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Gold

Gold yesterday settled down by -0.26% at 51382 paring some gains seen earlier amid a dip in Treasury yields and growing recession fears. Gold has benefited from a host of dour economic data recently, with a survey showing that factories across the United States, Europe and Asia struggled for momentum last month. Investors are keeping a close eye on macro-economic indications since Fed Chair Jerome Powell said decisions on future rates will be determined by incoming data. Rate hikes by major central banks to combat soaring inflation typically weigh on bullion's appeal. Traders are also keeping watch on possible escalation in Sino-U.S. tension, with U.S. House of Representatives Speaker Nancy Pelosi set to begin a visit to Taiwan amid objections from China. Data last week showed the US economy shrank for a second straight quarter, fueling recession fears and raising expectations that the Fed may need to slow down the pace of interest rate hikes. The data was released a day after the US central bank raised its policy rate by 75 basis points in a widely expected move, with Fed Chair Jerome Powell saying that it will likely become appropriate to slow the pace of rate increases depending on the flow of data. Gold jewellery sales in the UAE grew at the fastest pace in the Gulf region on the back of improved sentiment and buying for festival and wedding season. Technically market is under long liquidation as market has witnessed drop in open interest by -1.01% to settled at 15573 while prices down -135 rupees, now Gold is getting support at 51221 and below same could see a test of 51061 levels, and resistance is now likely to be seen at 51640, a move above could see prices testing 51899.
 

Trading Ideas:
* Gold trading range for the day is 51061-51899.
* Gold prices pared gains after seen supported earlier amid a dip in Treasury yields and growing recession fears.
* Gold has benefited from a host of dour economic data recently, with a survey showing that factories across globe struggled for momentum
* Investors are keeping a close eye on macro-economic indications since Fed Chair Jerome Powell said decisions on future rates will be determined by incoming data.


Silver

Silver yesterday settled down by -1.27% at 57586 tracking weakness in base metals prices as geopolitical tensions between the US and China and economic concerns weigh on investors' mood. US House Speaker Nancy Pelosi will allegedly visit Taiwan and China has warned of "serious consequences" if the trip goes ahead. On the data front, unemployment in Spain increased in July for the first time since February of 2021, another sign that a recession in Europe may be on the corner. The ECB raised policy rates by a larger than expected 50bps increase and the BoE is likely to follow the same path next week. The ECB raised policy rates by a larger than expected 50bps increase and the BoE is likely to follow the same path next week. Fed Bank of Atlanta President Raphael Bostic said the monetary authority has further to go in raising borrowing costs. Separately, Fed Bank of Minneapolis President Neel Kashkari said the U.S. central bank is committed to slowing inflation to about 2 percent. On the data front, the latest manufacturing surveys released earlier in the day showed weakening factory activity in Asia and Europe. Technically market is under fresh selling as market has witnessed gain in open interest by 11.69% to settled at 17327 while prices down -740 rupees, now Silver is getting support at 57232 and below same could see a test of 56877 levels, and resistance is now likely to be seen at 58190, a move above could see prices testing 58793.
 

Trading Ideas:
* Silver trading range for the day is 56877-58793.
* Silver dropped tracking weakness in base metals prices as geopolitical tensions between the US and China
* US House Speaker Nancy Pelosi will allegedly visit Taiwan and China has warned of "serious consequences" if the trip goes ahead.
* Unemployment in Spain increased in July for the first time since February of 2021


Crude oil

Crude oil yesterday settled up by 1.24% at 7518 recovered from lows with traders weighing demand and supply prospects and looking ahead to the meeting of the OPEC+.Recessionary concerns were heightened as surveys from the United States, Europe and Asia showed that factories struggled for momentum in July. Flagging global demand and China's strict COVID-19 restrictions slowed production. The price drops also come as market participants await the outcome of a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to decide on September output. The United States imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars' in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear programme. Also casting a cloud over the market is the possibility of a visit to Taiwan by U.S. Speaker of the House Nancy Pelosi, despite Beijing's warnings against it. The visit would mark the first time a high-profile U.S. official has been on the island in over 25 years, which could escalate tensions between the U.S. and China. Technically market is under short covering as market has witnessed drop in open interest by -27.09% to settled at 4999 while prices up 92 rupees, now Crude oil is getting support at 7355 and below same could see a test of 7193 levels, and resistance is now likely to be seen at 7633, a move above could see prices testing 7749.
 

Trading Ideas:
* Crude oil trading range for the day is 7193-7749.
* Crude oil prices recovered from lows with traders weighing demand and supply prospects and looking ahead to the meeting of the OPEC+.
* Saudi Arabia will push OPEC+ to increase oil production at the meeting.
* Flagging global demand and China's strict COVID-19 restrictions slowed production.


Nat.Gas

Nat.Gas yesterday settled down by -5.03% at 613 pressured by record levels of output as domestic producers have been taking advantage of higher prices. 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. The United States became the world's top LNG exporter during the first half of 2022. But no matter how high global gas prices rise, the United States cannot export any more LNG because its plants were already operating at full capacity. Russian gas exports on the three main lines into Germany – Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route – rose to 2.5 bcfd on Monday from 2.4 bcfd on Sunday. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.4 bcfd so far in August from a record 96.7 bcfd in July. Technically market is under long liquidation as market has witnessed drop in open interest by -13.73% to settled at 3851 while prices down -32.5 rupees, now Natural gas is getting support at 593.8 and below same could see a test of 574.6 levels, and resistance is now likely to be seen at 639.8, a move above could see prices testing 666.6.
 

Trading Ideas:
* Natural gas trading range for the day is 574.6-666.6.
* Natural gas dropped pressured by record levels of output as domestic producers have been taking advantage of higher prices.
* 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 down by -0.9% at 642.15 as escalating tensions between the US and China ahead of US House Speaker Nancy Pelosi’s visit to Taiwan prompted a broad decline in risk assets. Weak manufacturing data in major economies such as the US, China and the eurozone area also reflected the darkening economic outlook and mounting risk of a global recession, putting downward pressure on metals markets. Meanwhile, copper prices held close to their highest levels in nearly a month as major producers reported falling output and flagged supply risks. Codelco, the world’s biggest copper miner, produced 7.5% less output in the first half of 2022 versus last year, while Glencore cut its full-year copper guidance. Pressure seen as disappointing factory data from top consumer China reaffirmed weak demand outlook that has been pressuring the metals market. China's factory activity contracted unexpectedly in July after bouncing back from COVID-19 lockdowns the month before, as fresh virus flare-ups and a darkening global outlook weighed on demand. The U.S. economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining, raising the risk that the economy was on the cusp of a recession. Technically market is under fresh selling as market has witnessed gain in open interest by 0.29% to settled at 5823 while prices down -5.8 rupees, now Copper is getting support at 636.2 and below same could see a test of 630.2 levels, and resistance is now likely to be seen at 648.8, a move above could see prices testing 655.4.
 

Trading Ideas:
* Copper trading range for the day is 630.2-655.4.
* Copper falls as US-China tensions rises
* China's factory activity contracted unexpectedly in July
* Codelco, said it produced 736,000 tonnes of copper between January and June, a 7.5% fall versus the first half of 2021.


Zinc

Zinc yesterday settled down by -1.99% at 292.5 as weak factory activity data in top consumer China highlighted the suppressed demand outlook that has been weighing on the metals market. Global zinc market flipped to a deficit of 3,900 tonnes in May from a revised surplus of 31,000 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Data last week also showed the US economy contracted for the second straight quarter, with falling consumer and business spending all piling to the risk of a potential recession. Asia's factories struggled for momentum in July as China's strict COVID restrictions and flagging global demand slowed production, although early signs red-hot inflation may be peaking provided some optimism for firms squeezed by prices. A series of purchasing managers' indexes (PMI) for July showed new orders falling in the region's manufacturing powerhouses, particularly tech giants in northeast Asia. China's factory activity expanded at a slower pace in July, as growth momentum softened in output, new orders and employment, a private sector poll showed. The Caixin/Markit manufacturing purchasing managers' index (PMI) eased to 50.4 in July from 51.7 in the previous month. The reading was well below analysts' expectations for a slight dip to 51.5. The 50-point index mark separates growth from contraction on a monthly basis. Technically market is under long liquidation as market has witnessed drop in open interest by -15.67% to settled at 1421 while prices down -5.95 rupees, now Zinc is getting support at 290.4 and below same could see a test of 288.3 levels, and resistance is now likely to be seen at 296.4, a move above could see prices testing 300.3.
 

Trading Ideas:
* Zinc trading range for the day is 288.3-300.3.
* Zinc dropped as weak factory activity data in top consumer China highlighted the suppressed demand outlook that has been weighing on the metals market.
* China's July factory activity grows at slower pace - Caixin PMI
* Asia's factories squeezed by higher prices, weak demand



Aluminium

Aluminium yesterday settled down by -1.21% at 208.45 amid outlooks of lower demand and strong inventories in China. Base metal prices were under pressure as the worsening macroeconomic backdrop extended concerns of slowing demand. NBS PMI data showed that the Chinese manufacturing sector unexpectedly contracted in July, dragged by widespread Covid lockdowns and rising concerns of the poor state of Chinese debt. In the meantime, fresh data showed that aluminum ingot inventories rose by 7 thousand tonnes on the week to 678 thousand tonnes on August 1. China is playing a crucial role in rebalancing the global aluminium supply chain in the wake of Russia's invasion of Ukraine. The country has lifted exports of alumina to Russia, compensating for the loss of raw materials feed after Australia banned exports in reaction to what the Kremlin terms its "special military operation". China has also stepped up exports of aluminium this year, particularly to Europe, where smelters are struggling with the power price surge resulting from reduced flows of Russian gas. The country's exports of semi-manufactured products are also accelerating, although this is unlikely to be seen as a welcome development by the West, which has long accused China of dumping aluminium in this form. Technically market is under fresh selling as market has witnessed gain in open interest by 11.17% to settled at 3741 while prices down -2.55 rupees, now Aluminium is getting support at 207.5 and below same could see a test of 206.6 levels, and resistance is now likely to be seen at 210, a move above could see prices testing 211.6.
 

Trading Ideas:
* Aluminium trading range for the day is 206.6-211.6.
* Aluminum fell amid outlooks of lower demand and strong inventories in China.
* Prices were under pressure as the worsening macroeconomic backdrop extended concerns of slowing demand.
* In the meantime, fresh data showed that aluminum ingot inventories rose by 7 thousand tonnes on the week to 678 thousand tonnes on August 1.


Mentha oil

Mentha oil yesterday settled down by -1.37% at 1005.9 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 -2 Rupees to end at 1139.3 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.19% to settled at 1606 while prices down -14 rupees, now Mentha oil is getting support at 994.6 and below same could see a test of 983.3 levels, and resistance is now likely to be seen at 1020.6, a move above could see prices testing 1035.3.
 

Trading Ideas:
* Mentha oil trading range for the day is 983.3-1035.3.
* In Sambhal spot market, Mentha oil dropped  by -2 Rupees to end at 1139.3 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 -2.34% at 7586 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 7924.35 Rupees dropped -21.35 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.92% to settled at 13925 while prices down -182 rupees, now Turmeric is getting support at 7454 and below same could see a test of 7322 levels, and resistance is now likely to be seen at 7770, a move above could see prices testing 7954.

Trading Ideas:
*Turmeric trading range for the day is 7322-7954.
* 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 7924.35 Rupees dropped -21.35 Rupees.


Jeera

Jeera yesterday settled down by -0.43% at 24060 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 -315.5 Rupees to end at 23990.8 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.81% to settled at 7722 while prices down -105 rupees, now Jeera is getting support at 23920 and below same could see a test of 23775 levels, and resistance is now likely to be seen at 24205, a move above could see prices testing 24345.
 

Trading Ideas:
* Jeera trading range for the day is 23775-24345.
* 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 -315.5 Rupees to end at 23990.8 Rupees per 100 kg.


Cotton

Cotton yesterday settled up by 3.44% at 46330 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 170 Rupees to end at 43560 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.15% to settled at 1314 while prices up 1540 rupees, now Cotton is getting support at 45160 and below same could see a test of 44000 levels, and resistance is now likely to be seen at 47030, a move above could see prices testing 47740.
 

Trading Ideas:
* Cotton trading range for the day is 44000-47740.
* 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 170 Rupees to end at 43560 Rupees.

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