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Gold

Gold yesterday settled up by 0.01% at 51389 drawing on support from escalating tensions between Beijing and Washington, although firmer U.S. Treasury yields capped gains. China condemned House of Representatives Speaker Nancy Pelosi's trip, the highest-level U.S. visit to Taiwan in 25 years, and responded with a flurry of military exercises, summoning the U.S. ambassador in Beijing, and announcing the suspension of several agricultural imports from Taiwan. The U.S. services industry unexpectedly picked up in July amid strong order growth, while supply bottlenecks and price pressures eased, supporting views that the economy was not in recession despite output slumping in the first half of the year. The Institute for Supply Management said its non-manufacturing PMI rebounded to a reading of 56.7 last month from 55.3 in June. The increase ended three straight monthly declines. The surprise rebound followed on the heels of the ISM's manufacturing survey showing factory activity slowing moderately last month. It was in stark contrast with the S&P Global survey showing the services sector shrinking in July. Both Chicago and San Francisco Fed governors said they are committed to the track of hiking rates to levels that might limit economic growth. Technically market is under short covering as market has witnessed drop in open interest by -0.7% to settled at 15464 while prices up 7 rupees, now Gold is getting support at 51216 and below same could see a test of 51043 levels, and resistance is now likely to be seen at 51621, a move above could see prices testing 51853.

Trading Ideas:
* Gold trading range for the day is 51043-51853.
* Gold prices steadied drawing on support from escalating tensions between Beijing and Washington
* Gold shrugging off rising yields a positive sign
* Fed officials walk back dovish Powell comments post-FOMC


Silver

Silver yesterday settled down by -0.06% at 57554 as dollar gained as several Federal Reserve officials signaled that they would pursue their aggressive tightening plans to bring inflation under control. St. Louis Fed President James Bullard mirrored his colleagues’ views, and indicated confidence that the economy can achieve a soft landing. Fed officials said they are committed to the track of hiking rates to levels that might limit economic growth. The Chicago Fed president Charles Evans, which tends to be very dovish, indicated a strong commitment to bringing down inflation to the central bank's target of 2%. Better-than-expected economic data also added to the bullish tone. The ISM non-manufacturing purchasing managers index came well above expectations, easing concerns about an imminent recession and cementing the view that a pivot in policy is unlikely to come soon. Traders now see a 44% chance the Fed might hike rates by 75 basis points at the September meeting. The ISM Services PMI unexpectedly increased to 56.7 in July of 2022, the highest in 3-months, from 55.3 in June and beating market forecasts of 53.5. New orders for US manufactured goods jumped 2% month-over-month in June of 2022, extending the upwardly revised 1.8% rise in May and well above market forecasts of a 1.1% increase, reflecting strong demand for products. Technically market is under fresh selling as market has witnessed gain in open interest by 1.26% to settled at 17545 while prices down -32 rupees, now Silver is getting support at 57167 and below same could see a test of 56781 levels, and resistance is now likely to be seen at 57942, a move above could see prices testing 58331.

Trading Ideas:
* Silver trading range for the day is 56781-58331.
* Silver settled flat as dollar gained as several Fed officials signaled that they would pursue their aggressive tightening plans to bring inflation under control.
* Fed’ Bullard mirrored his colleagues’ views, and indicated confidence that the economy can achieve a soft landing.
* Fed officials said they are committed to the track of hiking rates to levels that might limit economic growth.


Crude oil

Crude oil yesterday settled down by -3.42% at 7261 as data showed US inventories rose more than expected and as investors digested the latest OPEC+ decision to raise crude output by 100,000 bpd for next month. Demand for oil is expected to continue its recovery, albeit at a slower pace than earlier this year and last year, the secretary general of the Organization of Petroleum Exporting Countries told ahead of OPEC+ meeting. "We are still seeing increased demand for oil... compared to the period of the COVID-19 pandemic in 2020 and 2021. There is post-pandemic recovery, and we are still seeing that but there is a relative decrease in its pace," Haitham al-Ghais told. OPEC+ meets amid market expectations for a steady or a slight increase of oil output as most of its members are already pumping near capacity and are unable to meet U.S. calls for bigger production to help address soaring prices. The United States has put OPEC's leaders Saudi Arabia and fellow ally the United Arab Emirates under pressure to pump more oil to help with the confrontation of Russia over its invasion of Ukraine. U.S. and Western sanctions on Russia have caused prices of all types of energy to soar, resulting in inflation rising to multi-decade highs and central banks sharply raising interest rates. Technically market is under fresh selling as market has witnessed gain in open interest by 54.47% to settled at 7722 while prices down -257 rupees, now Crude oil is getting support at 7098 and below same could see a test of 6935 levels, and resistance is now likely to be seen at 7537, a move above could see prices testing 7813.

Trading Ideas:
* Crude oil trading range for the day is 6935-7813.
* Crude oil dropped as data showed US inventories rose more than expected and as investors digested the OPEC+ decision to raise crude output.
* OPEC+ agrees to raise September output target by 100,000 bpd
* OPEC+ meets amid market expectations for a steady or a slight increase of oil output


Nat.Gas

Nat.Gas yesterday settled up by 3.38% at 633.7 after Freeport LNG, a key export terminal in Texas, reached an agreement with regulators to restart as soon as October. Prospects of increasing need for cooling amid hotter-than-normal temperatures in the United States and continued robust demand from Europe as Nord Stream pipeline gas flows are down to 20% of capacity have been supporting prices. Russia has already halted shipments to Demark, Finland, Bulgaria, the Netherlands, and Poland and reduced supplies to Germany for not consenting to its natural gas payments demand in Russian rubles. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.5 bcfd so far in August from a record 96.7 bcfd in July. On a daily basis, however, output was on track to drop 1.9 bcfd to a preliminary 96.4 bcfd on Wednesday after soaring 2.4 bcfd to a daily record high of 98.4 bcfd on Friday. Preliminary data is often changed later in the day. With hotter weather expected, Refinitiv projected that average U.S. gas demand including exports would rise from 99.5 bcfd this week to 101.3 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Tuesday. Technically market is under fresh buying as market has witnessed gain in open interest by 8.54% to settled at 4180 while prices up 20.7 rupees, now Natural gas is getting support at 604.9 and below same could see a test of 576.2 levels, and resistance is now likely to be seen at 656, a move above could see prices testing 678.4.

Trading Ideas:
* Natural gas trading range for the day is 576.2-678.4.
* Natural gas rose after Freeport LNG, a key export terminal in Texas, reached an agreement with regulators to restart as soon as October.
* Russia has already halted shipments to Demark, Finland, Bulgaria, the Netherlands, and Poland and reduced supplies to Germany
* The United States became the world's top LNG exporter during the first half of 2022.



Copper

Copper yesterday settled flat at 642.15 as investors weighed lingering economic concerns and heightened geopolitical tensions against ongoing supply challenges. However, major copper producers have reported declining output and flagged supply risks, supporting a recent rally in the metal. Hopes for a rebound in demand and more stimulus from top importer China also helped sentiment. On Tuesday, Federal Reserve officials signaled resolve in raising interest rates to bring inflation under control, shooting down speculations that the US central bank may tighten less aggressively to avoid a recession. Escalating geopolitical tensions between the US and China also rattled financial markets as House Speaker Nancy Pelosi arrived in Taiwan late on Tuesday despite Beijing’s objections. Chile's copper production from state-owned giant Codelco fell 14.3% in June to reach 129,900 tonnes, government body Cochilco said. Production at Collahuasi, a joint venture of Anglo American and Glencore, dipped 6.9% on a year-on-year basis to 50,200 tonnes. Copper output from Escondida, which is controlled by Australian mining giant, rose 23.6% to 102,500 tonnes, Cochilco said. The country's total production, weighed down by the weak performance of the state-owned Codelco and the private Collahuasi, fell by 5% in June to 453,300 tonnes. Technically market is under long liquidation as market has witnessed drop in open interest by -2.08% to settled at 5702 while prices remain unchanged 0 rupees, now Copper is getting support at 638.3 and below same could see a test of 634.5 levels, and resistance is now likely to be seen at 647.6, a move above could see prices testing 653.1.

Trading Ideas:
* Copper trading range for the day is 634.5-653.1.
* Copper settled flat as investors weighed lingering economic concerns and heightened geopolitical tensions against ongoing supply challenges.
* Hopes for a rebound in demand and more stimulus from top importer China also helped sentiment.
* Chile's copper production from state-owned giant Codelco fell 14.3% in June to reach 129,900 tonnes



Zinc

Zinc yesterday settled up by 0.68% at 294.5 amid hopes of slowing interest rate hike and China's stimulus have supported. Denting the mood further, San Francisco Fed's Daly said the central bank's work of bringing down inflation is "nowhere near" almost done and there is still "a long way to go" to lower inflation from four-decade highs. However upside seen limited hawkish comments from U.S. Federal Reserve officials, while flaring geopolitical tensions between the U.S. and China during House Speaker Nancy Pelosi's trip to Taiwan aided risk-off sentiment. The Caixin China General Services PMI fell to 54.0 in July 2022 from June's 18-month peak of 55.3. Still, the latest result signaled a solid expansion in the private sector, with services activity rising faster amid a marked slowdown in manufacturing expansion. According to the data released by the London Metal Exchange (LME), since LME zinc inventory surged to a two-and-a-half-month high in mid-December 2021, it was on a downward trend again. The inventory continued to fall last week, with the latest data recording at 69,725 mt, the lowest level in more than two years. According to the data released by the Shanghai Futures Exchange, SHFE zinc inventory continued to decline by 4.51% to 97,316 mt last week, creating a five-and-a-half-month low. Technically market is under short covering as market has witnessed drop in open interest by -5.35% to settled at 1345 while prices up 2 rupees, now Zinc is getting support at 291.5 and below same could see a test of 288.3 levels, and resistance is now likely to be seen at 297, a move above could see prices testing 299.3.

Trading Ideas:
* Zinc trading range for the day is 288.3-299.3.
* Zinc prices rose amid hopes of slowing interest rate hike and China's stimulus have supported.
* LME inventory continued to fall last week, with the latest data recording at 69,725 mt, the lowest level in more than two years
* The Caixin China General Services PMI fell to 54.0 in July 2022 from June's 18-month peak of 55.3.


Aluminium

Aluminium yesterday settled down by -0.34% at 207.75 as risk aversion sentiment rose amid geopolitical tensions. The Caixin China General Services PMI fell to 54.0 in July 2022 from June's 18-month peak of 55.3. Still, the latest result signaled a solid expansion in the private sector, with services activity rising faster amid a marked slowdown in manufacturing expansion. New order growth accelerated slightly, while quicker falls in employment across both manufacturing and service sectors led to the fastest drop in composite employment in 17 months. Prices data pointed to the softest rise in overall input costs for just over two years, while output charges fell slightly amid price discounting at manufacturers. Gazprom PJSC's daily natural gas production plunged to its lowest level since 2008 in July, with exports to key markets falling for a fourth straight month. Western countries are increasingly worried that Russia may completely cut off gas supplies to Europe, exacerbating Europe's energy crisis. On the macro front, San Francisco Fed President Daley said that the Fed's task to bring down inflation is "far from completion", adding that Fed officials "remain steadfast and united" in their mission to achieve price stability. Job vacancies fell the most in more than two years, with demand for workers in retail and wholesale trade declining, but overall the labour market remained tight. Technically market is under fresh selling as market has witnessed gain in open interest by 6.58% to settled at 3987 while prices down -0.7 rupees, now Aluminium is getting support at 206.6 and below same could see a test of 205.4 levels, and resistance is now likely to be seen at 209.6, a move above could see prices testing 211.4.

Trading Ideas:
* Aluminium trading range for the day is 205.4-211.4.
* Aluminium settled down as risk aversion sentiment rose amid geopolitical tensions.
* China private sector growth stays robust
* China, aluminium ingot inventories have shown a trend of accumulation this week.


Mentha oil

Mentha oil yesterday settled down by -1.14% at 994.4 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 harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil dropped by -27.3 Rupees to end at 1112 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 0.19% to settled at 1609 while prices down -11.5 rupees, now Mentha oil is getting support at 986 and below same could see a test of 977.7 levels, and resistance is now likely to be seen at 1007.8, a move above could see prices testing 1021.3.

Trading Ideas:
* Mentha oil trading range for the day is 977.7-1021.3.
* In Sambhal spot market, Mentha oil dropped  by -27.3 Rupees to end at 1112 Rupees per 360 kgs.
* Mentha oil dropped as Synthetic Mentha supply remains uninterrupted.
* In the month of May 2022 around 209.90 tonnes Mentha was exported as against 170.22 in April 2022 showing a rise of 23.31%.
* In the month of May 2022 around 209.90 tonnes of Mentha was exported as against 179.76 in May 2021 showing a rise of 16.77%.


Turmeric

Turmeric yesterday settled down by -1.05% at 7506 on profit booking after prices seen supported amid expectations of decline in sown area in the ongoing kharif sowing season. Mandi arrivals of Turmeric, at all-India level, 0.22 lakh tonnes, marking a decline of 38% on m-o-m basis and 48% on y-o-y basis. The major Turmeric producing states such as Telangana, Maharashtra witnessed fall in mandi arrivals during the month of July. Turmeric sowing for marketing year 2023 has started across major production states. In the beginning of June, with the delay in monsoon progress over key Turmeric growing states like Andhra Pradesh, Maharashtra and Tamil Nadu, Turmeric sowings remained sluggish. Stockists have remained inactive due to availability of stock in Marathwada region. As per market feedback, in the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region. Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021. In the month of May 2022 around 17,137.15 tonnes turmeric was exported as against 13762.59 in April 2022 showing a rise of 24.51%. In the month of May 2022 around 17,137.15 tonnes of turmeric was exported as against 13,598.88 in May 2021 showing an increase of 26.02%. In Nizamabad, a major spot market in AP, the price ended at 7854.55 Rupees dropped -69.8 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.41% to settled at 13450 while prices down -80 rupees, now Turmeric is getting support at 7412 and below same could see a test of 7320 levels, and resistance is now likely to be seen at 7598, a move above could see prices testing 7692.

Trading Ideas:
* Turmeric trading range for the day is 7320-7692.
* Turmeric dropped on profit booking after prices seen supported amid expectations of decline in sown area in the ongoing kharif sowing season.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021.
* In Nizamabad, a major spot market in AP, the price ended at 7854.55 Rupees dropped -69.8 Rupees.


Jeera

Jeera yesterday settled down by -1.04% at 23810 on profit booking after prices seen supported 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. However, mandi arrivals were also lower by 39% compared to the corresponding period of the previous year. As per market feedback, export demand has decreased as compared to corresponding period of the previous year. The reason behind decline in export demand was lower exports to China, as the country had imposed lockdown amid resurgence of Covid. In last 3 years Jeera export was observed to be 7.30 Lakh Tonnes out of which 2.01 Lakh Tonnes was exported to China i.e 28% of total jeera exported. As per preliminary estimates, all-India Jeera production is expected to fall in the Marketing year 2022-23 (April-March) by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings. As per Fourth advance estimates released by Govt of Gujarat Jeera production is likely to fall by 45% to 2.22 lakh tonnes over the previous year. Area covered under cumin seed in Gujarat and Rajasthan state (considered together) has decreased by 28% over last year. In Unjha, a key spot market in Gujarat, jeera edged down by -19.85 Rupees to end at 23970.95 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -5.67% to settled at 7284 while prices down -250 rupees, now Jeera is getting support at 23560 and below same could see a test of 23315 levels, and resistance is now likely to be seen at 24050, a move above could see prices testing 24295.

Trading Ideas:
* Jeera trading range for the day is 23315-24295.
* Jeera dropped on profit booking after prices seen supported 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 -19.85 Rupees to end at 23970.95 Rupees per 100 kg.

 

Cotton

Cotton yesterday settled up by 3.3% at 47860 as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. According to government sources, if rains continue to hit the State for the next few days more crop is likely to get damaged. However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares. Looking at the current trend, cotton sowing in Maharashtra is expected to cross 4.2 million hectares. In Gujarat, it would be around 2.7 million hectares. The cotton acreage in north will be around 1.5 million hectares and the same for southern states is likely to remain at around 3.5-4.0 million hectare. Reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed. In Punjab, area under cotton cultivation dips to lowest since 2010, also Cotton crop in Punjab is on radar for second straight year as attack of whitefly, pink bollworm seen, as per the report. China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. In spot market, Cotton gained by 380 Rupees to end at 43940 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 2.89% to settled at 1352 while prices up 1530 rupees, now Cotton is getting support at 46870 and below same could see a test of 45870 levels, and resistance is now likely to be seen at 48460, a move above could see prices testing 49050.

Trading Ideas:

* Cotton trading range for the day is 45870-49050.
* Cotton prices seen supported as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State
* CAI reports at least 10% higher sowing is expected compared to previous 12 million hectares.
* The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month.
* In spot market, Cotton gained  by 380 Rupees to end at 43940 Rupees.

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