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Gold

Gold yesterday settled down by -0.61% at 51163 as expectations of more interest rate hikes by the U.S. Federal Reserve fuelled a rally in dollar and took shine off bullion. St. Louis Fed President James Bullard, San Francisco Fed colleague Mary Daly and Kansas City Fed President Esther George all said continuing to hike rates in a bid to fight inflation would be reasonable. The Fed will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries. Traders are now pricing in around a 46.5% chance of a 75-basis-point rate hike in September and a 53.5% chance of a 50-bp increase. Central bankers would gather this week at their annual retreat in Jackson Hole, Wyoming, and comments from Fed Chair Jerome Powell on Friday will be keenly watched. India’s gold demand for the second quarter (April-June) increased by 43 per cent compared to the corresponding quarter last year, revealed the latest report by World Gold Council. Value-wise India’s second quarter (Q2) 2022 gold demand value was Rs 79,270 crore, an increase of 54 per cent in comparison with Q2 2021 (Rs 51,540 crore). India's gold imports, which have a bearing on the country's Current Account Deficit (CAD), rose 6.4 per cent to USD 12.9 billion during April-July this fiscal due to healthy demand. Technically market is under long liquidation as market has witnessed drop in open interest by -2.24% to settled at 14112 while prices down -316 rupees, now Gold is getting support at 50953 and below same could see a test of 50743 levels, and resistance is now likely to be seen at 51391, a move above could see prices testing 51619.

Trading Ideas:
*Gold trading range for the day is 50743-51619.
* Gold dropped as expectations of more interest rate hikes by the Fed fuelled a rally in dollar and took shine off bullion.
* Dollar scales more than 1-month peak
* Yields on the U.S. 10-year treasuries recovered, increasing pressure on gold


Silver

Silver yesterday settled down by -0.91% at 54992 as the dollar extended its climb amid angst over global growth. The dollar resumed its rally to hover near five-week high after another Federal Reserve official flagged the likelihood of continued aggressive monetary tightening. Richmond Fed President Thomas Barkin said central bankers were inclined towards faster, front-loaded interest rate increases, even if that meant risking a U.S. economic recession. Elsewhere, Bundesbank President Joachim Nagel told German newspaper Rheinischen Post that inflation in Germany could hit a 70-year high of 10 percent this fall as Russian natural-gas supplies slow. A recession appears likely next winter but the European Central Bank should continue increasing rates to tame inflation, he added as Russia announced a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of this month, exacerbating the region's energy crisis. Unease over China's economy tipped the yuan to its lowest level in nearly two years after the country's central bank cut its key lending rates again in a bid to boost the economy hurt by extended COVID-19 lockdowns and property debt problems. The one-year loan prime rate was reduced by 5 basis points to 3.65 percent and the five-year LPR was cut by 15 basis points to 4.30 percent. Technically market is under long liquidation as market has witnessed drop in open interest by -1.99% to settled at 17249 while prices down -504 rupees, now Silver is getting support at 54498 and below same could see a test of 54005 levels, and resistance is now likely to be seen at 55456, a move above could see prices testing 55921.
 

Trading Ideas:
* Silver trading range for the day is 54005-55921.
* Silver prices fell as the dollar extended its climb amid angst over global growth.
* The dollar resumed its rally to hover near five-week high after Fed official flagged the likelihood of continued aggressive monetary tightening.
* Fed’s Barkin said central bankers were inclined towards faster, front-loaded interest rate increases, even if that meant risking a U.S. economic recession.


Crude oil

Crude oil yesterday settled down by -0.95% at 7162 as traders considered the prospect for more Iranian supply following US President Joe Biden’s discussions with European allies about reviving the 2015 nuclear deal. Biden spoke with leaders from France, Germany and the UK and discussed “ongoing negotiations” toward a nuclear agreement, including “the need to strengthen support for partners in the Middle East region,” Bloomberg reported. Oil and other commodities have also been declining since June over escalating fears of a global economic slowdown, as major central banks stem demand with aggressive rate hikes to tame surging inflation. Meanwhile, top importer China remains mired in economic woes, with the Sichuan province extending industrial power cuts and activating its highest emergency response to deal with electricity shortages, threatening manufacturing activity in the region. OPEC+ produced 2.892 million barrels per day (bpd) below their targets in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output. Compliance with the production targets stood at 546% in July the sources said, compared with 320% in June, when the supply gap stood at 2.84 million bpd. The group agreed this month to increase production targets by another 100,000 bpd in September, under pressure from major consumers including the United States which are keen to cool prices. Technically market is under fresh selling as market has witnessed gain in open interest by 19.69% to settled at 3842 while prices down -69 rupees, now Crude oil is getting support at 6958 and below same could see a test of 6755 levels, and resistance is now likely to be seen at 7327, a move above could see prices testing 7493.
 

Trading Ideas:
* Crude oil trading range for the day is 6755-7493.
* Crude oil dropped as traders considered the prospect for more Iranian supply following US President Joe Biden’s discussions with European allies.
* Prices also been declining over escalating fears of a global economic slowdown, as major central banks stem demand with aggressive rate hikes.
* OPEC+ missed output targets by 2.9 mln bpd in July


Nat.Gas

Nat.Gas yesterday settled up by 4.21% at 774 as prices topped all time high, buoyed by prospects of increased demand for US LNG exports amid a deepening energy crisis in Europe. Russia's Gazprom said it would halt flows through the Nord Stream 1 pipeline to Europe for three days of maintenance at the end of August. The main channel between Russia and Europe was already running at 20% capacity, putting pressure on the region as it seeks to refuel ahead of winter to avoid a natural gas shortage. Adding to the bullish outlook, the temperatures in the US this summer remain high, with several heatwaves boosting demand for air conditioners. On top of that, Freeport LNG has recently agreed with regulators to partially restart operations in October at its shuttered export plant in Texas and said it began to pull in tiny amounts of natural gas from pipelines. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.3 bcfd so far in August from a record 96.7 bcfd in July. With warmer weather expected, Refinitiv projected average U.S. gas demand, including exports, would rise from 95.5 bcfd this week to 96.8 bcfd next week and 97.2 bcfd in two weeks. These were similar to Refinitiv's forecasts on Thursday. Technically market is under short covering as market has witnessed drop in open interest by -13.99% to settled at 5227 while prices up 31.3 rupees, now Natural gas is getting support at 739.6 and below same could see a test of 705.1 levels, and resistance is now likely to be seen at 801.3, a move above could see prices testing 828.5.
 

Trading Ideas:
* Natural gas trading range for the day is 705.1-828.5.
* Natural gas topped all time high, buoyed by prospects of increased demand for US LNG exports amid a deepening energy crisis in Europe.
* Russia's Gazprom said it would halt flows through the Nord Stream 1 pipeline to Europe for three days of maintenance at the end of August
* The temperatures in the US this summer remain high, with several heatwaves boosting demand for air conditioners.



Copper

Copper yesterday settled down by -0.46% at 670.7 as the People's Bank of China is loosening monetary policy aiming to shore up the economy. China cut some key lending rates in an effort to support a slowing economy and a stressed housing sector, raising hopes of a demand recovery in the world's top metal producer and consumer. China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin, adding to last week's easing measures, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID cases. The one-year loan prime rate (LPR) was lowered by 5 basis points to 3.65% at the central bank's monthly fixing, while the five-year LPR was slashed by a bigger margin of 15 basis points to 4.30%. In July, the US industrial output and manufacturing output rose month-on-month, which were better than expected. The US real estate market continued to weaken, with floor space of new housing starts falling 9.6% and the number of building permits declining 1.3% to 1.67 million in July. The New York Fed Manufacturing Index in August dropped sharply to 31.3, the lowest since May 2020, which made the market hesitant about the Fed's interest rate hikes in September. Technically market is under long liquidation as market has witnessed drop in open interest by -17.67% to settled at 3098 while prices down -3.1 rupees, now Copper is getting support at 665 and below same could see a test of 659.3 levels, and resistance is now likely to be seen at 676.4, a move above could see prices testing 682.1.
 

Trading Ideas:
* Copper trading range for the day is 659.3-682.1.
* Copper prices dropped as the People's Bank of China is loosening monetary policy aiming to shore up the economy.
* China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin, adding to last week's easing measures
* Kazakhstan's January-July refined copper output jumped by 22.3% year on year


Zinc

Zinc yesterday settled up by 0.13% at 315.45 due to the continuous hot weather in China, the influence of power rationing on smelters is extending. However investors weighed on the clouded outlook for China’s economy against supply concerns. Record-setting heat waves in regions of the world’s second largest economy caused overheating in power grids and led local governments to ration energy among factories in multiple industries, hampering demand for inputs. Zinc ingot social inventory across seven major markets in China totalled 114,700 mt as of Monday August 22, down 10,600 mt from last Monday. The social inventory kept falling amid increasingly less arrivals of spots in Tianjin and Shanghai. In addition, zinc smelters in south China have been greatly affected by the power rationing. The delayed zinc arrivals underpinned zinc prices, while the consumption side has not yet improved. According to the report released by the National Bureau of Statistics, China's zinc output in July stood at 522,000 mt, down 7.1% month-on-month. The refined zinc production in July declined more than expected. Maintenance and production resumption of refined zinc smelters coexisted in August. In particular, due to the current tight power supply in Sichuan province, local manufacturers are required to halt all production. Technically market is under short covering as market has witnessed drop in open interest by -23.33% to settled at 1009 while prices up 0.4 rupees, now Zinc is getting support at 313 and below same could see a test of 310.5 levels, and resistance is now likely to be seen at 317.4, a move above could see prices testing 319.3.
 

Trading Ideas:
* Zinc trading range for the day is 310.5-319.3.
* Zinc gains due to the continuous hot weather in China, the influence of power rationing on smelters is extending.
* Kazakhstan's January-July refined zinc production down by 0.6% year on year
* Zinc ingot social inventory across seven major markets in China totalled 114,700 mt, down 10,600 mt from last Monday



Aluminium

Aluminium yesterday settled down by -0.07% at 209.8 as Global primary aluminium output in July rose 2.06% year on year to 5.848 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.468 million tonnes in July, the IAI said. The People's Bank of China lowered its key rates for corporate and household loans at August fixing, the second reduction this year, as the board stepped up efforts to revive borrowing demand amid repeated COVID-19 outbreaks and lingering property downturn. The one-year loan prime rate (LPR) was cut by 5 bps to a record low of 3.65%, while the 5-year LPR which influences the pricing of home mortgages slashed for the second time this year by 15 bps to 4.30%, as policy makers sought to shore up the property sector. The move came after the central bank lowering the one-year medium-term lending facility (MLF) rate and another short-term liquidity toll last week, as authorities looked to boost credit demand in a stuttering economy. Aluminium ingot social inventory added 3,000 mt from last Thursday August 18 to 683,000 mt as of today. Aluminium billet inventory also added 2,500 mt to 118,800 mt. The news of accumulating social inventory pulled down the futures contract, which hovered around the moving average. Technically market is under long liquidation as market has witnessed drop in open interest by -18.88% to settled at 2462 while prices down -0.15 rupees, now Aluminium is getting support at 209 and below same could see a test of 208.1 levels, and resistance is now likely to be seen at 210.6, a move above could see prices testing 211.3.
 

Trading Ideas:
* Aluminium trading range for the day is 208.1-211.3.
* Aluminium prices dropped as Global aluminium output rises 2.1% year on year in July
* PBOC lowered its key rates for corporate and household loans at August fixing, the second reduction this year
* Aluminium ingot social inventory added 3,000 mt from last Thursday August 18 to 683,000 mt as of today.


Mentha oil

Mentha oil yesterday settled down by -0.39% at 966 as Synthetic Mentha supply remains uninterrupted. However, downside seen limited 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 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. Mentha exports during Apr-June 2022 has dropped by 5.75 percent at 493.45 tonnes as compared to 523.54 tonnes exported during Apr-June 2021. In the month of June 2022 around 113.33 tonnes Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 46%.In the month of June 2022 around 113.33 tonnes of Mentha was exported as against 169.93 tonnes in June 2021 showing a decline of over 33%.In the month of May 2022 around 209.90 tonnes of Mentha was exported as against 179.76 tonnes in May 2021 showing a rise of 16.77%. In Sambhal spot market, Mentha oil dropped by -17.4 Rupees to end at 1097.3 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -26.4% to settled at 655 while prices down -3.8 rupees, now Mentha oil is getting support at 957.8 and below same could see a test of 949.5 levels, and resistance is now likely to be seen at 978.7, a move above could see prices testing 991.3.
 

Trading Ideas:
* Mentha oil trading range for the day is 949.5-991.3.
* In Sambhal spot market, Mentha oil dropped  by -17.4 Rupees to end at 1097.3 Rupees per 360 kgs.
* Mentha oil prices dropped as Synthetic Mentha supply remains uninterrupted.
* Mentha exports during Apr-June 2022 has dropped by 5.75 percent at 493.45 tonnes as compared to 523.54 tonnes exported during Apr-June 2021.
* In the month of June 2022 around 113.33 tonnes Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 46%.


Turmeric

Turmeric yesterday settled down by -1.5% at 7218 on report of better sowing. As per Andhra Pradesh agricultural department, sowing activity completed around 7,958 hectares as compared to last year same period 7,764 hectares. Sufficient stocks and good sowing reports kept turmeric prices under pressure. Turmeric exports during Apr-June 2022 has rose by 23.44 percent at 49,435.38 tonnes as compared to 40,049.06 tonnes exported during Apr-June 2021. In the month of June 2022 around 18,532.00 tonnes turmeric was exported as against 17,137.15 tonnes in May 2022 showing a rise of 8.13%. In the month of June 2022 around 18,532.00 tonnes of turmeric was exported as against 13,206.00 tonnes in June 2021 showing an increase of 40.33%. In the month of May 2022 around 17,138.35 tonnes of turmeric was exported as against 13,576.68 tonnes in May 2021 showing an increase of 26.23%. 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 7458.95 Rupees dropped -10.3 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -2.63% to settled at 14440 while prices down -110 rupees, now Turmeric is getting support at 7156 and below same could see a test of 7092 levels, and resistance is now likely to be seen at 7310, a move above could see prices testing 7400.
 

Trading Ideas:
* Turmeric trading range for the day is 7092-7400.
* Turmeric dropped amid profit booking on reports of better sowing.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* In the month of June 2022 around 18,532.00 tonnes turmeric was exported as against 17,137.15 tonnes in May 2022 showing a rise of 8.13%.
* In Nizamabad, a major spot market in AP, the price ended at 7458.95 Rupees dropped -10.3 Rupees.


Jeera

Jeera yesterday settled down by -0.82% at 24705 on profit booking after prices rose 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. Jeera exports during Apr-June 2022 has dropped by 42.98 percent at 47,190.98 tonnes as compared to 82,762.08 tonnes exported during Apr-June 2021. In the month of June 2022 around 21,587.63 tonnes jeera was exported as against 14,894.62 tonnes in May 2022 showing a rise of 44.94%. In the month of June 2022 around 21,587.63 tonnes of jeera was exported as against 30,989.86 tonnes in June 2021 showing a decrease of 30.34%. In the month of May 2022 around 14,894.62 tonnes of jeera was exported as against 20,693.76 tonnes in May 2021 showing a decrease of 28.03%. 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 -339.55 Rupees to end at 24305.95 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -1.52% to settled at 9147 while prices down -205 rupees, now Jeera is getting support at 24570 and below same could see a test of 24430 levels, and resistance is now likely to be seen at 24890, a move above could see prices testing 25070.
 

Trading Ideas:
* Jeera trading range for the day is 24430-25070.
* Jeera dropped on profit booking after prices rose 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 down by -339.55 Rupees to end at 24305.95 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -1.27% at 49600 as India’s Cotton sowing gained by nearly 5.98% to 123.09 lakh hectares in 2022 against an area sown of 116.15 lakh hectares in 2021. In its monthly supply-demand report, the United States Department of Agriculture (USDA) cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year. Hot and dry weather conditions in key growing areas in the United States have threatened the condition of the natural fiber crop and raised supply concerns. The USDA's lower global output estimates also reflected a reduction of about 100,000 bales "as extreme heat in Uzbekistan reduced yield prospects there." However, the agency said it expects the lower U.S. production projections to result in a 2 million bale reduction in exports compared with July, and a 200,000 bale dip in mill use. India’s Cotton sowing gained by nearly 5.34% to 117.65 lakh hectares in 2022 against an area sown of 111.69 lakh hectares in 2021. In Gujarat Cotton sowing grows by nearly 13% with 2,528,354.00 hectares against sown area of 2021 which was 2,240,765.00 hectares as of now. In spot market, Cotton gained by 430 Rupees to end at 47740 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -18.27% to settled at 756 while prices down -640 rupees, now Cotton is getting support at 48930 and below same could see a test of 48250 levels, and resistance is now likely to be seen at 50690, a move above could see prices testing 51770.
 

Trading Ideas:
* Cotton trading range for the day is 48250-51770.
* Cotton dropped as India’s Cotton sowing gained by nearly 5.98% to 123.09 lakh hectares in 2022.
* However, cotton crops in India, remain under threat due to adverse weather conditions and pest attacks in major growing regions.
* USDA cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year.
* In spot market, Cotton gained  by 430 Rupees to end at 47740 Rupees.

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