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Gold 

Gold yesterday settled down by -0.19% at 50225 buoyed by a weaker dollar, as the market toned down chances of a 100-basis-point rate hike by the Federal Reserve next week. British inflation in June accelerated to a 40-year peak, bolstering chances of a half-percentage-point Bank of England rate hike next month. ECB policymakers are also considering a larger-than-expected 50 basis point hike on Thursday. U.S. existing home sales fell for a fifth straight month in June to the lowest level in two years as record-high prices and fast-rising interest rates make buying a home too expensive for a growing share of American households. Sales of previously owned homes fell 5.4% to a seasonally adjusted annual rate of 5.12 million units last month, the lowest level since June 2020 when sales were rebounding from the COVID-19 lockdown slump, the National Association of Realtors said. Sales have now fallen each month since January. Home resales, which account for nearly 90% of U.S. home sales, dropped 14.2% on a year-on-year basis. The median existing house price climbed by 13.4% from a year earlier to an all-time high of $416,000 in June. Sales remained concentrated in the upper-price end of the market amid a paucity of entry-level houses. Technically market is under long liquidation as market has witnessed drop in open interest by -5.73% to settled at 5560 while prices down -95 rupees, now Gold is getting support at 50123 and below same could see a test of 50020 levels, and resistance is now likely to be seen at 50397, a move above could see prices testing 50568.

Trading Ideas:
* Gold trading range for the day is 50020-50568.
* Gold remained in range as the market toned down chances of a 100-basis-point rate hike by the Federal Reserve next week.
* U.S. existing home sales fell for a fifth straight month in June to the lowest level in two years
* Euro on front foot as ECB meeting looms

Silver

Silver yesterday settled down by -0.19% at 55619 as the dollar rebounded, and investors looked ahead to the monetary policy meetings of the European Central Bank and the Bank of Japan. The US central bank is on track to raise interest rates by another 75 basis points next week after pushing back against expectations of a bigger full percentage point increase. Meanwhile, European Central Bank officials are considering a bigger 50 basis point rate hike on Thursday to get ahead of inflation. The euro extended bounce on speculation the European Central Bank may consider raising interest rates by a larger-than-expected 50 basis points on Thursday. Bank of England governor Andrew Bailey also raised the possibility of increasing interest rates by half a percentage point in early August. Worries about gas supplies eased amid indications that Russia's state-owned energy company, Gazprom, will be restarting gas flows via the Nord Stream 1 pipeline on Thursday. On the data front, Germany's producer price inflation eased unexpectedly in June from a record high in May, while U.K. consumer inflation hit a new 40-year high in June on rising motor fuel and food prices, separate reports showed. Technically market is under fresh selling as market has witnessed gain in open interest by 0.94% to settled at 22048 while prices down -108 rupees, now Silver is getting support at 55352 and below same could see a test of 55086 levels, and resistance is now likely to be seen at 56082, a move above could see prices testing 56546.

Trading Ideas:
* Silver trading range for the day is 55086-56546.
* Silver dropped as the dollar rebounded, and investors looked ahead to the monetary policy meetings of ECB and BOJ.
* The European Central Bank may consider raising interest rates by a larger-than-expected 50 basis points on Thursday.
* Italian Prime Minister Mario Draghi said in a speech to the Senate that he was willing to put together a new coalition.

Crude oil 
Crude oil yesterday settled down by -0.58% at 8009 as investors digest inventory reports and looming risks of a demand-sapping global recession. U.S. crude stocks and distillate inventories fell while gasoline inventories rose, the Energy Information Administration said. Crude inventories fell by 446,000 barrels in the week to July 15 to 426.6 million barrels, compared with expectations for a 1.4 million-barrel rise. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.1 million barrels in the last week, EIA said. Refinery crude runs fell by 321,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 1.2 percentage points in the week. U.S. gasoline stocks rose by 3.5 million barrels in the week to 228.4 million barrels, the EIA said, compared with expectations for a 71,000-barrel rise. Stocks of crude oil in the United States rose 1.860 million barrels in the week ended June 15th, 2022, after increasing 4.762 million barrels in the previous week and compared to market expectations of a 0.333 million gain, data from the American Petroleum Institute showed. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -12.49% to settled at 4359 while prices down -47 rupees, now Crude oil is getting support at 7898 and below same could see a test of 7786 levels, and resistance is now likely to be seen at 8099, a move above could see prices testing 8188.

Trading Ideas:
* Crude oil trading range for the day is 7786-8188.
* Crude oil dropped as investors digest inventory reports and looming risks of a demand-sapping global recession.
* U.S. crude stocks dip, gasoline inventories up – EIA
* Oil output in the Permian in Texas and New Mexico, is due to rise 78,000 bpd to a record 5.445 million bpd in August

Natural gas 
Nat.Gas yesterday settled up by 6.6% at 625.2 on forecasts for hotter weather over the next two weeks than previously expected and a decline in output in recent days. Extreme weather has already boosted power demand to record highs in several parts of the country, including Texas, as homes and businesses crank up their air conditioners to escape a brutal heat wave. That price increase came despite a drop in feed gas to liquefied natural gas (LNG) export plants due to upsets at a couple facilities in Louisiana and the ongoing outage at Freeport in Texas, which leaves more fuel in the United States for utilities to refill low storage. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport has said the facility could return around Oct. 22. Some analysts, however, expect the outage to last longer. 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. That compares with a monthly record high of 96.1 bcfd in December 2021. On a daily basis, however, output was on track to drop 2.7 bcfd from a six-month high of 97.3 bcfd on Monday to a preliminary five-week low of 94.6 bcfd on Wednesday. Technically market is under fresh buying as market has witnessed gain in open interest by 17.58% to settled at 6487 while prices up 38.7 rupees, now Natural gas is getting support at 589.4 and below same could see a test of 553.7 levels, and resistance is now likely to be seen at 644.7, a move above could see prices testing 664.3.

Trading Ideas:
* Natural gas trading range for the day is 553.7-664.3.
* Natural gas rose on forecasts for hotter weather over the next two weeks than previously expected and a decline in output in recent days.
* Extreme weather has already boosted power demand to record highs in several parts of the country, including Texas
* That price increase came despite a drop in feed gas to liquefied natural gas (LNG) export plants due to upsets at a couple facilities in Louisiana

Copper

Copper yesterday settled up by 0.55% at 627.6 as the dollar weakened, while easing recession fears boosted investors' appetite for riskier assets. China kept its monthly benchmark lending rates for corporate and household loans unchanged, matching market expectations. Investors now expect a 75-basis-point U.S. interest rate rise next week rather than a 100-basis-point increase that would have been more damaging to economic growth. But European Central Bank policymakers are mulling a bigger-than-expected 50-basis-point rate rise on Thursday. China, the biggest metals consumer, does not face recession but COVID-19 restrictions have curtailed industry and property developers are struggling to stave of default. On the copper supply side, Chilean miner Antofagasta cut its full-year output target to 640,000-660,000 tonnes. China's Premier Li Keqiang said the recovery in the Chinese economy from a recent bout of weakness is not yet firmly established and "painstaking" efforts are needed to stabilise overall economic performance. New U.S. home-building activity fell to a nine-month low in June and permits for new construction projects slipped as well, the latest indication of a cooling housing market as surging mortgage rates reduce affordability. Technically market is under short covering as market has witnessed drop in open interest by -2.49% to settled at 4783 while prices up 3.45 rupees, now Copper is getting support at 623.6 and below same could see a test of 619.4 levels, and resistance is now likely to be seen at 634.7, a move above could see prices testing 641.6.
Trading Ideas:
* Copper trading range for the day is 619.4-641.6.
* Copper rebounded as the dollar weakened, while easing recession fears boosted investors' appetite for riskier assets.
* China kept its monthly benchmark lending rates for corporate and household loans unchanged, matching market expectations.
* Chilean miner Antofagasta cut its full-year output target to 640,000-660,000 tonnes.

Zinc

Zinc yesterday settled up by 1.63% at 276.8 amid easing sentiment after Fed officials said a 100bps rate hike is not the first choice. European Central Bank (ECB) policymakers are considering a 50 basis point rate hike at Thursday's meeting, which is great than expected. The People's Bank of China held steady its key rates for corporate and household loans at July fixing, as it is trying to support ongoing economic recovery in the wake of COVID-19 outbreaks. The one-year loan prime rate (LPR) was left unchanged at 3.7%; while the five-year rate, a reference for mortgages, was maintained at 4.45%. The board last week rolled over a maturing one-year medium-term lending facility (MLF) at an unchanged rate of 2.85% for the sixth straight month. The total zinc ingot social inventory across seven major markets in China stood at 153,700 mt as of July 18, down 400 mt from July 15 and 3,400 mt from July 11. The domestic inventory fell sharply. In Shanghai, the transactions remained sluggish despite of the falling zinc prices. The downstream purchase interests were poor due to expanding backwardation between SHFE front-month and next-month contracts and rising spot premiums, hence the inventory dropped only slightly over the weekend. Technically market is under short covering as market has witnessed drop in open interest by -5.98% to settled at 1133 while prices up 4.45 rupees, now Zinc is getting support at 273.4 and below same could see a test of 270.1 levels, and resistance is now likely to be seen at 279.7, a move above could see prices testing 282.7.

Trading Ideas:
* Zinc trading range for the day is 270.1-282.7.
* Zinc gains amid easing sentiment after Fed officials said a 100bps rate hike is not the first choice.
* PBoC held steady its key rates for corporate and household loans at July fixing, as it is trying to support ongoing economic recovery.
* The total zinc ingot social inventory across seven major markets in China stood at 153,700 mt down 400 mt from July 15

Aluminium

Aluminium yesterday settled up by 0.89% at 209.45 as the social inventory of aluminium ingots continued to decrease as some downstream producers continued to restock. Global primary aluminium output in June rose 1.95% year on year to 5.65 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.33 million tonnes in June, the IAI data showed. According to customs data, in June 2022, the total imports of primary aluminium imports stood at 28,500 mt, down 23.6% month-on-month and down 82% year-on-year; primary aluminium exports totalled 6,623 mt, down 89.8% MoM and up 8,746.9% YoY. Domestic primary aluminium recorded a net import volume of 21,900 mt in June, and 20,500 mt from January to June, down 97.2% YoY. In June, China imported 124,600 mt of aluminium scrap in June, up 220.3% YoY and 23.67% MoM. The combined imports in January-June totalled 630,400 mt, up 55% YoY. According to the latest customs data, China imported 124,600 mt of aluminium scrap in June 2022, an increase of 220.3% year-on-year and 23.67% month-on-month. From January to June 2022, the cumulative import was 630,400 mt, a year-on-year increase of 55%. Technically market is under short covering as market has witnessed drop in open interest by -16.57% to settled at 1984 while prices up 1.85 rupees, now Aluminium is getting support at 208 and below same could see a test of 206.4 levels, and resistance is now likely to be seen at 211.7, a move above could see prices testing 213.8.

Trading Ideas:
* Aluminium trading range for the day is 206.4-213.8.
* Aluminium gains as the social inventory of aluminium ingots continued to decrease
* Global aluminium output rises 1.95% y/y to 5.65 mln T in June – IAI
* In June 2022, the total imports of primary aluminium imports stood at 28,500 mt, down 23.6% month-on-month and down 82% year-on-year

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Mentha oil 
Mentha oil yesterday settled up by 0.21% at 1011.3 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 16.9 Rupees to end at 1122.5 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -9.04% to settled at 835 while prices up 2.1 rupees, now Mentha oil is getting support at 1007.2 and below same could see a test of 1003.1 levels, and resistance is now likely to be seen at 1015.2, a move above could see prices testing 1019.1.

Trading Ideas:
* Mentha oil trading range for the day is 1003.1-1019.1.
* In Sambhal spot market, Mentha oil gained  by 16.9 Rupees to end at 1122.5 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 1.32% at 7818 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 -1.28% to settled at 16190 while prices up 102 rupees, now Turmeric is getting support at 7750 and below same could see a test of 7684 levels, and resistance is now likely to be seen at 7876, a move above could see prices testing 7936.

Trading Ideas:
* Turmeric trading range for the day is 7684-7936.
* 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 down by -0.42% at 23595 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 270.35 Rupees to end at 23312.35 Rupees per 100 kg.Technically market is under fresh selling as market has witnessed gain in open interest by 1.8% to settled at 12579 while prices down -100 rupees, now Jeera is getting support at 23490 and below same could see a test of 23380 levels, and resistance is now likely to be seen at 23745, a move above could see prices testing 23890.

Trading Ideas:
* Jeera trading range for the day is 23380-23890.
* 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 270.35 Rupees to end at 23312.35 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.35% at 43300 as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. According to government sources, if rains continue to hit the State for the next few days more crop is likely to get damaged. However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares. Looking at the current trend, cotton sowing in Maharashtra is expected to cross 4.2 million hectares. In Gujarat, it would be around 2.7 million hectares. The cotton acreage in north will be around 1.5 million hectares and the same for southern states is likely to remain at around 3.5-4.0 million hectare. Reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed. In Punjab, area under cotton cultivation dips to lowest since 2010, also Cotton crop in Punjab is on radar for second straight year as attack of whitefly, pink bollworm seen, as per the report. China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. In spot market, Cotton gained by 110 Rupees to end at 41290 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -7.76% to settled at 1070 while prices up 150 rupees, now Cotton is getting support at 42940 and below same could see a test of 42570 levels, and resistance is now likely to be seen at 43540, a move above could see prices testing 43770.

Trading Ideas:
* Cotton trading range for the day is 42570-43770.
* 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 12 million hectares.
* The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month.
* In spot market, Cotton gained  by 110 Rupees to end at 41290 Rupees.

- www.kediaadvisory.com

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