IGI Logo

Gold : yeste rday settled down by -0.57% at 51543 as the dollar and U.S. Treasury yields firmed, while investors zoned in on the upcoming minutes from the U.S. Federal Reserve's July meeting. Price seen under pressure amid expectations that the Fed will tighten monetary settings further despite signs of easing inflation and slowing growth. UK inflation jumped in July to the highest since February 1982, surpassing forecasts and fuelling investor bets that the BoE would keep on hiking interest rates quickly. Richmond Fed Bank President Thomas Barkin said that the Fed will have to continue to move rates into “restrictive territory” until he sees inflation sustainably moving within the target range for a significant period. While gold is seen as a hedge against inflation and economic uncertainties, higher interest rates raise the cost of holding non-yielding bullion, denting its appeal. The Venezuelan central bank's gold reserves dropped by six tonnes as of June 2022, according to the bank's first-half balance sheet. The quantity of gold bars in the bank's vaults at the end of the first half of the year was equivalent to 73 tonnes, the lowest in 50 years, according to notes on the bank's financial statements. In the second half of 2021, the central bank had about 79 tonnes in its vaults. Technically market is under long liquidation as market has witnessed drop in open interest by -1.94% to settled at 14901 while prices down -294 rupees, now Gold is getting support at 51353 and below same could see a test of 51164 levels, and resistance is now likely to be seen at 51848, a move above could see prices testing 52154

Trading Ideas: 

* Gold trading range for the day is 51164-52154.

* Gold prices extended losses as the dollar and U.S. Treasury yields firmed

* Price seen under pressure amid expectations that the Fed will tighten monetary settings further despite signs of easing inflation and slowing growth.

* UK inflation leaps into double digits, highest since 1982

Silver : yesterday settled down by -1.3% at 56915 as a stronger dollar spooked investors away from the non-yielding metal. Markets continued to bet that the Federal Reserve would go ahead with its aggressive tightening plan despite signs of cooling inflation. Several Fed policymakers last week pointed out that a dovish pivot is unlikely. Other speeches this week and the FOMC minutes release due on Wednesday are now highly expected for clues about the central bank's rate path. Manufacturers’ and trade inventories in the US rose 1.4 percent from a month earlier in June of 2022, following an upwardly revised 1.6 percent gain in the prior month and matching market forecasts. Interest-rate worries were back in focus after data showed Britain's inflation rate rose to a new 40-year high of 10.1 percent in July. The U.K. consumer price index climbed from 9.4 percent in June to 10.1 percent in July, raising expectations for a 50 basis-point rate hike by the Bank of England at the meeting in September. Separately, preliminary data from Eurostat revealed that growth in the Eurozone slowed slightly in the second quarter. Seasonally adjusted GDP in the common currency area rose by 0.6 percent during the period, down from 0.7 percent in the prior quarter. Technically market is under fresh selling as market has witnessed gain in open interest by 9.25% to settled at 16500 while prices down -750 rupees, now Silver is getting support at 56424 and below same could see a test of 55932 levels, and resistance is now likely to be seen at 57699, a move above could see prices testing 58482.

Trading Ideas:

* Silver trading range for the day is 55932-58482.

*Silver dropped as a stronger dollar spooked investors away from the non-yielding metal.

* US retail sales stalled in July, indicating that sky-high inflation continued to curb consumer spending

* Interest-rate worries were back in focus after data showed Britain's inflation rate rose to a new 40-year high of 10.1 percent in July.

Crude oil : 

yesterday settled up by 1.83% at 6996 after government data showed US crude stockpiles declined by the most in four months. US crude inventories shrank by 7.056 million barrels last week, much more than market expectations of a 0.275-million-barrel decrease. The oil market has been under pressure this week, weighed by concerns that a global economic slowdown could heavily impact energy demand and a potential boost in Iranian supply. The EU said that it was studying Iran’s response to a “final” draft agreement on reviving the 2015 nuclear accord, and a potential deal could unleash about 2.5 million bpd of Iranian crude to the global markets. Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 79,000 barrels per day (bpd) to a record 5.408 million bpd in September, the U.S. Energy Information Administration (EIA) said in its productivity report. Total output in the major U.S. shale oil basins will rise 141,000 bpd to 9.049 million bpd in September, the highest since March 2020, the statistical arm of the Department of Energy projected. In the Bakken in North Dakota and Montana, the EIA forecast oil output will rise 21,000 bpd to 1.157 million bpd in September, the most since November 2021. Technically market is under short covering as market has witnessed drop in open interest by -51.91% to settled at 3655 while prices up 126 rupees, now Crude oil is getting support at 6859 and below same could see a test of 6723 levels, and resistance is now likely to be seen at 7110, a move above could see prices testing 7225.

Trading Ideas:
* Crude oil trading range for the day is 6723-7225.
* Crude oil rose after government data showed US crude stockpiles declined by the most in four months.
* US crude inventories shrank by 7.056 million barrels last week, much more than market expectations of a 0.275-million-barrel decrease.
*Oil output in the Permian in Texas and New Mexico, is due to rise 79,000 barrels per day (bpd) to a record 5.408 million bpd in September

Nat.Gas:

yesterday settled down by -0.07% at 732.6 on forecasts for less hot weather and lower air conditioning demand over the next two weeks than previously expected. That small price decline came despite a drop in daily output, hotter-than-normal weather on the West Coast and in Texas, and near-record global prices. Also preventing U.S. prices from spiking higher, traders noted the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left 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 97.3 bcfd so far in August from a record 96.7 bcfd in July. On a daily basis, however, output was on track to drop from a record 98.3 bcfd on Aug. 8 to a preliminary 15-week low of 94.4 bcfd on Wednesday. Preliminary data is often revised later in the day. With warmer weather expected, Refinitiv projected average U.S. gas demand, including exports, would rise from 95.0 bcfd this week to 96.3 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Tuesday. Technically market is under long liquidation as market has witnessed drop in open interest by -5.97% to settled at 6485 while prices down -0.5 rupees, now Natural gas is getting support at 715.3 and below same could see a test of 698.1 levels, and resistance is now likely to be seen at 758.3, a move above could see prices testing 784.1.

Trading Ideas:
* Natural gas trading range for the day is 698.1-784.1.
* Natural gas dropped on forecasts for less hot weather and lower air conditioning demand over the next two weeks than previously expected.
* That small price decline came despite a drop in daily output, hotter-than-normal weather on the West Coast and in Texas, and near-record global prices.
* Average gas output in the U.S. Lower 48 states rose to 97.3 bcfd so far in August from a record 96.7 bcfd in July.

Copper:

yesterday settled down by -0.82% at 661.2 as price recovery stalled after the worrying economic data from China. Data revealed that the country’s economic growth is stalling. Retail sales, fixed asset investments, and industrial production rose at a slower pace than expected in July. On the macro front, U.S. new housing starts plunged 9.6% in July to an annual rate of 1.446 million after seasonal adjustment, the lowest level since February 2021. The global copper market moved to a surplus of 5,000 tonnes in May, from a deficit of 23,000 tonnes a month earlier, data from the International Copper Study Group (ICSG) showed. Previously, the ICSG had reported a surplus of 3,000 tonnes in April. Copper inventory across major Chinese markets dropped 400 mt from last Friday to 70,300 mt. The total inventory fell by 89,400 mt compared with the same period last year when the inventory was recorded at 159,700 mt. In detail, the inventory in Shanghai fell 2,100 mt to 51,800 mt, the inventory in Guangdong added 800 mt to 8,400 mt, the inventory in Jiangsu increased 800 mt to 5,300 mt, the inventory in Tianjin rose 100 mt to 600 mt, while the inventory in other regions stayed unchanged. Technically market is under long liquidation as market has witnessed drop in open interest by -8.57% to settled at 5150 while prices down -5.5 rupees, now Copper is getting support at 656.3 and below same could see a test of 651.3 levels, and resistance is now likely to be seen at 668.5, a move above could see prices testing 675.7.

Trading Ideas:
* Copper trading range for the day is 651.3-675.7.
* Copper dropped as price recovery stalled after the worrying economic data from China. Data revealed that the country’s economic growth is stalling.
* Retail sales, fixed asset investments, and industrial production rose at a slower pace than expected in July.
* U.S. new housing starts plunged 9.6% in July to an annual rate of 1.446 million, the lowest level since February 2021.
 

Zinc:

 yesterday settled down by -2.1% at 317.4 on profit booking after prices rose prompted by news of European smelter Nyrstar's shutdown. Nyrstar said it would put its zinc smelting operations at Budel in the Netherlands on care and maintenance from Sept. 1. This has stoked further supply fears as the Belgian company had already cut output by up to 50% at its three European zinc smelters, while Glencore said this month "the current energy supply and price environment poses a significant threat". Meanwhile, the latest power controls in China, the world's top metal producer, have also sparked concerns over metals supply. The southwestern Sichuan province ordered industrial users to suspend production from Aug. 15 until Aug. 20 to prioritize residential power supply amid heatwave, disrupting metal production including lithium, aluminium and zinc. The 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. Previously, the ILZSG had reported a surplus of 10,900 tonnes in April. During the first five months of 2022, ILZSG data showed a surplus of 29,000 tonnes versus a surplus of 44,000 tonnes in the same period of 2021. About 13.5 million tonnes of zinc is produced and consumed each year. Technically market is under long liquidation as market has witnessed drop in open interest by -7.82% to settled at 1343 while prices down -6.8 rupees, now Zinc is getting support at 312.1 and below same could see a test of 306.8 levels, and resistance is now likely to be seen at 325.6, a move above could see prices testing 333.8.

Trading Ideas:
* Zinc trading range for the day is 306.8-333.8.
* Zinc dropped on profit booking after prices rose prompted by news of European smelter Nyrstar's shutdown.
* Nyrstar said it would put its zinc smelting operations at Budel in the Netherlands on care and maintenance from Sept. 1.
* Meanwhile, the latest power controls in China, the world's top metal producer, have also sparked concerns over metals supply

Aluminium:

yesterday settled up by 0.69% at 210.65 due to the shortage of electricity caused by the continuous high temperature in Sichuan province, industrial enterprises have been required to cut power use starting from August 15. At present, the enterprises in Sichuan have begun to reduce the operating rates according to local electricity demand. In terms of aluminium production, the current aluminium production in Sichuan has decreased by nearly 400,000 mt, accounting for 33% of the province's total aluminium capacity. The production cuts in Sichuan due to power shortage and other reasons has brought down aluminium production in August, easing the pressure on the supply side. However, domestic downstream consumption is still in the off-season, and downstream factories in Sichuan, Chongqing, Jiangsu and Zhejiang are also facing power rationing and production cuts. China's primary aluminium production rose 5.6% to a record monthly high at 3.43 million tonnes in July from a year earlier, with smelters ramping up production as power restrictions were eased. July's output was up 1.2% from 3.39 million tonnes in the prior month, according to data released by the National Bureau of Statistics. The previous record was 3.42 million tonnes marked in May. Technically market is under short covering as market has witnessed drop in open interest by -16.96% to settled at 3805 while prices up 1.45 rupees, now Aluminium is getting support at 209.5 and below same could see a test of 208.2 levels, and resistance is now likely to be seen at 212, a move above could see prices testing 213.2.

Trading Ideas:
* Aluminium gained due to the shortage of electricity caused by the continuous high temperature in Sichuan province
* The current aluminium production in Sichuan has decreased by nearly 400,000 mt, accounting for 33% of the province's total aluminium capacity
* China July aluminium output hits record high after power restrictions loosened

Mentha oil: 

yesterday settled down by -0.77% at 981.7 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 -1 Rupees to end at 1137.5 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -13.76% to settled at 1310 while prices down -7.6 rupees, now Mentha oil is getting support at 976.1 and below same could see a test of 970.4 levels, and resistance is now likely to be seen at 988.4, a move above could see prices testing 995.

Trading Ideas:
* Mentha oil trading range for the day is 970.4-995.
* In Sambhal spot market, Mentha oil dropped  by -1 Rupees to end at 1137.5 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 :

yesterday settled up by 0.14% at 7378 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 7524.7 Rupees gained 28.75 Rupees.Technically market is under short covering as market has witnessed remain unchanged in open interest by 0% to settled at 14980 while prices up 10 rupees, now Turmeric is getting support at 7330 and below same could see a test of 7282 levels, and resistance is now likely to be seen at 7412, a move above could see prices testing 7446.

Trading Ideas:

* Turmeric trading range for the day is 7282-7446.
*Turmeric 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.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* In Nizamabad, a major spot market in AP, the price ended at 7524.7 Rupees gained 28.75 Rupees

Jeera:

yesterday settled up by 0.48% at 25225 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 312.05 Rupees to end at 24591.5 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -2.18% to settled at 10089 while prices up 120 rupees, now Jeera is getting support at 24970 and below same could see a test of 24715 levels, and resistance is now likely to be seen at 25410, a move above could see prices testing 25595.

Trading Ideas:
Trading Ideas:
* Jeera trading range for the day is 24715-25595.
* Jeera 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 312.05 Rupees to end at 24591.5 Rupees per 100 kg.

Cotton :

yesterday settled up by 0.69% at 49900 after a federal report cut forecasts for global and U.S. production. In its monthly supply-demand report, the United States Department of Agriculture (USDA) cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year. Hot and dry weather conditions in key growing areas in the United States have threatened the condition of the natural fiber crop and raised supply concerns. The USDA's lower global output estimates also reflected a reduction of about 100,000 bales "as extreme heat in Uzbekistan reduced yield prospects there." However, the agency said it expects the lower U.S. production projections to result in a 2 million bale reduction in exports compared with July, and a 200,000 bale dip in mill use. 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 Gujarat Cotton sowing grows by nearly 13% with 2,528,354.00 hectares against sown area of 2021 which was 2,240,765.00 hectares as of now. 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, crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. In spot market, Cotton gained by 360 Rupees to end at 47670 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -5.78% to settled at 1011 while prices up 340 rupees, now Cotton is getting support at 49490 and below same could see a test of 49090 levels, and resistance is now likely to be seen at 50420, a move above could see prices testing 50950.

Trading Ideas:
* Cotton trading range for the day is 49090-50950.
* Cotton rallied after a federal report cut forecasts for global and U.S. production.
* U.S. output forecast cut results in lower exports, mill use view
* Extreme heat in Uzbekistan reduced yield prospects- USDA
* In spot market, Cotton gained  by 360 Rupees to end at 47670 Rupees.

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