IGI Logo

Gold 
Gold yesterday settled up by 0.02% at 51250 tracking the slight downturn in the US dollar as investors continued to assess the extent that tighter policy by the Fed will weigh on inflation and growth. Fed Chair Jerome Powell said at the Jackson Hole symposium that the central bank's efforts to combat inflation will cause "some pain." Powell reiterated the Fed's resolve to bring inflation back to its 2% target, declaring that the "economy does not work for anyone" without price stability. He added that the central bank would use its tools "forcefully" to bring demand and supply into better balance. Powell’s comments spurred a rally in the dollar, with the dollar trading around 20-year highs on Monday. Strength in the dollar, coupled with the prospect of rising interest rates severely dents gold’s outlook for the year. Over 60% of traders now expect the Fed to hike rates by 75bps- the upper end of forecasts- in September. Comments from several Fed officials suggest that U.S. interest rates could end the year significantly above 3%, from the current rate of 2.25 to 2.5%. Speculators cut their net long COMEX gold position by 15,910 contracts to 30,326 in the week to Aug. 23, data from the US CFTC showed. The ECB could discuss a 75 basis-point hike at its September meeting weighed as well. Technically market is under short covering as market has witnessed drop in open interest by -0.43% to settled at 13356 while prices up 12 rupees, now Gold is getting support at 50931 and below same could see a test of 50611 levels, and resistance is now likely to be seen at 51470, a move above could see prices testing 51689.

Trading Ideas:
* Gold trading range for the day is 50611-51689.
* Gold recovered all losses to settled flat tracking the slight downturn in the US dollar
* The dollar index appreciated past 109 on Monday, hitting its highest levels in 20 years
* Speculators cut their net long COMEX gold position by 15,910 contracts to 30,326 in the week to Aug. 23

Silver 
Silver yesterday settled down by -0.95% at 55240 amid rising interest rates worldwide and weakening demand. Progress toward green technologies, such as solar panel production suffered a setback as China and India take advantage of affordable oil and gas from Russia while Europe is returning to coal as an energy alternative. In the US, however, the Inflation Reduction Act will invest $430 billion in renewable energy. Also, a slowdown in the global economy is reducing the consumption of electronics and automobiles and sales of silver jewelry from major consumers China and India have been falling as stores close amid Covid outbreaks. On the supply front, silver output from Latin America has recovered from the Covid-19 hit as top producers Peru and Mexico lifted restrictions earlier than the rest of the world. US Federal Reserve Chair Jerome Powell delivered a stern commitment to combat inflation with higher interest rates in a policy speech at the Jackson Hole conference late last week. Powell warned strongly against prematurely loosening policy amid data showing possible signs of peak inflation, noting that the Fed’s focus is broader than a month or two of data and that it will continue pushing ahead until inflation moves down closer to its 2% target. Over the weekend, European Central Bank policymakers also made the case for a more aggressive response against surging inflation. Technically market is under fresh selling as market has witnessed gain in open interest by 19.64% to settled at 20977 while prices down -530 rupees, now Silver is getting support at 54604 and below same could see a test of 53967 levels, and resistance is now likely to be seen at 55674, a move above could see prices testing 56107.

Trading Ideas:
* Silver trading range for the day is 53967-56107.
* Silver prices dropped amid rising interest rates worldwide and weakening demand.
* Fed Chair Jerome Powell delivered a stern commitment to combat inflation with higher interest rates in a policy speech
* Silver output from Latin America has recovered from the Covid-19 hit as top producers Peru and Mexico lifted restrictions

Crude oil
Crude oil yesterday settled up by 4.36% at 7737 as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar and a dire outlook for U.S. growth. Saudi Arabia, top producer in the Organization of the Petroleum Exporting Countries (OPEC) last week raised the possibility of production cuts, which could coincide with a boost in supply from Iran should it clinch a nuclear deal with the West. OPEC+, comprising OPEC, Russia and allied producers, meets to set policy on Sept. 5. Oil's gain was limited by a strong U.S. dollar, which hit a 20-year high on Monday after the Federal Reserve chairman signalled that interest rates would be kept higher for longer to curb inflation. Unrest in Libya's capital at the weekend, resulting in 32 deaths, sparked concern that the country could slide into a full-blown conflict and disrupt in oil supply from the OPEC nation. U.S. crude stockpiles in the Strategic Petroleum Reserve fell last week to the lowest since January 1985, Energy Information Administration data showed. SPR crude stocks fell to 453.1 million barrels, the data showed. U.S. crude stocks, gasoline and distillate inventories fell last week, the Energy Information Administration said. Crude inventories fell by 3.3 million barrels in the week to Aug. 19 to 421.7 million barrels. Technically market is under fresh buying as market has witnessed gain in open interest by 92.64% to settled at 7646 while prices up 323 rupees, now Crude oil is getting support at 7544 and below same could see a test of 7351 levels, and resistance is now likely to be seen at 7842, a move above could see prices testing 7947.

Trading Ideas:
* Crude oil trading range for the day is 7351-7947.
*  Crude oil edged higher as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar
* Libya conflict sparks supply concern
* OPEC+ meets on Sept. 5

Nat.Gas 
Nat.Gas yesterday settled up by 0.59% at 748.8 as a series of heatwaves this summer across the United States has sent demand from gas-fired power plants to all-time highs as electricity generators boost production to meet the need for additional cooling. On top of that, expectations of increased demand for US LNG exports amid growing concerns of European shortages added to the bullish tone. Russia's Gazprom said it would halt flows through the Nord Stream 1 pipeline to Europe for three days of maintenance starting Wednesday, putting pressure on the region as it seeks to refuel ahead of winter to avoid a natural gas shortage. Meanwhile, Freeport LNG announced that it would delay the restart of its Quintana export plant to November, backtracking previous statements of an October restart and limiting further upside momentum. Russia is likely to ramp up gas flaring in the coming months as the country's gas storages fill up, International Energy Agency Executive Director Fatih Birol told. The U.S. Energy Information Administration reported an injection of 60 billion cubic feet (bcf) of gas to storage during the week ended Aug. 19, mostly in line with expectations. Technically market is under fresh buying as market has witnessed gain in open interest by 8.81% to settled at 6395 while prices up 4.4 rupees, now Natural gas is getting support at 723.5 and below same could see a test of 698.1 levels, and resistance is now likely to be seen at 769.6, a move above could see prices testing 790.3.

Trading Ideas:
* Natural gas trading range for the day is 698.1-790.3.
* Natural gas rose as a series of heatwaves this summer across the United States has sent demand from gas-fired power plants to all-time highs
* Expectations of increased demand for US LNG exports amid growing concerns of European shortages added to the bullish tone
* Russia likely to increase gas flaring as storages fill, IEA's Birol says

Copper 
Copper yesterday settled down by -1.33% at 668.4 as fears of a global economic slowdown reemerged after US Federal Reserve Chair Jerome Powell indicated commitment to bring down inflation with higher interest rates. Powell also warned that the fight against inflation could tilt the US into a painful period of slower economic growth and possibly rising joblessness. Copper, which is a leading indicator of the health of the global economy, could experience weakening demand as major economies prioritize price stability over economic expansion. Meanwhile, the metal remains about 15% above year-to-date lows as low inventories and production cuts lifted prices since mid-July. Copper inventories in LME-registered warehouses fell to 72,250 tonnes from 121,200 tonnes at the start of July, while those in warehouses monitored by the Shanghai Futures Exchange are near 13-year lows at 31,205 tonnes. Chilean state-owned miner Codelco lowered its copper production outlook for 2022 to a range between 1.49 million and 1.51 million tonnes, citing lower recovery levels at some of its mines and ore grades at the Chuquicamata site. Codelco, the world's largest producer of the red metal, previously expected to produce 1.61 million tonnes this year. Peru, the world's No. 2 copper producer, expects the price of the metal to fall to $3.40 per pound in 2023 from an average of $3.90 this year, according to forecasts from the economy ministry. Technically market is under fresh selling as market has witnessed gain in open interest by 16.01% to settled at 5885 while prices down -9 rupees, now Copper is getting support at 662.2 and below same could see a test of 656.1 levels, and resistance is now likely to be seen at 675.2, a move above could see prices testing 682.1.

Trading Ideas:
* Copper trading range for the day is 656.1-682.1.
* Copper Falls on Fed rate hike concerns
* Copper could experience weakening demand as major economies prioritize price stability over economic expansion.
* Copper inventories in LME-registered warehouses fell to 72,250 tonnes from 121,200 tonnes at the start of July

Zinc 
Zinc yesterday settled down by -0.45% at 317.35 amid surging US dollar index and rattled market nerves, despite supply tightness caused by energy crisis. But it is worth noting that spot supply in China was still tight, and the social inventory was still falling though the supply tightness in Tianjin eased as its high premiums have attracted sources from other markets. Zinc ingot social inventory stood at 123,300 mt across the seven major markets in China, down 2,700 mt from last Monday. The global zinc market saw a deficit of 1,400 tonnes in June from a revised deficit of 1,900 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 3,900 tonnes in May. During the first six months of 2022, ILZSG data showed a surplus of 27,000 tonnes versus a deficit of 4,000 tonnes in the same period of 2021. The offshore yuan depreciated past 6.90 against the dollar, languishing at its lowest levels in two years, as Federal Reserve Chair Jerome Powell delivered a stern commitment to bring down inflation by keeping US interest rates higher for longer. This presents a challenge to the People’s Bank of China which is being pressured to keep monetary policy accommodative to support China’s embattled economy. Technically market is under fresh selling as market has witnessed gain in open interest by 4.16% to settled at 1627 while prices down -1.45 rupees, now Zinc is getting support at 315.3 and below same could see a test of 313.1 levels, and resistance is now likely to be seen at 319, a move above could see prices testing 320.5.

Trading Ideas:
* Zinc trading range for the day is 313.1-320.5.
* Zinc prices dropped amid surging US dollar index and rattled market nerves, despite supply tightness caused by energy crisis.
* Zinc ingot social inventory stood at 123,300 mt across the seven major markets in China, down 2,700 mt from last Monday.
* Chinese Yuan languishes at 2-year lows

Aluminium 
Aluminium yesterday settled down by -0.19% at 215 as the power supply toward the industry sector is resuming in Sichuan province, and local aluminium smelters have been planning to resume the production. Investors assessed data released over the weekend showing China’s industrial profits fell sharply in July as fresh Covid-19 curbs weighed on demand and power shortages caused by heatwaves disrupted production. Federal Reserve Chair Jerome Powell delivered a stern commitment to bring down inflation by keeping US interest rates higher for longer. This presents a challenge to the People’s Bank of China which is being pressured to keep monetary policy accommodative to support China’s embattled economy. The aluminium ingot social inventories across China’s eight major markets totalled 682,000 mt as of August 29, up 3,000 mt from last Thursday, but 71,000 mt lower than in the same period last year. The figure was 12,000 mt higher than at the end of July. The overall growth was mainly contributed by east China as high aluminium prices last week cooled down buying interest. Inventory in Wuxi added 10,000 mt due to arrivals over the weekend, while that in Hangzhou rose 1,000 mt. Weekly shipments out of warehouses declined across each of the major markets, with Hangzhou registering a fall of over 50% to just 4,400 mt. Technically market is under long liquidation as market has witnessed drop in open interest by -3.25% to settled at 3694 while prices down -0.4 rupees, now Aluminium is getting support at 213.8 and below same could see a test of 212.6 levels, and resistance is now likely to be seen at 216, a move above could see prices testing 217.

Trading Ideas:
* Aluminium trading range for the day is 212.6-217.
* Aluminum dropped as the power supply toward the industry sector is resuming in Sichuan province
* China’s industrial profits fell sharply in July as fresh Covid-19 curbs weighed on demand.
* The aluminium ingot social inventories across China’s eight major markets totalled 682,000 mt as of August 29, up 3,000 mt

Mentha oil 
Mentha oil yesterday settled up by 0.59% at 975.5 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The 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 21.7 Rupees to end at 1136.1 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 0.12% to settled at 1621 while prices up 5.7 rupees, now Mentha oil is getting support at 970.5 and below same could see a test of 965.4 levels, and resistance is now likely to be seen at 979.3, a move above could see prices testing 983.

Trading Ideas:
* Mentha oil trading range for the day is 965.4-983.
* In Sambhal spot market, Mentha oil gained  by 21.7 Rupees to end at 1136.1 Rupees per 360 kgs.
* Mentha oil prices gained amid low production this season and improving demand post-pandemic.
* 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 -1.27% at 7156 amid profit booking 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 7413.75 Rupees dropped -53.45 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -5.35% to settled at 12910 while prices down -92 rupees, now Turmeric is getting support at 7108 and below same could see a test of 7058 levels, and resistance is now likely to be seen at 7240, a move above could see prices testing 7322.

Trading Ideas:
* Turmeric trading range for the day is 7058-7322.
* Turmeric dropped amid profit booking on report 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 7413.75 Rupees dropped -53.45 Rupees.

Jeera 
Jeera yesterday settled down by -1.43% at 25110 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 -305.1 Rupees to end at 24685.7 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.52% to settled at 6969 while prices down -365 rupees, now Jeera is getting support at 24800 and below same could see a test of 24490 levels, and resistance is now likely to be seen at 25530, a move above could see prices testing 25950.

Trading Ideas:
* Jeera trading range for the day is 24490-25950.
* 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 -305.1 Rupees to end at 24685.7 Rupees per 100 kg.

Cotton 
Cotton yesterday settled down by -1.14% at 38900 as India’s Cotton sowing gained by nearly 6.54% to 124.55 lakh hectares in 2022 against an area sown of 116.91 lakh hectares in 2021. In Gujarat Cotton sowing grows by nearly 13% with 2,538,383.00 hectares against sown area of 2021 which was 2,250,743.00 hectares. In Rajasthan Cotton sowing witnessed a gain of 3.76% with 652.61 thousand hectares as against 628.94 thousand hectares on the same day last year. 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. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. Whereas in Maharashtra and Telangana excess rainfall in July, over the major cotton-growing districts has affected the crop. In spot market, Cotton dropped by -310 Rupees to end at 46760 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.78% to settled at 661 while prices down -450 rupees, now Cotton is getting support at 38500 and below same could see a test of 38100 levels, and resistance is now likely to be seen at 39200, a move above could see prices testing 39500.

Trading Ideas:
* Cotton trading range for the day is 38100-39500.
* Cotton dropped as India’s Cotton sowing gained by nearly 6.54% to 124.55 lakh hectares in 2022
* 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 dropped  by -310 Rupees to end at 46760 Rupees.

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