IGI Logo

Gold

Gold yesterday settled up by 1.32% at 54224 as investor fret about inflation and slowing global growth. The third round of talks between Ukraine and Russia failed to reach a deal on evacuation corridors from several besieged cities, as many of the routes were leading to Russia or its ally Belarus. The United States is planning to impose a ban on Russian oil imports without teaming up with its allies in Europe, although a final decision has not been made yet. Russia's Deputy Prime Minister Alexander Novak warned that Moscow could impose a ban on gas pumping through the Nord Stream 1 gas pipeline to retaliate against sanctions imposed by the West. The Perth Mint's sales of gold products in February rose 8.9% to their highest in three months as sales got a boost from the ongoing Russia-Ukraine crisis, while silver sales fell about 32% on the month. Monthly sales of gold coins and minted bars rose to 72,651 ounces in February, the highest since November last year, but still down 41% from a year earlier. Meanwhile, sales of silver products dropped to 1,632,323 ounces in February, falling nearly 11% from the same month in 2021. Technically market is under fresh buying as market has witnessed gain in open interest by 0.82% to settled at 10867 while prices up 707 rupees, now Gold is getting support at 53200 and below same could see a test of 52177 levels, and resistance is now likely to be seen at 55402, a move above could see prices testing 56581.
Trading Ideas:
Gold trading range for the day is 52177-56581.
Gold prices advanced as investor fret about inflation and slowing global growth.
The United States is planning to impose a ban on Russian oil imports without teaming up with its allies in Europe
US senators are considering locking down Russia's gold reserves


Silver

Silver yesterday settled up by 2.02% at 71385 as geopolitical and economic uncertainties surrounding the Russia-Ukraine war lifted demand for the safe-haven metal. The ongoing conflict in Ukraine showed no signs of de-escalation, shaking up commodity markets because Russia is such a heavyweight supplier in so many areas and a major gold producer. Surging commodity prices also fueled inflationary and growth concerns, presenting fresh challenges to central banks. Moreover, the London Bullion Market Association suspended six Russian precious metals refiners, prohibiting them from selling gold and silver in the London market. The US trade deficit widened to a record high of $89.7 billion in January of 2022 from an upwardly revised $82 billion in the previous month and above market forecasts of an $87.1 billion gap. It reflects an increase in the goods deficit of $7.1 billion to $108.9 billion, as soaring energy costs pushed imports to a record high while the services surplus narrowed by $0.6 billion to $19.2 billion. Imports increased 1.2% to a new record high of $314.1 billion, boosted by purchases of passenger cars, crude oil, natural gas, copper, food and capital goods. Exports fell 1.7% to $224.4 billion, led by pharmaceutical preparations, travel and services, while shipments increased for civilian aircrafts, telecommunications equipment and financial services. Technically market is under fresh buying as market has witnessed gain in open interest by 11.78% to settled at 7573 while prices up 1416 rupees, now Silver is getting support at 69800 and below same could see a test of 68214 levels, and resistance is now likely to be seen at 73025, a move above could see prices testing 74664.
Trading Ideas:
Silver trading range for the day is 68214-74664.
Silver rose as geopolitical and economic uncertainties surrounding the Russia-Ukraine war lifted demand for the safe-haven metal
The ongoing conflict in Ukraine showed no signs of de-escalation, shaking up commodity markets
The US trade deficit widened to a record high of $89.7 billion in January of 2022 from an upwardly revised $82 billion in the previous month


Crude oil

Crude oil yesterday settled up by 1.66% at 9438 as markets price in a significant disruption to Russian oil exports. A top Russian official has warned that a Western ban on Russian oil imports could result in oil prices more than doubling to about $300 per barrel and prompt the closure of the main gas pipeline from Russia to Germany. OPEC Secretary General Mohammad Barkindo also said that the world doesn’t have sufficient oil-production capacity to replace Russia’s contribution to the crude market. Russia is the world’s second-largest oil exporter after Saudi-Arabia. It produces around 10 million bpd, and around half of those go to foreign countries. Russia was the largest supplier of natural gas and crude oil to the EU in 2021, underscoring their crucial energy ties. The US imported an average of 209,000 bpd of Russian oil and 500,000 bpd of other petroleum products in 2021, according to the American Fuel and Petrochemical Manufactures (AFPM). Therefore, a stand-alone ban by the US will likely have limited impact on global supply without the participation of European counterparts. US crude inventories have fallen to 413 million barrels, the lowest level in more than three years. Falling inventories underscore strong demand for energy as the economy recovers from the Covid-19 pandemic. Technically market is under short covering as market has witnessed drop in open interest by -11.13% to settled at 8566 while prices up 154 rupees, now Crude oil is getting support at 9092 and below same could see a test of 8747 levels, and resistance is now likely to be seen at 9889, a move above could see prices testing 10341.
Trading Ideas:
Crude oil trading range for the day is 8747-10341.
Crude oil prices continued to surge as markets price in a significant disruption to Russian oil exports.
US crude inventories have fallen to 413 million barrels, the lowest level in more than three years.
Germany said Europe will continue to buy energy products from Russia


Nat.Gas

Nat.Gas yesterday settled down by -7.28% at 350.4 on rising output and forecasts for milder weather and lower heating demand over the next two weeks than previously expected. Global prices, however, were still about 13 times higher than U.S. futures, keeping demand for U.S. liquefied natural gas (LNG) exports strong as the Russia-Ukraine conflict stokes energy supply concerns. Data provider Refinitiv said average gas output in the U.S. Lower 48 states was on track to rise to 93.5 bcfd in March from 92.5 bcfd in February as more oil and gas wells return to service after freezing earlier in the year. With the coming of cooler weather next week, Refinitiv projected average U.S. gas demand, including exports, would rise from 109.7 bcfd this week to 110.0 bcfd next week. The forecast for next week, however, was much lower than Refinitiv's outlook on Monday. The amount of gas flowing to U.S. LNG export plants has risen to 12.57 bcfd so far in March, from 12.43 bcfd in February and a record 12.44 bcfd in January. The United States only has the capacity to turn about 12.5 bcfd of gas into LNG. The rest of the fuel flowing to the facilities is used to operate the plants. Technically market is under long liquidation as market has witnessed drop in open interest by -8.89% to settled at 4131 while prices down -27.5 rupees, now Natural gas is getting support at 340.2 and below same could see a test of 330 levels, and resistance is now likely to be seen at 368.3, a move above could see prices testing 386.2.
Trading Ideas:
Natural gas trading range for the day is 330-386.2.
Natural gas fell on rising output and forecasts for milder weather and lower heating demand over the next two weeks than previously expected.
Natural gas in Europe skyrocketed to fresh record highs after US Secretary of State Blinken said the West was discussing an embargo on Russian oil and gas.
In US natural gas stocks shrank slightly more than expected last week, and sit below the 5-year average.



Copper

Copper yesterday settled down by -0.39% at 840.1 on profit booking after prices rallied prices rallied amid lingering worries of supply disruptions due to war in Ukraine and historically low inventories. Copper stocks held by LME were at 68,825 tonnes, the lowest level since 2005. In February, those in the Shanghai Futures Exchange and Comex were below 200,000 tonnes. Suppliers are especially low in Europe and although Russia accounts only for 4% of global production Europe is the primary export market. Adding to woes, the world's biggest producer Chile, recorded its lowest January output since 2011, with production sinking 15% compared to December and 7.5% from January 2021. On the other side, copper usage is surging, especially in developed countries, with increasing demand for electric vehicles, wind farms, solar panels, and power grids. Chile's copper export revenue was $3.836 billion in February, down 9.2% from a year earlier, the central bank said. China's unwrought copper imports rose 9.6% during the first two months of 2022 compared with the same period a year earlier, customs data showed. Arrivals of unwrought copper and products into top consumer China were 969,000 tonnes in January and February combined, up from 884,010 tonnes a year earlier, the General Administration of Customs said. Technically market is under long liquidation as market has witnessed drop in open interest by -7.09% to settled at 2855 while prices down -3.3 rupees, now Copper is getting support at 820 and below same could see a test of 799.8 levels, and resistance is now likely to be seen at 866.9, a move above could see prices testing 893.6.
Trading Ideas:
Copper trading range for the day is 799.8-893.6.
Copper dropped on profit booking after prices rallied amid lingering worries of supply disruptions and historically low inventories.
PBOC sees 2022 increase in macro leverage ratio to keep stable.
Chile copper export $3.8 bln in February, down 9.2%


Zinc

Zinc yesterday settled down by -0.98% at 333 on profit booking after prices rallied as the market was in deep concern over supply shortage in the Europe. Meanwhile, the constantly rising electricity prices have greatly increased the production costs of smelters, which may endanger the supply in Europe. The inventory across seven regions in China added 2,800 mt from last Friday to 287,000 mt. The downstream consumption has been improving though the inventory still climbed. The market shall watch if the rising consumption could create a pivot to the social inventory. In terms of inventories, the latest data shows that overseas LME zinc inventories are at the lowest since July 2020. Domestically, before February 28, the total inventory of zinc ingots in the seven places of China was 283,500 mt. Inventories from home and abroad are in huge difference. As of March 4, the zinc ingot inventory across the seven major regions in China totalled 284,200 mt, up 700 mt from Monday February 28 and up 7,800 mt from last Friday February 25, according to data. The inventories in Shanghai increased significantly as the increase in downstream demand fell short of expectations while the arrivals were relatively stable. Technically market is under long liquidation as market has witnessed drop in open interest by -21.58% to settled at 974 while prices down -3.3 rupees, now Zinc is getting support at 308.8 and below same could see a test of 284.4 levels, and resistance is now likely to be seen at 367.1, a move above could see prices testing 401.
Trading Ideas:
Zinc trading range for the day is 284.4-401.
Zinc dropped on profit booking after prices rallied as the market was in deep concern over supply shortage in the Europe.
The constantly rising electricity prices have greatly increased the production costs of smelters, which may endanger the supply in Europe.
The inventory across seven regions in China added 2,800 mt from last Friday to 287,000 mt.


Nickel

Nickel yesterday settled down by -11.97% at 3341.2 on profit booking after prices rallied fuelled by a race to cover short positions after Western sanctions threatened supply from major producer Russia. The rare move underscores the market panic created by Russia's invasion of Ukraine with buyers scrambling for the metal crucial for making stainless steel and electric vehicle batteries. The uncertainty caused by Russia's invasion and resulting sanctions has added to an already bullish nickel market due to low inventories. Nickel prices have quadrupled over the past week on fears of further curbs on supply. Russia supplies about 10% of the world's nickel while Russian mining giant Nornickel is the world's top supplier of battery-grade nickel at 15%-20% of global supply. China's Wuxi Stainless Steel Exchange Center has halted trading for nickel products from March 8 pending further notice, and raised trading limits for both stainless steel products and nickel since settlement on March 7. The London Metal Exchange (LME) is imposing a backwardation limit and delivery deferral mechanism for physically settled base metals contracts with immediate effect, it said on Monday, citing the Russia-Ukraine conflict and tightness in the market. Technically market is under long liquidation as market has witnessed drop in open interest by -60.53% to settled at 375 while prices down -454.3 rupees, now Nickel is getting support at 2166.3 and below same could see a test of 991.5 levels, and resistance is now likely to be seen at 5066.6, a move above could see prices testing 6792.1.
Trading Ideas:
Nickel trading range for the day is 991.5-6792.1.
Nickel dropped on profit booking after prices rallied fuelled by a race to cover short positions after Western sanctions threatened supply from major producer Russia.
LME suspends nickel trading after prices soar past $100,000
US and European allies exploring the idea of banning imports of Russian oil have also spooked metals markets, which are up across the board.


Aluminium

Aluminium yesterday settled down by -6.99% at 279.9 on profit booking after prices rallied as Western sanctions against Russia over its invasion of Ukraine sparked concerns over the metal supply. Adding to supply fears are falling metal inventories in LME-registered warehouses. Aluminium stocks, at 794,150 tonnes, are down from almost 2 million tonnes last March. LME aluminium inventories fell to 794,150 mt as of March 4, approaching the previous low of 761,950 mt, after surging by 119,000 mt to 880,975 mt on February 10. In contrast, SHFE aluminium inventory kept rising and increased by 2.77% to 345,207 mt in the week of March 4, setting a new high in ten months. On the macro front, the European energy prices continued to rise, and the concerns over production cuts in Europe heightened, pulling up prices. Sanctions on Russian individuals and corporates have prompted many banks, shippers and other firms to stop working with Russian companies or goods. The quarterly negotiations for Japan's aluminium premiums for April-June are expected to take longer than usual due to uncertainty over supply from Russia. Japan is Asia's biggest importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region. Technically market is under long liquidation as market has witnessed drop in open interest by -26.39% to settled at 2240 while prices down -21.05 rupees, now Aluminium is getting support at 266.9 and below same could see a test of 253.8 levels, and resistance is now likely to be seen at 302.2, a move above could see prices testing 324.4.
Trading Ideas:
Aluminium trading range for the day is 253.8-324.4.
Aluminium dropped on profit booking after prices rallied as Western sanctions against Russia sparked concerns over the metal supply.
Adding to supply fears are falling metal inventories in LME-registered warehouses.
Aluminium stocks, at 794,150 tonnes, are down from almost 2 million tonnes last March.


Mentha oil
Mentha oil yesterday settled down by -2.71% at 1020.9 on profit booking after prices rallied as this time the farmers are planting less mentha crop due to lack of water. Farmers have started buying Mentha roots for sowing Mentha in their fields. However, upside seen limited as the war between Ukraine and Russia having a bad impact on prices. There is a demand for Mentha of about 200 crores in Russia and Ukraine. For this reason, the mentha traders are also worried about the fight between these two countries. Mentha worth six thousand crores is exported every year from all over the country. India is the largest producer and exporter of Mentha Oil and its derivatives. Every year about 20 thousand tons of mentha oil and related products are exported from here to America, China, Europe and South America. Fragrance Market in U.A.E. to Grow at 8.3% CAGR Through 2030, says P&S Intelligence. During the COVID-19 pandemic, the U.A.E. fragrance market was negatively affected. The production of non-essential goods was curtailed, while people were also forced inside their homes. The resulting slump in business, media & entertainment, and social activities reduced the demand for fragrances in the country. In Sambhal spot market, Mentha oil gained by 1.3 Rupees to end at 1121.6 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -2.61% to settled at 934 while prices down -28.4 rupees, now Mentha oil is getting support at 1008.2 and below same could see a test of 995.5 levels, and resistance is now likely to be seen at 1040.4, a move above could see prices testing 1059.9.
Trading Ideas:
Mentha oil trading range for the day is 995.5-1059.9.
In Sambhal spot market, Mentha oil gained  by 1.3 Rupees to end at 1121.6 Rupees per 360 kgs.
Mentha oil dropped on profit booking after prices rallied as this time the farmers are planting less mentha crop due to lack of water.
Farmers have started buying Mentha roots for sowing Mentha in their fields.
However, upside seen limited as the war between Ukraine and Russia having a bad impact on prices.


Turmeric

Turmeric yesterday settled down by -1.76% at 8924 as the arrival of the new crop has started in the markets of Telangana and Maharashtra. Pressure also seen due to tensions between Ukraine and Russia which may disrupt shipments of spices to Europe and other destinations. Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones. In the first 7 months (April-October) of the financial year 2021-22, exports declined by 23% to 89,850 tonnes over the previous year, but higher by 6.5% over the 5-year average. For the past three years, traders were offering lower price for turmeric due to lack of demand. The arrival of the new crop has started in the markets of Telangana and Maharashtra. The farmers, who incurred losses during this period due to low price, are hoping to get good price this year, so that they could clear their dues to some extent. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In Nizamabad, a major spot market in AP, the price ended at 9002.8 Rupees dropped -59.7 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.16% to settled at 12135 while prices down -160 rupees, now Turmeric is getting support at 8658 and below same could see a test of 8392 levels, and resistance is now likely to be seen at 9172, a move above could see prices testing 9420.
Trading Ideas:
Turmeric trading range for the day is 8392-9420.
Turmeric dropped as the arrival of the new crop has started in the markets of Telangana and Maharashtra
Pressure seen due to tensions between Ukraine and Russia which may disrupt shipments of spices to Europe and other destinations.
In the first 7 months (April-October) of the financial year 2021-22, exports declined by 23% to 89,850 tonnes over the previous year.
In Nizamabad, a major spot market in AP, the price ended at 9002.8 Rupees dropped -59.7 Rupees.


Jeera

Jeera yesterday settled up by 1.92% at 20740 as the area under jeera has decreased by about 30% in Rajasthan this year, to 5.39 lakh hectares (lh) from 7.7 lh last year, Spices Board officials confirmed. In Gujarat, the area has decreased to 3.40 lh from 4.70 lh last year. The crop will be around 60-65 lakh bags this year (of 55 kg each). Carry-forward stocks would be approximately 25 lakh bags. Last year's jeera crop was 93 lakh bags, with a carryover stock of 20 lakh bags. The decline in the jeera area is more pronounced in Rajasthan, where farmers have shifted to mustard because prices for the oilseed crop were favourable during the sowing season. However upside seen limited due to tensions between Ukraine and Russia which may disrupt shipments of spices to Europe and other destinations. Exports of jeera were estimated to be 2.99 lakh tonnes valued at 4,253.10 crores in 2020-21, up from 2.14 lakh tonnes valued at 3,328 crores the previous year. The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability. Exports of Indian cumin usually decrease after July-August every year when Turkey and Syria used to supply the global consumers. In Unjha, a key spot market in Gujarat, jeera edged down by -68.7 Rupees to end at 20294.45 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 12.32% to settled at 9711 while prices up 390 rupees, now Jeera is getting support at 19930 and below same could see a test of 19120 levels, and resistance is now likely to be seen at 21195, a move above could see prices testing 21650.
Trading Ideas:
Jeera trading range for the day is 19120-21650.
Jeera gained as area under jeera has decreased by about 30% in Rajasthan this year, to 5.39 lakh hectares (lh) from 7.7 lh last year
However upside seen limited due to tensions between Ukraine and Russia which may disrupt shipments of spices to Europe and other destinations.
In Gujarat, the area has decreased to 3.40 lh from 4.70 lh last year.
In Unjha, a key spot market in Gujarat, jeera edged down by -68.7 Rupees to end at 20294.45 Rupees per 100 kg.


Cotton

Cotton yesterday settled up by 0.46% at 37160 amid low cotton yield this season due to excessive rain and pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). Production of Cotton is estimated at 34.06 million bales (each of 170 kg) is higher by 1.12 million bales than the average cotton production of 32.95 million bales, as per 2nd Advance Estimates for 2021-22. India’s cotton production for the crop year 2021-2022 is estimated at 27million 480-Pound Bales versus USDA’s January estimate of 27.5million 480-pound bales and 2020- 21’s production of 27.6 480-pound bales. India’s ending stocks are estimated at 9.84million 480-pound bales for 2021-22, the lowest level in the 3-Year, versus 13.44 million 480- pound bales in 2020-2021 and 16.18 million 480- pound bales in 2019-20. The Cotton Association of India has reduced its cotton crop estimate for the 2021-22 season by 12.00 lakh bales to 34.8 million bales of 170 kgs from its previous estimate of 36 million bales of 170 kgs. As per USDA February report, the world-ending stock will fall further to 84.31million 480-pound bales, the lowest level in 3-Year, from their January’s forecast of 85.01million 480-pound bales and 2020-21’s Ending Stock of 88.41million 480-pound bales. In spot market, Cotton gained by 70 Rupees to end at 37010 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.04% to settled at 6875 while prices up 170 rupees, now Cotton is getting support at 36920 and below same could see a test of 36680 levels, and resistance is now likely to be seen at 37290, a move above could see prices testing 37420.
Trading Ideas:
Cotton trading range for the day is 36680-37420.
Cotton gained amid low cotton yield this season due to excessive rain and pink bollworm attack
Domestic cotton production has fallen for a third consecutive year in 2021-22
Domestic ending stocks will fall 26.8% in 2021-22 to a 3-Year low
In spot market, Cotton gained  by 70 Rupees to end at 37010 Rupees.

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