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Gold 

Gold yesterday settled down by -0.08% at 50320 after several Federal Reserve officials said that the U.S. central bank will likely stick to its decision for a 75-bps rate hike this month. The dollar was also pressured by new reports suggesting that ECB policymakers will discuss whether to raise rates by 25 or 50 points at their meeting on Thursday to tame record-high inflation. On the data front, Eurostat data showed that the region's inflation accelerated as estimated in June to set a fresh record high, driven by higher energy and food prices. Headline consumer price inflation surged to 8.6 percent from 8.1 percent in May. In the U.K., stronger-than-expected U.K. jobs data heightened fears of more interest-rate hikes. The ILO unemployment rate came in at 3.8 percent in three months to May, unchanged from three months to April but down by 0.1 percentage points on the quarter. The rate was forecast to rise to 3.9 percent. Building permits in the US, a proxy for future construction, decreased 0.6% to an annualized rate of 1.685 million in June of 2022, the lowest level since September last year and compared to forecasts of 1.65 million. It was the third consecutive month of declines in permits. Housing starts in the US dropped 2% month-over-month to an annualized rate of 1.559 million units in June of 2022, the lowest since September last year. Technically market is under long liquidation as market has witnessed drop in open interest by -4.38% to settled at 5898 while prices down -41 rupees, now Gold is getting support at 50191 and below same could see a test of 50062 levels, and resistance is now likely to be seen at 50469, a move above could see prices testing 50618.

Trading Ideas:
* Gold trading range for the day is 50062-50618.
 * Gold steadied after several Federal Reserve officials said that the U.S. central bank will likely stick to its decision for a 75-bps rate hike this month.
* The dollar was also pressured by new reports suggesting that ECB policymakers will discuss whether to raise rates by 25 or 50 points.
* Eurostat data showed that the region's inflation accelerated as estimated in June to set a fresh record high

Silver
Silver yesterday settled down by -0.65% at 55727 as worries about demand in China and an aggressive tightening by the Federal Reserve to rein on sky-high inflation spooked investors from the non-yielding metal. Federal Reserve officials have reiterated their determination to rein in inflation, setting expectations for a back-to-back 75 basis point rate hike in July. Putting a floor under prices were lingering concerns about slowing economic growth, particularly in Europe, as surging gas prices threaten the outlook for the bloc. The yield on the benchmark 10-year Treasury note edged up toward 3% in the third week of July, as investors continued to weigh the outlook of tighter monetary policy. Last Friday, Fed Governor Waller and St Louis Fed Governor James Bullard said they favoured a 75 bps interest rate increase, rather than the 100 bps move. At the same time, recent economic data showed the economy remains robust, despite strong inflation and rising interest rates. Fed policymakers enter a "blackout" period this week before the FOMC meeting on July 26th and 27th. Focus this week will be on corporate earnings and housing market indicators. Technically market is under fresh selling as market has witnessed gain in open interest by 2.7% to settled at 21843 while prices down -364 rupees, now Silver is getting support at 55486 and below same could see a test of 55244 levels, and resistance is now likely to be seen at 55985, a move above could see prices testing 56242.

Trading Ideas:
* Silver trading range for the day is 55244-56242.
* Silver dropped as worries about demand in China and an aggressive tightening by Fed to rein on sky-high inflation spooked investors from metal.
* Fed officials have reiterated their determination to rein in inflation, setting expectations for a back-to-back 75 basis point rate hike in July.
* Putting a floor under prices were lingering concerns about slowing economic growth, as surging gas prices threaten the outlook for the bloc.

Crude oil 
Crude oil yesterday settled up by 1.74% at 8056 after early weakness and ended higher amid signs of tighter supplies in the global oil market. Senior US State Department adviser for energy security Amos Hochstein said there is additional spare capacity and room for production increase, following US President Biden's visit to the Middle East. Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 78,000 barrels per day (bpd) to a record 5.445 million bpd in August, the U.S. Energy Information Administration (EIA) said in its productivity report. Total output in the major U.S. shale oil basins will rise 136,000 bpd to 9.068 million bpd in August, the highest since March 2020, the EIA projected. Meanwhile, Saudi ministers insisted that policy decisions would be based on market dynamics and according to the OPEC+ meeting on August 3rd. The US oil benchmark has been swinging down since mid-June amid growing recession concerns, driven by aggressive rate hikes worldwide, Covid-19 lockdowns in China and western proposals for a price cap on Russian oil. Saudi Arabia's crude oil exports in May fell to 7.050 million barrels per day from 7.382 million bpd in April, official data showed. Building permits in the US, a proxy for future construction, decreased 0.6% to an annualized rate of 1.685 million in June of 2022. Technically market is under fresh buying as market has witnessed gain in open interest by 47.85% to settled at 4981 while prices up 138 rupees, now Crude oil is getting support at 7834 and below same could see a test of 7611 levels, and resistance is now likely to be seen at 8180, a move above could see prices testing 8303.

Trading Ideas:
* Crude oil trading range for the day is 7611-8303.
* Crude oil recovered after early weakness and ended higher amid signs of tighter supplies in the global oil market.
* Oil output in Permian to rise in August to highest on record – EIA
* Saudi ministers insisted that policy decisions would be based on market dynamics and according to the OPEC+ meeting on August 3rd.

Natural gas 
Nat.Gas yesterday settled down by -1.78% at 586.5 as overall output continues to rise to record levels and a small and brief decline in gas flowing to liquefied natural gas (LNG) export plants. That price decline came despite a preliminary one-day drop in output, a preliminary increase in LNG feed gas and forecasts for hotter weather and higher air conditioning demand next week than previously expected. Natural gas production from seven key U.S. onshore regions is set to rise 748 MMcf/d month/month to just over 93 Bcf/d in August, according to updated modeling from the Energy Information Administration (EIA). Extreme heat has already boosted power demand to record highs in several parts of the country, including Texas and other U.S. Central states, as homes and businesses crank up their air conditioners to escape the weather. Also pressuring gas prices was the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which leaves more fuel in the United States for utilities to refill low storage. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 96.1 bcfd so far in July from 95.3 bcfd in June. On a daily basis, however, output was on track to drop by a preliminary 2.5 bcfd on Tuesday from a six-month high of 97.2 bcfd on Monday. Technically market is under long liquidation as market has witnessed drop in open interest by -21.9% to settled at 5517 while prices down -10.6 rupees, now Natural gas is getting support at 568.7 and below same could see a test of 551 levels, and resistance is now likely to be seen at 603.4, a move above could see prices testing 620.4.

Trading Ideas:
* Natural gas trading range for the day is 551-620.4.
* Natural gas fell as overall output continues to rise to record levels and a small and brief decline in gas flowing to LNG export plants.
* Also pressuring gas prices was the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas
* Natural gas production from seven key U.S. onshore regions is set to rise 748 MMcf/d month/month to just over 93 Bcf/d in August.

Copper

Copper yesterday settled down by -1.08% at 624.15 weighed by a firm dollar and fear of softening demand amid disappointing data from the United States. Weak demand from top metals consumer China due to COVID-19 outbreaks and fear of a looming global recession also weighed on prices. U.S. home builder sentiment plummeted in July to its lowest level since the early months of the pandemic, as high inflation and the steepest borrowing costs in more than a decade brought customer traffic to a near standstill. Copper demand is unlikely to recover significantly until China stimulus targets its property market, but this may not happen for months, until sliding exports trigger a sizeable response. Further undermining copper and other industrial metals, barometers of manufacturing health, are interest rates hikes to rein in inflation which have hit economic growth in the United States, Europe and Asia. China's overall exports are still climbing, up at the fastest pace in five months in June as factories revved up after COVID restrictions were lifted and supply chain disruptions and port congestion eased. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 2.9% from last Friday, the exchange said. Technically market is under fresh selling as market has witnessed gain in open interest by 0.7% to settled at 4905 while prices down -6.8 rupees, now Copper is getting support at 618.5 and below same could see a test of 612.8 levels, and resistance is now likely to be seen at 628.5, a move above could see prices testing 632.8.

Trading Ideas:
* Copper trading range for the day is 612.8-632.8.
* Copper prices fell weighed by a firm dollar and fear of softening demand amid disappointing data from the United States.
* Weak demand from top metals consumer China due to COVID-19 outbreaks and fear of a looming global recession also weighed on prices.
* Copper demand is unlikely to recover significantly until China stimulus targets its property market

Zinc

Zinc yesterday settled down by -1.22% at 272.35 as 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. Energy shortage in the Europe has prevented smelters from resuming the production, while macro pressure has capped the contract. Market sentiment eased after Fed officials hinted that they did not advocate raising interest rates by 100 basis points in July. The market lowered the expectation of the Fed to raise interest rates aggressively, and the sentiment was somewhat restored. The China Banking and Insurance Regulatory Commission urged banks to extend loans to qualified real estate projects and meet developers financing needs where reasonable, after a growing number of home buyers across China threatened to stop making mortgage payments for unfinished houses. Still, prices for the red metal remain more than 30% below their March peak as fears of a demand-sapping global recession continued to mount. Technically market is under long liquidation as market has witnessed drop in open interest by -5.12% to settled at 1205 while prices down -3.35 rupees, now Zinc is getting support at 269.6 and below same could see a test of 266.8 levels, and resistance is now likely to be seen at 274.6, a move above could see prices testing 276.8.

Trading Ideas:
* Zinc trading range for the day is 266.8-276.8.
* Zinc prices dropped as 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
* Energy shortage in the Europe has prevented smelters from resuming the production, while macro pressure has capped the contract.
* Market sentiment eased after Fed officials hinted that they did not advocate raising interest rates by 100 basis points in July.

Aluminium

Aluminium yesterday settled down by -1.35% at 207.6 as the smelters had no plans of suspending the production for the moment, and the demand side was still modest. According to the General Administration of Customs, China imported 9.42 million mt of aluminium ore and concentrate in June, down 7.5% YoY. The combined imports in the first six months of 2022 totalled 65.2 million mt, up 18.1% YoY. The alumina exports stood at 190,000 mt in June, a surge of 3,664.8% YoY. The exports in the first half of 2022 were 570,000 mt, up 1,268.3% YoY. The aluminium ingot social inventories across China’s eight major markets totalled 682,000 mt as of July 18, down 15,000 mt from last Thursday and 148,000 mt lower than in the same period last year. Downstream producers became more willing to buy after aluminium prices fell to around 17,000 yuan/mt. The weekly shipments out of warehouses in the eight major markets rose 12,400 mt to 152,000 mt last week. Arrivals in Wuxi will gradually return to normal after being hampered by the pandemic. On the fundamentals, domestic aluminium supply kept rising, indicating supply pressure. On the demand side, deeply diving aluminium prices earlier stimulated downstream restocking, and the social inventory kept dropping. Technically market is under long liquidation as market has witnessed drop in open interest by -2.3% to settled at 2378 while prices down -2.85 rupees, now Aluminium is getting support at 206.4 and below same could see a test of 205.1 levels, and resistance is now likely to be seen at 209.9, a move above could see prices testing 212.1.

Trading Ideas:

* Aluminium trading range for the day is 205.1-212.1.
* Aluminium dropped as the smelters had no plans of suspending the production for the moment, and the demand side was still modest.
* China imported 9.42 million mt of aluminium ore and concentrate in June, down 7.5% YoY.
* The aluminium ingot social inventories across China’s eight major markets totalled 682,000 mt down 15,000 mt from last Thursday

Mentha oil 
Mentha oil yesterday settled up by 0.32% at 1009.2 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 -21.1 Rupees to end at 1105.6 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -4.47% to settled at 918 while prices up 3.2 rupees, now Mentha oil is getting support at 1002.8 and below same could see a test of 996.3 levels, and resistance is now likely to be seen at 1016.9, a move above could see prices testing 1024.5.

Trading Ideas:
* Mentha oil trading range for the day is 996.3-1024.5.
* In Sambhal spot market, Mentha oil dropped  by -21.1 Rupees to end at 1105.6 Rupees per 360 kgs.
* Mentha oil gains amid low production this season and improving demand
* 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 up by 0.36% at 7716 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 8072.2 Rupees gained 42.35 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -0.88% to settled at 16400 while prices up 28 rupees, now Turmeric is getting support at 7656 and below same could see a test of 7596 levels, and resistance is now likely to be seen at 7770, a move above could see prices testing 7824.

Trading Ideas:
* Turmeric trading range for the day is 7596-7824.
* Turmeric prices gained 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 8072.2 Rupees gained 42.35 Rupees.

Jeera

Jeera yesterday settled up by 1.07% at 23695 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 31.55 Rupees to end at 23042 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 0.49% to settled at 12357 while prices up 250 rupees, now Jeera is getting support at 23430 and below same could see a test of 23170 levels, and resistance is now likely to be seen at 23855, a move above could see prices testing 24020.

Trading Ideas:
* Jeera trading range for the day is 23170-24020.
* Jeera prices gained as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices.
* 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 31.55 Rupees to end at 23042 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.26% at 43150 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 dropped by -100 Rupees to end at 41180 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.26% to settled at 1160 while prices up 110 rupees, now Cotton is getting support at 42600 and below same could see a test of 42050 levels, and resistance is now likely to be seen at 43470, a move above could see prices testing 43790.

Trading Ideas:
* Cotton trading range for the day is 42050-43790.
* Cotton gains as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State.
* However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 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 dropped  by -100 Rupees to end at 41180 Rupees.

- www.kediaadvisory.com

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