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Gold

Gold yesterday settled up by 1.63% at 49916 as inflationary and geopolitical risks boosted its safe-haven appeal. Diplomatic efforts to avert a Russian attack on Ukraine stepped up after the US warned at the weekend that a Russian invasion of Ukraine could take place in the middle of the week. Still, Moscow has denied intending to invade Ukraine despite the build-up of some 130,000 soldiers on Ukraine's borders. Physical gold demand in India was subdued as consumers postponed purchases due to higher domestic prices during the wedding season, while Singapore saw an uptick in activity. Wedding season buying has moderated, but it could pick up in the coming weeks as many states have started easing restrictions. Dealers in India were offering a discount of up to $2.5 an ounce over official domestic prices, inclusive of the 10.75% import and 3% sales levies, up from last week’s discount of $1.5. In top consumer China, premiums of about $3 to $6 an ounce were charged over benchmark spot gold rates, with activity still muted after Lunar New Year holiday last week. China's gold consumption boomed during the week-long Spring Festival holiday, up 13 percent year on year, according to data from the China Gold Association. Gold ornaments and bars were among the best-selling products during the holiday, a traditional peak season for gold consumption. Technically market is under short covering as market has witnessed drop in open interest by -0.21% to settled at 11336 while prices up 802 rupees, now Gold is getting support at 49569 and below same could see a test of 49222 levels, and resistance is now likely to be seen at 50137, a move above could see prices testing 50358.
 

Trading Ideas:
Gold trading range for the day is 49222-50358.
Gold rose as inflationary and geopolitical risks boosted its safe-haven appeal.
Moreover, concerns over rising consumer prices added to the bullish sentiment after data showed US inflation hit 7.5% in January, the highest in 40 years.
Gold consumption booms in Spring Festival holiday


Silver

Silver yesterday settled up by 1.98% at 64233 as growing political risks in Ukraine added to broader worries around aggressive monetary policy tightening by the Federal Reserve. Biden warned that the U.S. and its allies were prepared to respond "decisively and impose swift and severe costs" on Russia, if Putin launches an attack into Ukraine. The Silver Institute has forecast global silver demand to rise to a record 1.112 billion ounces in 2022 as traditional and green technologies increase its use. These established and emerging uses in industrial fabrication are expected to rise by 5 per cent this year, while use in jewellery and silverware could rise by 11 and 21 per cent respectively. The news comes as the Perth Mint announced record silver sales for January, selling 2,387,165 ounces of silver in minted product form. The United States Mint kicked off 2022 with American Eagle silver bullion coin sales in January that are 4.7% higher than sales for the same period in 2021. Silver American Eagle sales in January to authorized purchasers worldwide reached 5,001,000 coins, compared with 4,775,000 coins in January 2021 and 3,846,000 coins in January 2020. Sales on Feb. 7, 2022, added another 480,500 American Eagle 1-ounce .999 fine silver dollars. Technically market is under short covering as market has witnessed drop in open interest by -11.86% to settled at 7545 while prices up 1245 rupees, now Silver is getting support at 63377 and below same could see a test of 62520 levels, and resistance is now likely to be seen at 64814, a move above could see prices testing 65394.
 

Trading Ideas:
Silver trading range for the day is 62520-65394.
Silver prices rose following a warning from the U.S. about an imminent invasion of Russia into Ukraine.
U.S. President Biden warned that the U.S. and its allies were prepared to respond "decisively and impose swift and severe costs" on Russia
The Silver Institute has forecast global silver demand to rise to a record 1.112 billion ounces in 2022


Crude oil

Crude oil yesterday settled up by 2.7% at 7108 on fears that a possible invasion of Ukraine by Russia could trigger U.S. and European sanctions that would disrupt exports from the world's top producer in an already tight market. The International Energy Agency's (IEA) chief Fatih Birol urged the OPEC+ group of oil producers to close the gap between its words and its actions, as prices surged to a more than seven-year high. OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, which include Russia, agreed earlier this month to stick with moderate rises in output as it unwinds production curbs introduced at the height of the pandemic when demand collapsed. As several OPEC+ members have struggled to ramp up output following years of under-investment, the group has not achieved its promised monthly output increases of 400,000 barrels per day (bpd). The IEA in its last monthly report said the gap between the target and actual output had widened to 900,000 bpd. Money managers cut their net long U.S. crude futures and options positions in the week to February 8, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 8,624 contracts to 295,388 during the period. Technically market is under short covering as market has witnessed drop in open interest by -24.9% to settled at 10140 while prices up 187 rupees, now Crude oil is getting support at 6985 and below same could see a test of 6863 levels, and resistance is now likely to be seen at 7193, a move above could see prices testing 7279.
 

Trading Ideas:
Crude oil trading range for the day is 6863-7279.
Crude oil prices rose on fears that a possible invasion of Ukraine by Russia could trigger U.S. and European sanctions that would disrupt exports
IEA's Birol urges OPEC+ to close gap between words and deeds
IEA said the gap between OPEC+ output and its target widened to 900,000 bpd in January.


Natural gas

Nat.Gas yesterday settled up by 6.37% at 314.1 in tandem with crude oil, amid fears of military conflict in Ukraine. The US warned Russia might attack its neighbor before the Beijing Olympics end in a week. Still, mid-February forecasts continued to point to warmer weather across the US, decreasing projected demand for heating. Egypt's natural gas exports are expected to rise to 7.5 million tonnes by the end of this fiscal year, Petroleum Minister Tarek El-Molla said. Egypt's gas exploration plan for this fiscal year and next is expected to add 450 million cubic feet to gas production per day and 17,200 barrels per day of gas condensates, the minister added. U.S. natural gas production and demand will both rise in 2022 as the economy continues to grow, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO). EIA projected that dry gas production will rise to 96.09 billion cubic feet per day (bcfd) in 2022 and 97.97 bcfd in 2023 from a record 93.59 bcfd in 2021. The agency also projected that gas consumption would rise to 84.27 bcfd in 2022 from 82.92 bcfd in 2021 before sliding to 83.85 bcfd in 2023. That compares with a record 85.29 bcfd in 2019. Technically market is under short covering as market has witnessed drop in open interest by -31.85% to settled at 4726 while prices up 18.8 rupees, now Natural gas is getting support at 306.6 and below same could see a test of 299 levels, and resistance is now likely to be seen at 319.2, a move above could see prices testing 324.2.
 

Trading Ideas:
Natural gas trading range for the day is 299-324.2.
Natural gas prices gained in tandem with crude oil, amid fears of military conflict in Ukraine.
Still, mid-February forecasts continued to point to warmer weather across the US, decreasing projected demand for heating.
Egypt natural gas exports to reach 7.5 mln tonnes this fiscal year



Copper

Copper yesterday settled up by 0.27% at 770.1 as a jump in oil prices prompted investors' quest for a hedge against stubborn inflation. However, upside seen limited as the risk aversion sentiment was high triggered by Russia and Ukraine conflict over the weekend. Warehouses monitored by the Shanghai Futures Exchange saw large inflows of inventories last week with copper surging by 164%. It was the first weekly stocks data since China closed for its New Year celebrations. A Peruvian community said on social media that it will restart a road blockade against MMG's Las Bambas mine, even as a second community agreed to a 45-day truce in its blockade. Las Bambas, which produces 2% of the world's copper supply, has said it will have to suspend production on Feb. 20 if the road is not cleared by then. The threat leaves Las Bambas still at risk of suspending operations, even as the road was being cleared on Sunday. Leaders in the Ccapacmarca district agreed to lift their blockade for 45 days following a meeting with new Prime Minister Anibal Torres. On the fundamentals, LME copper stocks dropped 1,875 mt to 72,000 mt, underpinning copper prices. Technically market is under short covering as market has witnessed drop in open interest by -4.53% to settled at 3353 while prices up 2.1 rupees, now Copper is getting support at 764 and below same could see a test of 757.7 levels, and resistance is now likely to be seen at 774.2, a move above could see prices testing 778.1.
 

Trading Ideas:
Copper trading range for the day is 757.7-778.1.
Copper rose as a jump in oil prices prompted investors' quest for a hedge against stubborn inflation
Peru community to restart blockade of Las Bambas mine road, neighbors pause protest
Warehouses monitored by the SHFE saw large inflows of inventories last week with copper surging by 164%.


Zinc

Zinc yesterday settled down by -1.58% at 299.95 as the social inventories of zinc ingot across seven major markets in China stood at 254,300 mt, up 11,600 mt from last Friday. The social inventory has reached the pre-pandemic level on the back of sluggish demand and steady arrivals at markets. Causes of the output increment: Yunnan Wenshan Zinc & Indium resumed the production after maintenance, bringing major increments. Some smelters in Shaanxi increased their production, but the output was lower than expected. Some smelters in Gansu resumed normal production. Causes of the output reduction: Some small and medium-sized smelters in Hunan suspended the production for the Chinese New Year (CNY) holiday in mid-to-late January, resulting in major reductions. Some smelters in Guangxi were shut down for maintenance; some in Sichuan were operating under production restrictions. China’s refined zinc output to increase by 76,000 mt to 529,000 mt, up 32,100 mt YoY. The more working days in March will lift the output increment of 29,100 mt. The rest of the increment will be contributed by the smelters that resume from maintenance or holidays. Technically market is under fresh selling as market has witnessed gain in open interest by 7.69% to settled at 2030 while prices down -4.8 rupees, now Zinc is getting support at 296.4 and below same could see a test of 292.7 levels, and resistance is now likely to be seen at 306.1, a move above could see prices testing 312.1.
 

Trading Ideas:
Zinc trading range for the day is 292.7-312.1.
Zinc dropped the social inventories of zinc ingot across seven major markets in China stood at 254,300 mt, up 11,600 mt
The social inventory has reached the pre-pandemic level on the back of sluggish demand and steady arrivals at markets.
China refined zinc output down 4.56% yoy in January


Nickel

Nickel yesterday settled up by 0.78% at 1779.8 due to escalating fears that reduced supplies from Russia would exacerbate existing shortages of metals. Shortages can be seen in dwindling inventories in LME registered warehouses. Nickel inventories at 84,894 tonnes have dropped 67% since April last year, while cancelled warrants stand at 50%. Worries about supplies on the LME market have seen cash aluminium trade at a premium over the three-month contracts for some time. Norilsk Nickel's cathode is deliverable against the nickel contract traded on the Shanghai Futures Exchange (ShFE). Nickel miner PT Vale Indonesia produced 65,388 tonnes of nickel matte in 2021, down from 72,237 tonnes produced in 2020. In the October-December quarter, its nickel matte production was 17,015 tonnes, up 3.5% on an annual basis. China's Tsingshan Holding Group has started to deliver nickel matte to Zhejiang Huayou Cobalt Co Ltd based on an earlier supply agreement. Tsingshan, the world's top nickel and stainless steel producer, reached agreements to provide 60,000 tonnes of nickel matte to Huayou and 40,000 tonnes to CNGR Advanced Material within one year from October 2021. Technically market is under short covering as market has witnessed drop in open interest by -2.44% to settled at 2198 while prices up 13.7 rupees, now Nickel is getting support at 1749.7 and below same could see a test of 1719.6 levels, and resistance is now likely to be seen at 1822.2, a move above could see prices testing 1864.6.
 

Trading Ideas:
Nickel trading range for the day is 1719.6-1864.6.
Nickel gained due to escalating fears that reduced supplies from Russia would exacerbate existing shortages of metals.
Shortages can be seen in dwindling inventories in LME registered warehouses.
Nickel inventories at 84,894 tonnes have dropped 67% since April last year, while cancelled warrants stand at 50%.


Aluminium

Aluminium yesterday settled up by 1.91% at 259.1 as most smelters in north China were late in resuming the production, and the operating rates in Shandong, Hebei and Henan rose slowly amid environmental protection measures. On the supply side, domestic aluminium output rose steadily, but the overall operating capacity was lower than in 2021. Meanwhile, the outbreak of COVID in Baise, Guangxi disturbed local production and logistics, further tightening spot supplies. On the macro front, US consumer confidence index rose to a 10-year low in early February, as market expects that the inflation will rise further in the short term, hence heightening the rate hike estimate. Meanwhile, the risk aversion sentiment was high triggered by Russia and Ukraine conflict over the weekend. Aluminium stocks at 868,950 tonnes have more than halved since March last year. Cancelled warrants -- metal earmarked for delivery -- at 30% suggests more aluminium will be delivered out over coming days and weeks. Worries about supplies on the LME market have seen cash aluminium trade at a premium over the three-month contracts for some time. Global primary aluminium output fell 1.25% year on year in December to 5.622 million tonnes, data from the International Aluminium Institute (IAI) showed. Technically market is under fresh buying as market has witnessed gain in open interest by 1.42% to settled at 2363 while prices up 4.85 rupees, now Aluminium is getting support at 255.7 and below same could see a test of 252.2 levels, and resistance is now likely to be seen at 261.4, a move above could see prices testing 263.6.
 

Trading Ideas:
Aluminium trading range for the day is 252.2-263.6.
Aluminium rose as most smelters in north China were late in resuming the production
Domestic aluminium output rose steadily, but the overall operating capacity was lower than in 2021.
The outbreak of COVID in Baise, Guangxi disturbed local production and logistics, further tightening spot supplies.


Mentha oil

Mentha oil yesterday settled up by 0.13% at 960 on short covering after prices dropped as sentiments dropped among the trader with the third wave of corona virus is spreading five times faster. There is an explosive situation of infection in seven states of the country. Due to the rapid spread of Omicron, this curiosity arises in the mind whether there will be a lock down in the country. Overall 2022 Q1 prices are expected to see good support as the Indian pharma industry has shown a double digit growth of around 15% led by growth of Covid-19 products in the last one year as against a single digit growth of 3% shown last year, according to Indian pharmaceutical market research company Pharmasofttech AWACS Pvt. Ltd in its latest report. Also as per the latest news going viral in market is that Mandi Tax has been exempted for exports and the orders have been sent to all Mandi Sectt offices district wise, while trader are waiting for complete information on same. Due to lackluster price move since last 2 year with poor export performance this year's sowing can see much impact resulting surge in prices. Also the FMCG makers also expect that a sudden increase in COVID cases and some restrictions imposed by local authorities in some states would again impact the demand for out of home' channels products, which was recovering from the last few months, though demand for home consumption and immunity products is going to gain for few weeks. In Sambhal spot market, Mentha oil dropped by -6 Rupees to end at 1112.1 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -0.63% to settled at 945 while prices up 1.2 rupees, now Mentha oil is getting support at 956.5 and below same could see a test of 953.1 levels, and resistance is now likely to be seen at 962.4, a move above could see prices testing 964.9.
 

Trading Ideas:
Mentha oil trading range for the day is 953.1-964.9.
In Sambhal spot market, Mentha oil dropped  by -6 Rupees to end at 1112.1 Rupees per 360 kgs.
Mentha oil gained on short covering after prices dropped as sentiments dropped with the third wave of corona virus is spreading faster.
Overall 2022 Q1 prices are expected to see good support as the Indian pharma industry has shown a double digit growth of around 15%.
# Due to lackluster price move since last 2 year with poor export performance this year's sowing can see much impact resulting surge in prices.


Turmeric

Turmeric yesterday settled down by -0.26% at 9886 as the arrival of the new crop has started in the markets of Telangana and Maharashtra. In the first 7 months (April-October) of the financial year 2021-22, exports declined by 23% to 89,850 tonnes over the previous year, but higher by 6.5% over the 5-year average. For the past three years, traders were offering lower price for turmeric due to lack of demand. Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones. The farmers, who incurred losses during this period due to low price, are hoping to get good price this year, so that they could clear their dues to some extent. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In Nizamabad, a major spot market in AP, the price ended at 9261.1 Rupees dropped -66.4 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 4.9% to settled at 11565 while prices down -26 rupees, now Turmeric is getting support at 9802 and below same could see a test of 9716 levels, and resistance is now likely to be seen at 10022, a move above could see prices testing 10156.
 

Trading Ideas:
Turmeric trading range for the day is 9716-10156.
Turmeric dropped as arrival of the new crop has started in the markets of Telangana and Maharashtra.
Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones.
In the first 7 months (April-October) of the financial year 2021-22, exports declined by 23% to 89,850 tonnes over the previous year.
In Nizamabad, a major spot market in AP, the price ended at 9261.1 Rupees dropped -66.4 Rupees.


Jeera

Jeera yesterday settled up by 2.42% at 21365 as there were reports of decline in sowing area and improving domestic demand. In 2021-22, the area under cumin in Gujarat is only 3.07 lakh hectares as against 4.69 lakh hectares in the same period last year and production is expected to decline by 41% to 2.37 lakh tonnes as compared to last year's 4 lakh tonnes as per second advance estimates. In Rajasthan too, there has been a decline of about 30% in the area. However export demand will still under pressure due to tariff cost and ahead of arrival despite the news that China export started again. According to government data, cumin exports declined by 24% year-on-year to 1.74 lakh tonnes in April-December from 2.30 lakh tonnes in the previous year. The export of cumin seeds declined by 20% year-on-year to 1.61 lakh tonnes in April-November, from 2.02 lakh tonnes in the previous year. There is a possibility of damage to the cumin crop due to rain and cloudy sky. The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability. The cropped area has fallen due to a shift towards other crops like cotton, soybean and mustard, which offered lucrative returns last year. In Unjha, a key spot market in Gujarat, jeera edged up by 400 Rupees to end at 20441.2 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 2.98% to settled at 10890 while prices up 505 rupees, now Jeera is getting support at 21110 and below same could see a test of 20850 levels, and resistance is now likely to be seen at 21535, a move above could see prices testing 21700.
 

Trading Ideas:
Jeera trading range for the day is 20850-21700.
Jeera gained as there were reports of decline in sowing area and improving domestic demand.
In 2021-22, the area under cumin in Gujarat is only 3.07 lakh hectares as against 4.69 lakh hectares in the same period last year.
In Rajasthan too, there has been a decline of about 30% in the area.
In Unjha, a key spot market in Gujarat, jeera edged up by 400 Rupees to end at 20441.2 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -1.51% at 37900 on reports U.S. cotton plantings are expected to climb amid strong foreign demand, higher input costs for farmers and prolonged drought in Texas, the crop’s top growing state. U.S. farmers are projected to sow 12 million acres for the season beginning Aug. 1, up about 7.3% from the previous year, according to the National Cotton Council’s planting-intentions survey showed. Global cotton consumption is expected to rise 2.8% this year, according to data from the United States Department of Agriculture. The low cotton yield this season due to excessive rain and pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). The U.S. Department of Agriculture (USDA) raised the estimate for U.S. stocks at the end of its 2021/22 crop year and projected a decline in the country's exports in its monthly supply-demand report. In its February World Agriculture Supply and Demand Estimates (WASDE) report, the USDA raised U.S. ending stocks estimates by 300,000 bales to 3.50 million bales, while U.S. production estimates were unchanged at 17.62 million bales. "The U.S. export forecast is lowered by 250,000 bales to 14.75 million based on lagging shipments due to logistical issues," the USDA said. In spot market, Cotton gained by 490 Rupees to end at 38120 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.85% to settled at 6082 while prices down -580 rupees, now Cotton is getting support at 37570 and below same could see a test of 37240 levels, and resistance is now likely to be seen at 38430, a move above could see prices testing 38960.
 

Trading Ideas:
Cotton trading range for the day is 37240-38960.
Cotton dropped on reports U.S. cotton plantings are expected to climb amid strong foreign demand, higher input costs for farmers and prolonged drought in Texas
Cotton supply from the world’s largest producer is poised for a rebound.
Global cotton consumption is expected to rise 2.8% this year
In spot market, Cotton gained  by 490 Rupees to end at 38120 Rupees.

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