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Gold 

Gold yesterday settled down by -1.13% at 50228 as the dollar index jumped to top 109 amid increasing bets the Fed will deliver a 100bps rate hike in the fed funds rate later this month, which would be the largest increase since the central bank started directly using overnight interest rates to conduct monetary policy in the early 1990s. Fresh data recently released showed both consumer and producer inflation continued to accelerate in June, while the NFP report pointed to a tight labour market. The DXY is up more than 13% this year with the Euro hitting parity for the first time in 20 years and the yen trading above 139 for the first time since 1998. India's plain gold jewellery exports to the United Arab Emirates jumped in May and June after the Gulf state allowed duty free imports from the south Asian country, a leading trade body said. The United Arab Emirates and India signed a broad trade and investment pact in February aiming at increasing annual trade between the two nations to $100 billion within five years. India's plain gold jewellery exports to UAE in May jumped 72% from a year ago to 10.48 billion rupees ($131.16 million), while in June the exports jumped 69% to 145.2 billion rupees, the Gems and Jewellery Export Promotion Council (GJEPC) said. Technically market is under long liquidation as market has witnessed drop in open interest by -5.18% to settled at 7593 while prices down -574 rupees, now Gold is getting support at 49953 and below same could see a test of 49679 levels, and resistance is now likely to be seen at 50615, a move above could see prices testing 51003.

Trading Ideas:
* Gold trading range for the day is 49679-51003.
* Gold dropped as the dollar index jumped to top 109 amid increasing bets the Fed will deliver a 100bps rate hike in the fed funds rate later this month.
* Data released showed both consumer and producer inflation continued to accelerate in June, while the NFP report pointed to a tight labour market.
* India's gold jewellery exports to UAE jump on duty free imports

Silver 

Silver yesterday settled down by -3.66% at 55035 as red-hot U.S. inflation data fueled expectations about even more aggressive Federal Reserve monetary tightening at the upcoming policy meeting on July 26-27. Fed Governor Christopher Waller is scheduled to speak later today amid speculation the Federal Reserve could raise its target fed funds rate by 1 percentage point at its July 26-27 meeting. "Everything is in play," Atlanta Federal Reserve Bank President Raphael Bostic said. The number of Americans filing new claims for unemployment benefits increased by 9 thousand to 244 thousand the week that ended July 9th, the highest since November 2021 as more companies announce job cuts amid economic uncertainty. Figures compare to market expectations of 235 thousand. Producer prices for final demand in the US jumped 1.1% month-over-month in June of 2022, the most in three months and above market forecasts of 0.8%. Goods prices jumped 2.4%, much higher than 1.4% in May, with over half of the increase due to an 18.5% rise in gasoline prices. The indexes for diesel fuel, electric power, residential natural gas, motor vehicles and equipment, and processed young chickens also moved higher. Services cost rose 0.4%, slightly less than 0.6% in May, and mainly due to higher margins for food and alcohol retailing (3.8%). Technically market is under fresh selling as market has witnessed gain in open interest by 22% to settled at 25084 while prices down -2092 rupees, now Silver is getting support at 54032 and below same could see a test of 53028 levels, and resistance is now likely to be seen at 56514, a move above could see prices testing 57992.

Trading Ideas:
* Silver trading range for the day is 53028-57992.
* Silver dropped as red-hot U.S. inflation data fueled expectations about even more aggressive Federal Reserve monetary tightening.
* Fed’s Waller is scheduled to speak amid speculation the Federal Reserve could raise its target fed funds rate by 1 percentage point at its July 26-27 meeting.
* Everything is in play, Atlanta Federal Reserve Bank President Raphael Bostic said.

Crude oil 
Crude oil yesterday settled down by -1% at 7595 as investors focused on the prospect of a large U.S. rate hike later this month that could stem inflation but at the same time hit oil demand. U.S. crude oil and fuel stockpiles rose last week, bolstered by another big release from strategic reserves, while demand slackened, the Energy Information Administration said. Crude inventories rose by 3.3 million barrels in the week to July 8 to 423.8 million barrels, compared with expectations for a 154,000-barrel drop. Stocks in the Strategic Petroleum Reserve fell nearly 7 million barrels to their lowest since August 1985. Refinery crude runs rose by 202,000 barrels per day in the last week, boosting utilization rates by 0.4 percentage point to 94.9%. U.S. Gulf Coast utilization rates rose to 98.1% as facilities there have been running full-tilt to satiate strong demand and for overseas exports. U.S. demand tumbled in the most recent week, with product supplied slumping to 18.7 million bpd, its lowest since June 2021. The global oil market is "walking a tightrope" between scarce supply and the possibility of a recession, the International Energy Agency (IEA) said, with higher prices and worsening economic conditions already taking a toll on demand. "Rarely has the outlook for oil markets been more uncertain. Technically market is under long liquidation as market has witnessed drop in open interest by -26.29% to settled at 3233 while prices down -77 rupees, now Crude oil is getting support at 7332 and below same could see a test of 7069 levels, and resistance is now likely to be seen at 7798, a move above could see prices testing 8001.

Trading Ideas:
* Crude oil trading range for the day is 7069-8001.
* Crude oil prices fell as investors focused on the prospect of a large U.S. rate hike later this month that could stem inflation but at the same time hit oil demand.
* U.S. crude oil and fuel stockpiles rose last week, bolstered by another big release from strategic reserves
* Crude inventories rose by 3.3 million barrels in the week to July 8 to 423.8 million barrels

Natural Gas
Nat.Gas yesterday settled down by -0.99% at 527.9 ollowing the release of a report showing an expected bigger-than-usual gas storage build last week due to the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas. However downside seen limited on a drop in daily gas output over the past few days and forecasts for hotter weather and more demand over the next two weeks than previously expected. U.S. natural gas production and demand will both rise to record highs in 2022 as the economy grows, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO). EIA projected that dry gas production will rise to 96.23 billion cubic feet per day (bcfd) in 2022 and 99.98 bcfd in 2023 from a record 93.55 bcfd in 2021. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 95.9 bcfd so far in July from 95.3 bcfd in June. That compares with a monthly record high of 96.1 bcfd in December 2021. On a daily basis, however, U.S. output was on track to drop by 2.9 bcfd this week to a preliminary 11-week low of 93.7 bcfd on Thursday. Technically market is under long liquidation as market has witnessed drop in open interest by -10.93% to settled at 4565 while prices down -5.3 rupees, now Natural gas is getting support at 516.8 and below same could see a test of 505.6 levels, and resistance is now likely to be seen at 545.6, a move above could see prices testing 563.2.

Trading Ideas:
* Natural gas trading range for the day is 505.6-563.2.
* Natural gas slid following the release of a report showing an expected bigger-than-usual gas storage build.
* However downside seen limited on a drop in daily gas output over the past few days and forecasts for hotter weather
* Data showed US utilities added 58 billion cubic feet of gas to storage slightly bigger-than-normal

Copper

Copper yesterday settled down by -2.73% at 614.6 as markets braced for rapid interest rate rises that will slow economic growth and reduce demand for metals. Prices also fell as the dollar rose to a 20-year high as investors bet that the highest U.S. inflation since 1981 will trigger a supersized 1% U.S. interest rate hike this month. Growth is slowing globally. The European Commission cut its forecasts for the euro zone this year and next. At least five central banks have tightened policy in the last two days. Metals demand in China, the biggest consumer, has been weakened by a zero-COVID policy, which the government shows no sign of abandoning. However, exchange inventories are low, pointing to weak supply that should support prices. China's June copper imports rose 15.5 % from a month ago to 537,698 tonnes, customs data showed, after demand picked up following the lifting of COVID-19 lockdowns that had hurt manufacturing activity. The official manufacturing purchasing managers index (PMI) rose to 50.2 in June from 49.6 in May, the first time it rose above the 50-point mark that separates contraction from growth since February. China is the world's leading consumer of the metal, which is used in a range of sectors from electrical to construction and transport. Technically market is under fresh selling as market has witnessed gain in open interest by 2.78% to settled at 6289 while prices down -17.25 rupees, now Copper is getting support at 606.7 and below same could see a test of 598.8 levels, and resistance is now likely to be seen at 627.4, a move above could see prices testing 640.2.

Trading Ideas:
* Copper trading range for the day is 598.8-640.2.
* Copper prices fell as markets braced for rapid interest rate rises that will slow economic growth and reduce demand for metals.
* The European Commission cut its forecasts for the euro zone this year and next.
* Citi sees copper falling to $6,600/t over next 6 – 12 months

Zinc

Zinc yesterday settled down by -2.29% at 264.1 weighed down by heightened concerns of a global economic slowdown amid resurgent Covid-19 restrictions in top consumer China. Recession prospects also prevailed as major central banks signal aggressive tightening paths to combat surging inflation. The drawbacks could jeopordize Chinese authorities on their infrastructure push as the country aims to build a total of 461,000 kilometers of the national highway by 2035, weighing on metal consumption. In the zinc market, just 22,400 tonnes are available on-warrant in LME-registered warehouses, down from around 225,000 tonnes a year ago and near the lowest on record. That has pushed premium for quickly delivered cash zinc over the three-month contract to around $100 a tonne. The global zinc market moved to a surplus of 10,900 tonnes in April from a revised deficit of 31,700 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,300 tonnes in March. During the first four months of 2022, ILZSG data showed a deficit of 13,000 tonnes versus a surplus of 83,000 tonnes in the same period of 2021. Technically market is under long liquidation as market has witnessed drop in open interest by -2.89% to settled at 1479 while prices down -6.2 rupees, now Zinc is getting support at 260.8 and below same could see a test of 257.4 levels, and resistance is now likely to be seen at 268.7, a move above could see prices testing 273.2.

Trading Ideas:
* Zinc trading range for the day is 257.4-273.2.
* Zinc dropped weighed down by heightened concerns of a global economic slowdown amid resurgent Covid-19 restrictions in top consumer China.
* Recession prospects also prevailed as major central banks signal aggressive tightening paths to combat surging inflation.
* In the zinc market, just 22,400 tonnes are available on-warrant in LME-registered warehouses, down from around 225,000 tonnes a year ago.

Aluminium

Aluminium yesterday settled down by -0.99% at 204.15 as the production has been rising without news of production cuts for the moment. Prices were under significant pressure as increasingly hawkish central banks further dented the construction and industrial activity outlook. Demand was also seen lower in top consumer China as high temperatures and heavy rainfall led to canceled orders from power grid constructors. This added to limited purchasing from automobile and real estate markets ahead of the upcoming off-season. At the same time, Chinese smelters continued to increase production as factories resumed operations with increased capacity after Covid lockdowns. Output has already been on the upside as the country’s monthly aluminum production extended its record-high in May amid relaxed power consumption curbs. The US consumer price index jumped 9.1% year-on-year in June, the biggest rise in over 40 years. The market is even weighing a rate hike by 100 basis points in July. In addition, the aluminium ingot social inventories across China’s eight major markets totalled 697,000 mt as of July 14, down 26,000 mt from last Thursday and 136,000 mt lower than in the same period last year. A wave of downstream dip buying was seen in the middle of this week. Technically market is under long liquidation as market has witnessed drop in open interest by -2.46% to settled at 2815 while prices down -2.05 rupees, now Aluminium is getting support at 202.8 and below same could see a test of 201.5 levels, and resistance is now likely to be seen at 206.2, a move above could see prices testing 208.3.

Trading Ideas:
* Aluminium trading range for the day is 201.5-208.3.
* Aluminium dropped as the production has been rising without news of production cuts for the moment.
* Prices were under significant pressure as increasingly hawkish central banks further dented the construction and industrial activity outlook.
* Demand was also seen lower in top consumer China as high temperatures and heavy rainfall led to canceled orders from power grid constructors.

Mentha oil
Mentha oil yesterday settled up by 1.71% at 1015.9 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 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 -4.3 Rupees to end at 1124.3 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -2.26% to settled at 1036 while prices up 17.1 rupees, now Mentha oil is getting support at 999 and below same could see a test of 982 levels, and resistance is now likely to be seen at 1031, a move above could see prices testing 1046.

Trading Ideas:
* Mentha oil trading range for the day is 982-1046.
* In Sambhal spot market, Mentha oil dropped  by -4.3 Rupees to end at 1124.3 Rupees per 360 kgs.
* Mentha gained amid low production this season and improving demand post-pandemic.
* 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 -0.76% at 7828 on profit booking amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. However, downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8009.8 Rupees gained 135.65 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 10.64% to settled at 16845 while prices down -60 rupees, now Turmeric is getting support at 7782 and below same could see a test of 7736 levels, and resistance is now likely to be seen at 7894, a move above could see prices testing 7960.

Trading Ideas:
* Turmeric trading range for the day is 7736-7960.
* Turmeric dropped on profit booking amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* However, downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%.
* In Nizamabad, a major spot market in AP, the price ended at 8009.8 Rupees gained 135.65 Rupees.

Jeera

Jeera yesterday settled down by -0.26% at 22835 on profit booking after prices seen supported as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In view of the international situation of cumin seeds, all the countries of the whole world are not in a position to get cumin from a single country except India. Syria's crop is reported to have come absolutely negligible in the event of drought. Turkey has exited the international cumin market for the last 2 years. In Afghanistan, cumin has grown by 40 to 50% of the current year. Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival. China's demand for cumin is currently sporadic, with China buying 300 containers of Indian cumin in the month of June, the demand is very low at the moment. In Unjha, a key spot market in Gujarat, jeera edged up by 60.05 Rupees to end at 22510.8 Rupees per 100 kg.Technically market is under fresh selling as market has witnessed gain in open interest by 2.34% to settled at 12480 while prices down -60 rupees, now Jeera is getting support at 22690 and below same could see a test of 22545 levels, and resistance is now likely to be seen at 23075, a move above could see prices testing 23315.

Trading Ideas:
* Jeera trading range for the day is 22545-23315.
* Jeera dropped on profit booking after prices gained as in Gujarat and Rajasthan markets arrivals have remained low.
* Syria's crop is reported to have come absolutely negligible in the event of drought.
* Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival.
* In Unjha, a key spot market in Gujarat, jeera edged up by 60.05 Rupees to end at 22510.8 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -1.87% at 41350 as cotton sowing crossed the 10-million-hectare mark in the current kharif season. According to Atul Ganatra, president of the Cotton Association of India, 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. The area under cotton cultivation in Madhya Pradesh is likely to remain at nearly 600,000 hectares. Cotton production is likely to increase in the next global season (August 2022-July 2023) by 3.3 per cent, but consumption and world trade may remain stagnant or see a marginal rise only, the US Department of Agriculture (USDA) has said. “Global consumption prospects have declined as negative macroeconomic forces dampen consumer demand for goods as greater demand for services is manifest and combined with higher inflation. The World Bank and the Organization for Economic Co-operation and Development have downgraded their global economic outlooks recently relative to forecasts from earlier this year, and the International Monetary Fund has signalled a decline in its projections later this month,” the USDA said. In spot market, Cotton dropped by -610 Rupees to end at 41370 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -4.55% to settled at 1216 while prices down -790 rupees, now Cotton is getting support at 40950 and below same could see a test of 40560 levels, and resistance is now likely to be seen at 41990, a move above could see prices testing 42640.

Trading Ideas:
* Cotton trading range for the day is 40560-42640.
* Cotton prices dropped as cotton sowing crossed the 10-million-hectare mark in the current kharif season.
* Global cotton output likely to increase 3 per cent next season, says USDA
* At least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares - CAI
* In spot market, Cotton dropped  by -610 Rupees to end at 41370 Rupees.

-www.kediaadvisory.com

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