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Gold

Gold yesterday settled up by 0.38% at 52489 following a pullback in the dollar and U.S. Treasury yields, while investor focus shifted to U.S. inflation data for clues on the Federal Reserve's rate hike plan. However, robust U.S. job growth reinforced expectations that the Fed will continue to raise rates in the next few meetings to slow inflation. Global gold-backed exchange-traded funds (ETFs) recorded net outflows of $4.5 billion in July as continued US dollar strength and softer inflation expectations weighed on investment activity, the World Gold Council has said. North American and European funds accounted for major share of the outflows while gold holdings in China increased, the trade body said in a report. Though this was the third consecutive month of outflows from global gold ETFs and the largest monthly outflow since March 2021, total holdings remain 5 per cent higher so far this year, at 3,708 tonnes worth $209bn, the WGC said. The Fed raised its policy rate by three-quarters of a percentage point. The U.S. central bank has raised that rate by 225 basis points since March, but investors had been assessing recently whether the Fed might be less aggressive in hiking rates in the future. Technically market is under fresh buying as market has witnessed gain in open interest by 1.1% to settled at 16474 while prices up 201 rupees, now Gold is getting support at 52312 and below same could see a test of 52135 levels, and resistance is now likely to be seen at 52633, a move above could see prices testing 52777.

Trading Ideas:
* Gold trading range for the day is 52135-52777.
* Gold prices rose following a pullback in the dollar and U.S. Treasury yields
* Robust U.S. job growth reinforced expectations that the Fed will continue to raise rates in the next few meetings to slow inflation.
* The U.S. consumer price index report due on Wednesday could offer clues on the Fed's next move.

Silver

Silver yesterday settled down by -0.45% at 58791 on profit booking investors looked forward to US inflation data later in the week that could offer more clues on the Federal Reserve’s rate hike path. A New York Federal Reserve survey pointed to a sharp decline in American consumers’ inflation expectations for the coming year and the next three years. Meanwhile, data last week showed that the US economy unexpectedly added 528,000 jobs in July, more than double the 250,000 jobs economists predicted. Markets are now betting that the Fed will deliver another 75 basis point rate hike in September. The Labor Department's data showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June. The report showed the unemployment rate unexpectedly edged down to 3.5% July from 3.6% in June. The unemployment rate was expected to remain unchanged. With the unexpected decrease, the unemployment rate fell to its lowest level since hitting a matching rate in February of 2020, just before Covid-19 lockdowns began to take effect in the U.S. Technically market is under fresh selling as market has witnessed gain in open interest by 1.4% to settled at 14840 while prices down -263 rupees, now Silver is getting support at 58504 and below same could see a test of 58217 levels, and resistance is now likely to be seen at 59195, a move above could see prices testing 59599.

Trading Ideas:
* Silver trading range for the day is 58217-59599.
* Silver dropped on profit booking with traders looking ahead to U.S. inflation data, for clues about the central bank's interest rate moves.
* A New York Federal Reserve survey pointed to a sharp decline in American consumers’ inflation expectations for the coming year
* The US economy unexpectedly added 528,000 jobs in July, more than double the 250,000 jobs economists predicted.

Crude oil

Crude oil yesterday settled up by 0.54% at 7224 as positive economic data from China and the United States fed hopes for demand despite nagging fears of a recession. China also surprised markets with faster-than-expected growth in exports. In Europe, Russian crude and oil products exports continued to flow ahead of an impending embargo from the European Union that will take effect on Dec. 5. In terms of U.S. production, energy firms last week cut the number of oil rigs by the most since September in the first drop in 10 weeks. China's crude oil imports in July fell 9.5% from a year earlier, with daily volumes at the second lowest in four years, as refiners drew down inventories and domestic fuel demand recovered more slowly than expected. The world's top crude buyer took in 37.33 million tonnes last month, data from the General Administration of Customs showed, equivalent to 8.79 million barrels per day (bpd). That edged up from June's 8.72 million bpd, but was down sharply from 9.7 million bpd in July 2021. Imports for the first seven months totalled 289.84 million tonnes, or about 9.98 million bpd, down 4% versus the same period last year, as extended COVID-19 restrictions and the government's curbs on fuel exports capped crude purchases. Technically market is under fresh buying as market has witnessed gain in open interest by 2.13% to settled at 7039 while prices up 39 rupees, now Crude oil is getting support at 7114 and below same could see a test of 7005 levels, and resistance is now likely to be seen at 7356, a move above could see prices testing 7489.

Trading Ideas:
* Crude oil trading range for the day is 7005-7489.
* Crude oil rose as positive economic data from China and the United States fed hopes for demand despite nagging fears of a recession.
* China also surprised markets with faster-than-expected growth in exports.
* China crude imports near 4-year low as refiners draw on stocks amid thin margins

Nat.Gas

Nat.Gas yesterday settled up by 2.26% at 620.4 on a preliminary drop in daily output and forecasts for more demand this week than previously expected due to an increase in pipeline exports to Mexico. That price increase came despite forecasts for less hot weather over the next two weeks that will reduce air conditioning use next week. Also weighing on prices was the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, both of which leaves more gas in the United States for utilities to inject into stockpiles for next winter. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.8 bcfd so far in August from a record 96.7 bcfd in July. On a daily basis, however, output was on track to drop by a preliminary 2.4 bcfd on Tuesday from a record 98.3 bcfd on Monday. That would be the biggest one-day drop since February. Preliminary data is often revised later in the day. With the weather expected to be less hot, Refinitiv projected average U.S. gas demand, including exports, would fall from 101.0 bcfd this week to 97.3 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Monday, while next week's forecast was lower. Technically market is under fresh buying as market has witnessed gain in open interest by 3.77% to settled at 3743 while prices up 13.7 rupees, now Natural gas is getting support at 610.6 and below same could see a test of 600.9 levels, and resistance is now likely to be seen at 629.4, a move above could see prices testing 638.5.

Trading Ideas:
* Natural gas trading range for the day is 600.9-638.5.
* Natural gas rose on a preliminary drop in daily output and forecasts for more demand than previously expected.
* That price increase came despite forecasts for less hot weather over the next two weeks that will reduce air conditioning use next week.
* Freeport expects to return the facility to at least partial service in early October.

Copper

Copper yesterday settled up by 0.15% at 663.65 as falling inventories and improved exports in top consumer China balanced out fears of weakening demand from a global recession. China's imports of copper rose 9.3% from a year earlier, customs data as a sharp drop in the price of the metal triggered buying appetite amid falling domestic inventories. Unwrought copper and copper product imports into China, including anode, refined, alloy and semi-finished copper products, totalled 463,693.8 tonnes in July, compared with 424,280.3 tonnes a year earlier. ShFE copper stockpile have dropped 79% since March to 34,768 tonnes, their lowest levels since Jan. 28. Red-hot inflation has prompted global central banks to hike interest rates and sparked fears of slowing growth and even a recession. Companies are bracing a tough second half of the year, cutting jobs and slowing hiring as growth slows, also partly due to an energy crisis in Europe. However, China's exports growth unexpectedly picked up speed in July, lifting some worries about metals demand in its biggest market. Meanwhile, investors remained cautious as a surprisingly strong US jobs report last week bolstered the Federal Reserve’s firm hawkish stance, while US inflation data due on Wednesday could offer more clues on the Fed’s rate hike path. Technically market is under fresh buying as market has witnessed gain in open interest by 2.22% to settled at 5515 while prices up 1 rupees, now Copper is getting support at 661.3 and below same could see a test of 659 levels, and resistance is now likely to be seen at 667.3, a move above could see prices testing 671.

Trading Ideas:
* Copper trading range for the day is 659-671.
* Copper prices rose as falling inventories and improved exports in China balanced out fears of weakening demand from a global recession.
* China July copper imports rise on-year as price slump spurs buying
* ShFE copper stockpile have dropped 79% since March to 34,768 tonnes, their lowest levels since Jan. 28.

Zinc

Zinc yesterday settled up by 2.52% at 315.15 as the production recovery progress in Shaanxi was slow with the goal of controlling cost. The China foreign trade data in July and the first seven months was better than expected, while the unexpectedly robust US job report has indicated stronger economy. Higher inventories in LME exchange warehouses raised concerns over demand for the metal despite prospects of disrupted supply amid an energy crisis. On-warrant zinc stocks in LME warehouses rose to 40,950 tonnes, their highest since June 20 and the biggest daily jump since January 2021, with most immediately available stocks in Taiwan and Singapore warehouses, LME data showed. Slowing global growth has weighed on metals prices as less economic activities imply subdued demand. An unexpectedly strong U.S. jobs data released on Friday also raised fears that the Federal Reserve would impose more aggressive rate hikes, which would further slow economic growth. However, zinc inventories in ShFE warehouses were still at their lowest since Jan. 21 at 88,896 tonnes by Aug. 5, down 50% since March. China's exports unexpectedly increased by 18% yoy to a seven-month high of USD 332.96 billion in July of 2022, beating market forecasts of 15% and following a 17.9% rise a month earlier. Technically market is under fresh buying as market has witnessed gain in open interest by 24.3% to settled at 1688 while prices up 7.75 rupees, now Zinc is getting support at 310.6 and below same could see a test of 306 levels, and resistance is now likely to be seen at 318.6, a move above could see prices testing 322.

Trading Ideas:
* Zinc trading range for the day is 306-322.
* Zinc gains as the production recovery progress in Shaanxi was slow with the goal of controlling cost.
* However, zinc inventories in ShFE warehouses were still at their lowest since Jan. 21 at 88,896 tonnes by Aug. 5, down 50% since March.
* LME zinc stocks have nearly halved in the past three months.

Aluminium

Aluminium yesterday settled up by 0.87% at 214.85 as declining inventories and robust trade data in top importer China outweighed concerns about a demand-sapping global recession. China's trade surplus unexpectedly surged to a fresh record peak of USD 101.26 billion in July 2022 from USD 55.89 billion in the same month a year earlier, far above market forecasts of USD 90 billion, mainly boosted by a jump in exports. China's exports unexpectedly increased by 18% yoy to a seven-month high of USD 332.96 billion in July of 2022. It was the biggest growth in shipments since January, as logistic issues continued to ease amid a further relaxation of COVID-19 restrictions. Foreign exchange reserves in China unexpectedly increased by $32.80 billion from the prior month to $3.104 trillion in July of 2022, compared with market forecasts of $3.05 trillion. Local media quoting the State Administration of Foreign Exchange (SAFE) said that China's foreign exchange market remains stable as domestic supply and demand keep in balance, adding that the country's resilient economy will further support the stability of the reserves. Meanwhile, investors remained cautious as a surprisingly strong US jobs report last week bolstered the Federal Reserve’s firm hawkish stance, while US inflation data due on Wednesday could offer more clues on the Fed’s rate hike path. Technically market is under fresh buying as market has witnessed gain in open interest by 9.1% to settled at 3070 while prices up 1.85 rupees, now Aluminium is getting support at 213.1 and below same could see a test of 211.2 levels, and resistance is now likely to be seen at 217.2, a move above could see prices testing 219.4.

Trading Ideas:
* Aluminium trading range for the day is 211.2-219.4.
* Aluminium gains as declining inventories and robust trade data in top importer China outweighed concerns about a demand-sapping global recession.
* China's exports unexpectedly increased by 18% yoy to a seven-month high of USD 332.96 billion in July of 2022
* Foreign exchange reserves in China unexpectedly increased by $32.80 billion from the prior month to $3.104 trillion in July of 2022

Mentha oil

Mentha oil yesterday settled flat at 993.6 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 gained by 8.7 Rupees to end at 1115.7 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed remain unchanged in open interest by 0% to settled at 1607 while prices remain unchanged 0 rupees, now Mentha oil is getting support at 989.7 and below same could see a test of 985.7 levels, and resistance is now likely to be seen at 997.3, a move above could see prices testing 1000.9.

Trading Ideas:
* Mentha oil trading range for the day is 985.7-1000.9.
* In Sambhal spot market, Mentha oil gained  by 8.7 Rupees to end at 1115.7 Rupees per 360 kgs.
* Mentha oil settled flat 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 -0.56% at 7432 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 7721.45 Rupees gained 28 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 46.12% to settled at 10455 while prices down -42 rupees, now Turmeric is getting support at 7356 and below same could see a test of 7280 levels, and resistance is now likely to be seen at 7514, a move above could see prices testing 7596.

Trading Ideas:
* Turmeric trading range for the day is 7280-7596.
* 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 7721.45 Rupees gained 28 Rupees.

Jeera

Jeera yesterday settled down by -1.27% at 24005 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 up by 41.3 Rupees to end at 23968.05 Rupees per 100 kg.Technically market is under fresh selling as market has witnessed gain in open interest by 7.05% to settled at 8478 while prices down -310 rupees, now Jeera is getting support at 23770 and below same could see a test of 23535 levels, and resistance is now likely to be seen at 24330, a move above could see prices testing 24655.

Trading Ideas:

* Jeera trading range for the day is 23535-24655.
* 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 up by 41.3 Rupees to end at 23968.05 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 1.07% at 48330 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. The heavy rainfall has caused heavy losses to the cotton crop in Narnaund, Baas, Hansi and Barwala regions of the Hisar. The Agriculture Department report has revealed that 49,212 acres of cotton crop has suffered above 26 per cent losses, of which the crop on 18,700 acres has reported damage above 50 per cent. In Rajasthan, Cotton sowing witnessed a gain of 7.99% with 647.1 thousand hectares as against 599.22 thousand hectares on the same day last year. However downside seen limited 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 spot market, Cotton gained by 240 Rupees to end at 44840 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.03% to settled at 1174 while prices up 510 rupees, now Cotton is getting support at 47790 and below same could see a test of 47250 levels, and resistance is now likely to be seen at 48820, a move above could see prices testing 49310.

Trading Ideas:
* Cotton trading range for the day is 47250-49310.
* Cotton gained as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State.
* India’s Cotton sowing gained by nearly 5.34% to 117.65 lakh hectares in 2022 against an area sown of 111.69 lakh hectares in 2021.
* In Rajasthan, Cotton sowing witnessed a gain of 7.99% with 647.1 thousand hectares as against 599.22 thousand hectares in 2021
* In spot market, Cotton gained  by 240 Rupees to end at 44840 Rupees.

- www.kediaadvisory.com

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