts for unseasonally warm weather over the next two weeks and lower than previously expected heating demand next week. Gas speculators last week boosted their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges for a third week in a row to their highest since October 2022, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Traders said the market's biggest uncertainty remains when Freeport LNG will restart its liquefied natural gas (LNG) export plant in Texas. After several delays from October to November and then to December, Freeport now expects the facility to return in the second half of January, pending regulatory approvals. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.3 bcfd so far in January, up from 96.7 bcfd in December. That compares with a monthly record of 99.9 bcfd in November 2022. With the weather expected to remain warmer-than-normal through late January, Refinitiv projected average U.S. gas demand, including exports, would ease from 121.2 bcfd this week to 120.7 bcfd next week. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.12% to settle at 27069 while prices are down -4.8 rupees, now Natural gas is getting support at 283.4 and below same could see a test of 270.5 levels, and resistance is now likely to be seen at 311.1, a move above could see prices testing 325.9.
Trading Ideas:
* Natural gas trading range for the day is 270.5-325.9.
* Natural gas dropped amid forecasts for unseasonally warm weather over the next two weeks and lower than previously expected heating demand next week.
* The market's biggest uncertainty remains when Freeport LNG will restart its liquefied natural gas (LNG) export plant in Texas.
* Gas speculators last week boosted their net short futures and options positions for a third week in a row to their highest since October 2022.



Copper

Copper yesterday settled up by 1.64% at 769.55 on hopes that Chinese demand will rebound after the country removed its COVID-19 restrictions. China's retreat from its zero-COVID policy has caused a huge spike in infections, but investors expect it to lift metals demand through the year. Data showed new bank lending in China unexpectedly rose last month, and the central bank ramped up a liquidity injection. On the supply side, a row in Panama deepened as the government doubled down on an order that First Quantum Minerals Ltd halt operations at a copper mine. Top producer Chile forecasted its output to contract by nearly 6% in 2023. Major industry players warned that worldwide production will be unable to keep up with soaring demand as modern economies transition to copper-dependent renewable energy sources. Consequently, mining giant Glencore estimated a cumulative supply shortfall of 50 million tonnes until 2030, and Trafigura warned that current global inventories can supply world consumption for less than 5 days. In the meantime, Chinese authorities reopened mainland borders with Hong Kong and relaxed quarantine for incoming travelers, further moving away from its strict zero Covid policy and raising expectations of higher economic activity and increased in demand for industrial inputs. Technically market is under fresh buying as the market has witnessed a gain in open interest by 10.72% to settle at 5650 while prices are up 12.45 rupees, now Copper is getting support at 761 and below same could see a test of 752.3 levels, and resistance is now likely to be seen at 774.7, a move above could see prices testing 779.7.
Trading Ideas:
* Copper trading range for the day is 752.3-779.7.
* Copper rose on hopes that Chinese demand will rebound after the country removed its COVID-19 restrictions.
* Copper rises above $9,000 for the first time since June
* China's retreat from its zero-COVID policy has caused a huge spike in infections, but investors expect it to lift metals demand through the year.


Zinc

Zinc yesterday settled up by 0.54% at 281 as demand prospects brightened after top consumer China reopened its borders. A raft of policy measures from Beijing to revive its economy and its ailing property sector have boosted investor sentiment, although spot demand for the metal has been limited ahead of the Lunar New Year starting from Jan. 21. On the supply side, inventories remain at record lows as the power crisis in Europe forced several smelters to operate at reduced capacity, while others were placed on care and maintenance, including the Budel smelter in the Netherlands, the Nordenham smelter in Germany, and the Auby smelter in France. In China, zinc inventories in Shanghai Futures Exchange warehouses rose by 2,280 tonnes to 20,453 tonnes on December 30th. As China's new year holiday approaches, market activity slows down, and the domestic stock accumulates. Global zinc stocks closed 2022 at 42,825 tonnes, an 84.7% reduction from the beginning of the year. Investors now await U.S. inflation data later this week for more clues on whether the Federal Reserve will, as some traders expect, take a less aggressive stance on monetary policy. Technically market is under fresh buying as the market has witnessed a gain in open interest by 11.8% to settle at 1971 while prices are up 1.5 rupees, now Zinc is getting support at 278.9 and below same could see a test of 276.6 levels, and resistance is now likely to be seen at 282.6, a move above could see prices testing 284.
Trading Ideas:
* Zinc trading range for the day is 276.6-284.
* Zinc prices rose as demand prospects brightened after China reopened its borders.
* Global zinc stocks closed 2022 at 42,825 tonnes, an 84.7% reduction from the beginning of the year.
* Inventories remain at record lows as the power crisis in Europe forced several smelters to operate at reduced capacity



Aluminium

Aluminium yesterday settled up by 1.28% at 213.8 helped by optimism over top consumer China's reopening, while a shaky U.S. dollar also lent support. Aluminium producer Alcoa Corp said it expects production at its partially owned Kwinana alumina refinery in Western Australia to be cut by about 30% due to a shortage of gas supply. A unit of the refinery, majority owned by Alcoa in a joint venture with Alumina Ltd, has been taken offline, hitting process flows, the aluminium producer said in statement. The People’s Bank of China (PBoC) stepped up liquidity support on Wednesday, injecting CNY 87 billion through reverse repurchase agreements in open market operations, including CNY 65 billion through a 7-day tenor and another CNY 22 billion through a 14-day tenor. With CNY 14 billion worth of such reverse repos maturing today, the central bank pumped CNY a net of CNY 71 billion into the banking system, marking the first daily net fund offering this year. China produced 3.44 million mt of aluminium in December 2022 (31 calendar days), up 8.3% on the year. The daily output dropped 261 mt/day on the month to 110,900 mt. The output totalled 40.08 million mt from January to December 2022, an increase of 4.1% on the year. Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.06% to settle at 5126 while prices are up 2.7 rupees, now Aluminium is getting support at 211.5 and below same could see a test of 209.2 levels, and resistance is now likely to be seen at 215.3, a move above could see prices testing 216.8.
Trading Ideas:
* Aluminium trading range for the day is 209.2-216.8.
* Aluminum rose helped by optimism over top consumer China's reopening, while a shaky U.S. dollar also lent support.
* PBoC ramps up liquidity support ahead of long holiday
* Aluminium producer Alcoa Corp said it expects production to be cut by about 30% due to a shortage of gas supply.


Mentha oil

Mentha oil yesterday settled down by -0.71% at 1059.8 on profit booking after prices gained on improving export demand especially from China. 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 3.4 Rupees to end at 1206.4 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.39% to settle at 1022 while prices are down -7.6 rupees, now Mentha oil is getting support at 1052.5 and below same could see a test of 1045.3 levels, and resistance is now likely to be seen at 1070.4, a move above could see prices testing 1081.1.
Trading Ideas:
* Mentha oil trading range for the day is 1045.3-1081.1.
* In Sambhal spot market, Mentha oil gained  by 3.4 Rupees to end at 1206.4 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained on improving export demand especially from China.
* 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 -0.18% at 7820 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 7399.75 Rupees gained 31.75 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.92% to settle at 12555 while prices are down -14 rupees, now Turmeric is getting support at 7792 and below same could see a test of 7764 levels, and resistance is now likely to be seen at 7866, a move above could see prices testing 7912.
Trading Ideas:
* Turmeric trading range for the day is 7764-7912.
* Turmeric prices 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 7399.75 Rupees gained 31.75 Rupees.


Jeera
Jeera yesterday settled up by 1.41% at 36300 amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties. Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected. 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 down by -182.05 Rupees to end at 34959.4 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 4.37% to settle at 4230 while prices are up 505 rupees, now Jeera is getting support at 35665 and below same could see a test of 35025 levels, and resistance is now likely to be seen at 36845, a move above could see prices testing 37385.
Trading Ideas:
* Jeera trading range for the day is 35025-37385.
* Jeera prices rose above amid reduced sowing in Gujarat, coupled with a tight supply, and climatic uncertainties.
* Projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected.
* Sowing in Gujarat, dropped by nearly -8% with 274,995.00 hectares against sown area of 2021 which was 300,401.00 hectares.
* In Unjha, a key spot market in Gujarat, jeera edged down by -182.05 Rupees to end at 34959.4 Rupees per 100 kg.

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