IGI Logo

Gold 

Gold yesterday settled down by -0.24% at 51479 as the dollar moved up amid expectations of more interest rate hikes by the Federal Reserve in the coming months. 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. Ahead of the next Fed meeting, traders will be heavily focused on the annual Jackson Hole economic symposium, jobs data and inflation. Coming out of the grip of economic slump brought in by the coronavirus pandemic, 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, according to government data. The imports stood at USD 12 billion during the same period a year ago. In July 2022, however, imports of the precious metal fell sharply by 43.6 per cent to USD 2.4 billion, as per the latest data released by the commerce ministry. Technically market is under long liquidation as market has witnessed drop in open interest by -2.37% to settled at 14436 while prices down -124 rupees, now Gold is getting support at 51385 and below same could see a test of 51292 levels, and resistance is now likely to be seen at 51621, a move above could see prices testing 51764.
 

Trading Ideas:

* Gold trading range for the day is 51292-51764.
* Gold slipped as the dollar moved up amid expectations of more interest rate hikes by the Federal Reserve in the coming months.
* Several U.S. Federal Reserve officials said that the central bank needs to keep raising interest rates to bring high inflation under    control.
* Gold imports up 6.4% to $13 billion in April-July due to 'healthy demand'

Silver

Silver yesterday settled down by -1.68% at 55496 as the Federal Reserve’s pledge to curb inflation drove investors to favor the US dollar instead of non-interest-bearing bullion assets. Data showing a drop in weekly jobless claims in the U.S. weighed as well on prices. Data released by the Labor Department showed initial jobless claims edged down to 250,000 in the week ended August 13th, a decrease of 2,000 from the previous week's revised level of 252,000. The Federal Reserve Bank of Philadelphia also released a report showing regional manufacturing activity unexpectedly returned to growth in the month of August. The Philly Fed said its diffusion index for current activity jumped to a positive 6.2 in August from a negative 12.3 in July, with a positive reading indicating growth. St. Louis Fed President Bullard said he is considering a third consecutive 75bps rate hike for the central bank’s upcoming meeting, citing the possibility that the US economy my still see higher inflation. Minutes from the FOMC July meeting indicated the Fed will abandon forward guidance and make decisions dependent on the latest data, while policymakers agreed that interest rates must continue to increase and reach a restrictive monetary setting instead of the current neutral level. Technically market is under fresh selling as market has witnessed gain in open interest by 5.81% to settled at 17599 while prices down -947 rupees, now Silver is getting support at 55099 and below same could see a test of 54703 levels, and resistance is now likely to be seen at 56048, a move above could see prices testing 56601.
 

Trading Ideas:

* Silver trading range for the day is 54703-56601.
* Silver fell as the Federal Reserve’s pledge to curb inflation drove investors to favor the US dollar instead of non-interest-bearing     bullion assets.
* Data showing a drop in weekly jobless claims in the U.S. weighed as well on prices.
* St. Louis Fed President Bullard said he is considering a third consecutive 75bps rate hike for the central bank’s upcoming meeting

Crude oil
Crude oil yesterday settled down by -0.52% at 7231 as concerns about a global economic slowdown weighed amid soaring inflation rates. U.S. crude inventories fell sharply as the nation exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding demand from European nations looking to replace Russian crude. Haitham Al Ghais, the new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters he was optimistic about oil demand into 2023. OPEC is keen to ensure Russia remains part of the OPEC+ group, Al Ghais said ahead of a Sept. 5 meeting. Supplies could tighten again when European buyers start seeking alternative supplies to replace Russian oil ahead of European Union sanctions that take effect from Dec. 5. In a sign of easing oil supply tightness, the price gap between prompt and second-month Brent futures has narrowed by about $5 a barrel since the end of July to under $1. U.S. crude exports jumped by a record 2.9 million barrels per day (bpd) last week to an all-time high of 5.0 million bpd, the U.S. Energy Information Administration (EIA) said. That helped cut U.S. net crude imports by a record 2.9 million bpd last week to an all-time low of 1.1 million bpd, according to EIA data going back to 2001. Technically market is under long liquidation as market has witnessed drop in open interest by -16.3% to settled at 3210 while prices down -38 rupees, now Crude oil is getting support at 7075 and below same could see a test of 6918 levels, and resistance is now likely to be seen at 7367, a move above could see prices testing 7502.
 

Trading Ideas:
* Crude oil trading range for the day is 6918-7502.
* Crude oil dropped as concerns about a global economic slowdown weighed amid soaring inflation rates.
* OPEC is keen to ensure Russia remains part of the OPEC+ group, Al Ghais said ahead of a Sept. 5 meeting.
* In a sign of easing oil supply tightness, the price gap between prompt and second-month Brent futures has narrowed to under $1.

Nat.Gas

Nat.Gas yesterday settled up by 0.04% at 742.7 recovering from lower levels on record global gas prices, concerns about Russian gas export to Europe and forecasts for hotter U.S. weather that will boost air conditioning demand through early September. That price increase came despite record output and the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. 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. The average amount of gas flowing to U.S. LNG export plants held at 10.9 bcfd so far in August, the same as July. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. The reduction in exports from Freeport is a problem for Europe, where most U.S. LNG has gone this year as countries there wean themselves off Russian energy. Technically market is under fresh buying as market has witnessed gain in open interest by 2.97% to settled at 6077 while prices up 0.3 rupees, now Natural gas is getting support at 717.8 and below same could see a test of 692.9 levels, and resistance is now likely to be seen at 758.4, a move above could see prices testing 774.1.
 

Trading Ideas:

* Natural gas trading range for the day is 692.9-774.1.
* Natural gas recovered on concerns about Russian gas export to Europe and forecasts for hotter U.S. weather that will boost air   conditioning demand through early September.
* Support also seen amid a smaller-than-expected storage build last week, record global prices and hot weather
* EIA forecast U.S. utilities added 18 billion cubic feet (bcf) of gas to storage during the week ended Aug.

Copper

Copper yesterday settled up by 0.45% at 673.8 but ended the week lower as traders balanced hopes for solid demand in China with pessimism about the global economy. Inflation data in Germany and Japan and statements from European and U.S. central bankers this week suggest that rapid, economically damaging interest rate rises will continue. However, China is widely expected to lower its benchmark lending rates and has pledged other stimulus to support its economy. Yangshan copper import premiums surged to $107 a tonne, from less than $10 in March, suggesting greater appetite for overseas metal. Copper stocks in Shanghai Futures Exchange (ShFE) warehouses fell to 31,205 tonnes on Friday from 41,811 tonnes a week earlier. Chinese demand is unlikely to revive strongly because its property market is in crisis, infrastructure construction is not rapid enough and export demand is weak.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 copper inputs. Meanwhile, data pointed to a 24% yearly decline in copper scrap production during July, as producers refrained from selling at unfavorable prices during the month. On top of that, Chinese copper cathode output for January-July missed expectations to mark a decrease of 0.4%. Technically market is under short covering as market has witnessed drop in open interest by -10.13% to settled at 3763 while prices up 3.05 rupees, now Copper is getting support at 667.8 and below same could see a test of 661.6 levels, and resistance is now likely to be seen at 678, a move above could see prices testing 682.

Trading Ideas:
* Copper trading range for the day is 661.6-682.
* Copper prices rose but ended the week lower as traders balanced hopes for solid demand in China with pessimism about the     global economy.
* China is widely expected to lower its benchmark lending rates and has pledged other stimulus to support its economy.
* Yangshan copper import premiums surged to $107 a tonne, from less than $10 in March, suggesting greater appetite for overseas metal.

Zinc

Zinc yesterday settled up by 0.11% at 315.05 amid lingering supply concerns due to production disruptions in Europe and China. Smelters in Europe have been curbing production as high energy prices exuberated by the war in Ukraine are making it unprofitable. Meanwhile, power-hurt downstream industrial activities could also weaken the demand of metals. Participants were awaiting to see if Sichuan would extend the power controls over the weekend, also whether power supply shortage would become a broader issue in the world's biggest metal producer and consumer. Provinces including Anhui, Zhejiang and Jiangsu have constrained industrial production to prioritize residential power usage but impacts on metals production were limited for now. A likely continued interest rate hikes in the U.S. also weighed down market sentiment after the Federal Reserve's meeting minutes showed officials were determined to curb rising prices. Data shows that the zinc ingot inventories across seven major markets in China totalled 132,200 mt as of August 19, down 5,400 mt from this Monday and 7,000 mt on a weekly basis. In particular, the arrivals in Shanghai market were low because some smelters had shipped zinc ingot to the downstream enterprises in other regions in advance. Shuangyan zinc could hardly be found in the spot market. Technically market is under fresh buying as market has witnessed gain in open interest by 8.31% to settled at 1316 while prices up 0.35 rupees, now Zinc is getting support at 311.7 and below same could see a test of 308.2 levels, and resistance is now likely to be seen at 318.8, a move above could see prices testing 322.4.

Trading Ideas:
* Zinc trading range for the day is 308.2-322.4.
* Zinc remained supported amid lingering supply concerns due to production disruptions in Europe and China.
*  Nyrstar, announced it would halt production from September 1st amid skyrocketing power prices.
* Data shows that the zinc ingot inventories across seven major markets in China totalled 132,200 mt down 5,400 mt from Monday

Aluminium

Aluminium yesterday settled down by -0.4% at 209.95 as fears of a demand-sapping global recession and higher production levels in China continued to hang over the market. Concerns about an economic and manufacturing slowdown have taken a front seat as increasingly hawkish central banks to rein in sky-high inflation have dented demand for industrial metals. This has come against a backdrop of increasing production from China as smelters recovered from last year’s aggressive energy efficiency targets and recent coronavirus-induced halts. China’s primary aluminum production rose 5.6% to a record monthly high of 3.43 million tonnes in July from a year earlier. A number of U.S. Federal Reserve officials said Thursday that the Fed needs to continue to raise borrowing costs to control high inflation; San Francisco Fed President Daley said that a 50 or 75 basis point rate hike in September would be a "reasonable" way to bring short-term borrowing costs to the level needed to curb inflation. U.S. initial jobless claims in the week of August 13 were 250,000, against an estimate of 265,000 and a previous reading of 262,000. On the fundamentals, aluminium capacity cuts due to power rationing in Sichuan province is expected to amount to 500,000 mt. Overseas, Hydro announced to cut the production of its two smelters in Slovakia and Norway by a combined 185,000 mt. Technically market is under long liquidation as market has witnessed drop in open interest by -9.91% to settled at 3035 while prices down -0.85 rupees, now Aluminium is getting support at 209.1 and below same could see a test of 208 levels, and resistance is now likely to be seen at 211.2, a move above could see prices testing 212.2.
 

Trading Ideas:

* Aluminium trading range for the day is 208-212.2.
* Aluminium dropped as fears of a demand-sapping global recession and higher production levels in China continued to hang over     the market.
* China’s primary aluminum production rose 5.6% to a record monthly high of 3.43 million tonnes in July from a year earlier.
* Aluminium capacity cuts due to power rationing in Sichuan province is expected to amount to 500,000 mt.

 Mentha oil

Mentha oil yesterday settled down by -0.38% at 969.8 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 gained by 0.8 Rupees to end at 1114 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -18.94% to settled at 890 while prices down -3.7 rupees, now Mentha oil is getting support at 963.4 and below same could see a test of 957 levels, and resistance is now likely to be seen at 978.8, a move above could see prices testing 987.8.

Trading Ideas:

* Mentha oil trading range for the day is 957-987.8.
* In Sambhal spot market, Mentha oil gained  by 0.8 Rupees to end at 1114 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 -0.46% at 7328 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 7469.25 Rupees dropped -40.2 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.8% to settled at 14830 while prices down -34 rupees, now Turmeric is getting support at 7260 and below same could see a test of 7194 levels, and resistance is now likely to be seen at 7386, a move above could see prices testing 7446.
 

Trading Ideas:
* Turmeric trading range for the day is 7194-7446.
* 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 7469.25 Rupees dropped -40.2 Rupees.

Jeera

Jeera yesterday settled down by -1.91% at 24910 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 up by 22.35 Rupees to end at 24645.5 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.33% to settled at 9288 while prices down -485 rupees, now Jeera is getting support at 24610 and below same could see a test of 24310 levels, and resistance is now likely to be seen at 25365, a move above could see prices testing 25820.
 

Trading Ideas:

* Jeera trading range for the day is 24310-25820.
* 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 up by 22.35 Rupees to end at 24645.5 Rupees per 100 kg.
 

Cotton

Cotton yesterday settled down by -0.59% at 50240 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 -5.23% to settled at 925 while prices down -300 rupees, now Cotton is getting support at 49860 and below same could see a test of 49480 levels, and resistance is now likely to be seen at 50610, a move above could see prices testing 50980.
 

Trading Ideas:

* Cotton trading range for the day is 49480-50980.
* 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.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer