IGI Logo

Gold

Gold yesterday settled down by -0.37% at 50905 as investors look to minutes from the U.S. Federal Reserve's September policy meeting and inflation data for clues on its rate hike path. Federal Reserve Bank of Cleveland President Loretta Mester said the central bank had yet to get surging inflation under control and would need to press forward with tightening monetary policy. Investors are also bracing for key US inflation print on Thursday, which could add to bets for a fourth 75 bps rate hike by the Fed in November. The Bank of England confirmed its programme of temporary gilt purchases ends on Friday. Earlier, Financial Times reported that the central bank has signalled privately to bankers that it could extend its emergency bond-buying programme defying Governor Bailey yesterday's remarks that the programme will end this week. Meanwhile, fresh data showed the British economy contracted in August while industrial production shrank more than expected. The sterling has been under heavy selling pressure amid persistent concerns about the country's economic outlook and a new tax cut plan announced last month. High inflation and doubts about whether the BoE will be able to protect the economy and control inflation also weighed, at a time the Fed continues with its hawkish stance, sending the dollar higher. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.78% to settle at 16211 while prices are down -191 rupees, now Gold is getting support at 50761 and below same could see a test of 50618 levels, and resistance is now likely to be seen at 51048, a move above could see prices testing 51192.

Trading Ideas:
* Gold trading range for the day is 50618-51192.
* Gold dropped as investors look to minutes from the U.S. Federal Reserve's September policy meeting and inflation data for clues
* Fed Mester reiterated the need to press forward with tightening monetary policy to get surging inflation under control.
* Investors are also bracing for key US inflation print on Thursday, which could add to bets for a fourth 75 bps rate hike by the Fed in November
 

Silver

Silver yesterday settled down by -2.07% at 57325 tracking the downturn in US Treasury notes as bets of an increasingly hawkish Federal Reserve continue to hurt demand of non-interest-baring bullion investments. Hopes that the US central bank could ease the pace of incoming rate hikes were erased after the jobs report for September was stronger than expected, followed by remarks from Fed policymakers stressing the need to bring inflation down. ECB board members also continued to flag the necessity of restrictive borrowing costs, stating that inflation is currently underestimated by markets and could persist until 2025. Further insights on the progress of the fight against unsustainable price growth will come with September’s US CPI report later this week. Chicago Fed president Charles Evans said there is a strong consensus at the Federal Reserve to raise the target policy rate to around 4.5 percent by February and hold it there for most of 2023. Separately, Fed Vice Chair Lael Brainard laid out a case for exercising caution, saying that previous rate increases were starting to slow the economy and the full brunt of tighter policy would not be felt for months to come. Technically market is under fresh selling as the market has witnessed a gain in open interest by 18.07% to settle at 18798 while prices are down -1210 rupees, now Silver is getting support at 56948 and below same could see a test of 56570 levels, and resistance is now likely to be seen at 57912, a move above could see prices testing 58498.

Trading Ideas:
* Silver trading range for the day is 56570-58498.
* Silver prices fell as bets of an increasingly hawkish Federal Reserve continue to hurt demand.
* Fed’s Evans said there is a strong consensus at Fed to raise the target policy rate to around 4.5 percent by February and hold it there for most of 2023
* Fed’s Brainard laid out a case for exercising caution, saying that previous rate increases were starting to slow the economy
 

Crude oil

Crude oil yesterday settled down by -2.35% at 7194 as OPEC cut its 2022 forecast for growth in world oil demand for a fourth time since April and also trimmed next year's figure, citing slowing economies, the resurgence of China's COVID-19 containment measures and high inflation. Oil demand will increase by 2.64 million barrels per day (bpd) or 2.7% in 2022, the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report, down 460,000 bpd from the previous forecast. The lower demand outlook gives additional context for last week's move by OPEC and its allies, known as OPEC+, to make their largest cut in output since 2020 to support the market. "The world economy has entered into a time of heightened uncertainty and rising challenges, amid ongoing high inflation levels, monetary tightening by major central banks, high sovereign debt levels in many regions as well as ongoing supply issues," OPEC said in the report. Next year, OPEC expects oil demand to rise by 2.34 million bpd, 360,000 bpd lower than previously forecast. A Western embargo on oil purchases is expected to lead to a temporary decline in oil output in Russia, the RIA news agency quoted Deputy Finance Minister Alexei Sazanov as saying. He said the reduction in 2023 would be about 5%, RIA reported. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.57% to settle at 5917 while prices are down -173 rupees, now Crude oil is getting support at 7066 and below same could see a test of 6938 levels, and resistance is now likely to be seen at 7371, a move above could see prices testing 7548.

Trading Ideas:
* Crude oil trading range for the day is 6938-7548.
* Crude oil dropped as OPEC cuts 2022, 2023 oil demand growth view as economy slows
* Oil demand will increase by 2.64 mbpd or 2.7% in 2022, down 460,000 bpd from the previous forecast.
* The cartel also trimmed its 2023 forecast by 360,000 bpd to 102.02 million bpd.

 

Nat.Gas

Nat.Gas yesterday settled down by -2.16% at 534.1 on record output and reduced liquefied natural gas (LNG) exports that should allow utilities to keep injecting more gas into storage than usual in coming weeks. That price drop came despite forecasts for colder weather and higher heating demand over the next two weeks than previously expected. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100.1 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 92.5 bcfd this week to 98.3 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Tuesday. The average amount of gas flowing to U.S. LNG export plants fell to 10.9 bcfd so far in October from 11.5 bcfd in September. U.S. natural gas storage is expected to end the April-October injection season at 3.437 trillion cubic feet (tcf) on Oct. 31, the lowest since 2018. That compares with 3.644 tcf at the end of the summer injection season in 2021 and a five-year (2017-2021) average of 3.678 tcf. There was 3.236 tcf of gas in storage at the end of October 2018, a 13-year low. Technically market is under fresh selling as the market has witnessed a gain in open interest by 20.23% to settle at 9064 while prices are down -11.8 rupees, now Natural gas is getting support at 523.3 and below same could see a test of 512.4 levels, and resistance is now likely to be seen at 553.3, a move above could see prices testing 572.4.

Trading Ideas:
* Natural gas trading range for the day is 512.4-572.4.
* Natural gas fell on record output and reduced LNG exports
* That price drop came despite forecasts for colder weather and higher heating demand over the next two weeks than previously expected.
* U.S. natural gas storage is expected to end the April-October injection season at 3.437 trillion cubic feet (tcf) on Oct. 31, the lowest since 2018

Copper

Copper yesterday settled down by -0.59% at 652.2 pressured by mounting risks of a global recession and resurgent Covid-19 outbreaks in top metals consumer China. The IMF downgraded its 2023 growth forecast for the global economy, citing high inflation, tighter financial conditions, Russia’s invasion of Ukraine and the lingering Covid-19 pandemic. In China, major cities have intensified anti-virus measures as authorities try to arrest an outbreak ahead of a Communist Party congress starting on Oct. 16. Beijing and its neighboring regions also carried out environmental inspections on factories, keeping a lid on local metals prices. A strong dollar continued to weigh on copper prices as well amid expectations that the US Federal Reserve will continue to aggressively raise interest rates. The copper spot premium in top consumer China could stay elevated in the next few months, as demand for the metal has improved on the back of government stimulus. Peru's copper production fell 1.5% year-on-year in August, the second consecutive monthly drop, due largely to lower activity from several mines controlled by Freeport-McMoRan Corp and Grupo Mexico. Chile, the world's top copper producer, saw exports of the red metal reach $3.34 billion in September, down 23.2% from a year earlier, the central bank said. Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.24% to settle at 5247 while prices are down -3.9 rupees, now Copper is getting support at 647.8 and below same could see a test of 643.4 levels, and resistance is now likely to be seen at 657.8, a move above could see prices testing 663.4.

Trading Ideas:
* Copper trading range for the day is 643.4-663.4.
* Copper dropped pressured by growth, China concerns
* IMF downgraded its 2023 growth forecast for the global economy, citing high inflation, tighter financial conditions, and the lingering Covid-19 pandemic.
* A strong dollar continued to weigh on copper prices as well amid expectations that the US Federal Reserve will continue to aggressively raise interest rates.

Zinc

Zinc yesterday settled up by 0.17% at 271.8 on short covering tracking rise in aluminum prices after reports that the United States was considering a ban on Russian aluminum. COVID-19 flare-ups in China, the world's biggest metal consumer, sparked fresh concerns over demand, while firmer U.S. dollar also added pressure on greenback-priced metals. Shanghai and other big Chinese cities, including Shenzhen, have ramped up testing for COVID-19 as infections rise, with some local authorities hastily closing schools, entertainment venues and tourist spots. The preventive steps come days ahead of a Communist Party congress starting on Oct. 16 where Xi Jinping is expected to extend his leadership. The International Monetary Fund expected China's economic growth to contract to 3.2% this year from an 8.1% expansion in 2021, as a result of its strict COVID-19 lockdowns and its worsening property market crisis. Concerns over top consumer China's economy will also keep the metal under pressure until the government eases its strict COVID-19 restrictions. Glencore said it would place its Nordenham smelter in Germany on care and maintenance from Nov. 1, and the LME restricted new deliveries from a Russian mining company. Foreign exchange reserves in China declined by $26 billion to $3.029 trillion in September of 2022, the lowest since March of 2017 and compared to market forecasts of $3 trillion. Technically market is under short covering as the market has witnessed a drop in open interest by -0.77% to settle at 2055 while prices are up 0.45 rupees, now Zinc is getting support at 268.1 and below same could see a test of 264.5 levels, and resistance is now likely to be seen at 274.7, a move above could see prices testing 277.7.

Trading Ideas:
* Zinc trading range for the day is 264.5-277.7.
* Zinc prices gains on short covering tracking rise in aluminum prices
* The International Monetary Fund expected China's economic growth to contract to 3.2% this year from an 8.1% expansion in 2021
* Glencore said it would place its Nordenham smelter in Germany on care and maintenance from Nov. 1

Aluminium

Aluminium yesterday settled up by 4.19% at 207.7 after reports that the Biden administration is considering putting in place a complete ban on Russian aluminium in response to Russia's military escalation in Ukraine. The IMF lowered global economic growth expectations again. China's social financing scale added 3.53 trillion yuan in September, 624.5 billion yuan more than a year earlier; RMB loans rose 2.47 trillion yuan, 810.8 billion yuan more than a year earlier. The data showed that domestic policies to stabilise growth continued to exert power, and valid demand for credit from the corporate and residential sectors continued to pick up, improving the atmosphere in the futures market. Japanese buyers have agreed to price aluminum arriving in Japan in the fourth quarter at a premium of $99/mt over the LME cash price. This is down 33% from the premiums in Q3. Japan's quarterly aluminum premium has fallen for the fourth consecutive quarter, underscoring weak demand and ample inventories. Premiums for aluminium arriving in Japan in the third quarter of this year were set at $148/mt. The quarterly premium paid by Japanese buyers for aluminum fell below $100/mt for the first time in the fourth quarter of 2020, and was also below the initial $115-133/mt offer by overseas aluminum suppliers. Technically market is under fresh buying as the market has witnessed a gain in open interest by 12.19% to settle at 3948 while prices are up 8.35 rupees, now Aluminium is getting support at 198.9 and below same could see a test of 190.1 levels, and resistance is now likely to be seen at 213.9, a move above could see prices testing 220.1.

Trading Ideas:
* Aluminium trading range for the day is 190.1-220.1.
* Aluminium prices rallied after reports US considering a total ban on Russian aluminium
* China's social financing scale added 3.53 trillion yuan in September, 624.5 billion yuan more than a year earlier
* Japanese buyers have agreed to price aluminum arriving in Japan in the fourth quarter at a premium of $99/mt over the LME cash price

Mentha oil

Mentha oil yesterday settled down by -0.28% at 980.6 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 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, 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. Mentha exports during Apr-Aug 2022 has dropped by 14.27 percent at 886.53 tonnes as compared to 1034.14 tonnes exported during Apr-Aug 2021. In the month of August 2022 around 238.04 tonnes Mentha was exported as against 155.04 tonnes in July 2022 showing a rise of 53.53%. In the month of August 2022 around 238.04 tonnes of Mentha was exported as against 227.27 tonnes in August 2021 showing a rose of 4.74%. In Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil dropped by -14.7 Rupees to end at 1126.7 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.7% to settle at 1329 while prices are down -2.8 rupees, now Mentha oil is getting support at 975.8 and below same could see a test of 970.9 levels, and resistance is now likely to be seen at 985.3, a move above could see prices testing 989.9.

Trading Ideas:
* Mentha oil trading range for the day is 970.9-989.9.
* In Sambhal spot market, Mentha oil dropped  by -14.7 Rupees to end at 1126.7 Rupees per 360 kgs.
* Mentha oil dropped as Synthetic Mentha supply remains uninterrupted.
* However, downside seen limited amid low production this season and improving demand post-pandemic.
* In the month of July 2022 around 155.04 tonnes Mentha was exported as against 113.33 tonnes in June 2022 showing a rise of 36.80.

Turmeric

Turmeric yesterday settled remain unchangeby 0% at 7294 amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Arrivals has been dropped by 26% Y-o-Y due to lower production as about 11248 tonnes of turmeric arrived at APMC mandies across India in Sep’22 compared to 15758 tonnes of previous year for corresponding month. As per estimates, Turmeric all India sowing area for 2022 is estimated at 1.70 lakh hectares as compared to last year 1.66 lakh hectares, up by 2.44%. In Maharashtra, sowing area likely to go up as Turmeric spot prices were higher during the time of sowing compared to last year same period. Turmeric exports during Apr-August 2022 has rose by 15.35 percent at 74,393.62 tonnes as compared to 64,493.34 tonnes exported during Apr- August 2021. In the month of August 2022 around 12,147.89 tonnes turmeric was exported as against 12,810.36 tonnes in July 2022 showing a drop of 5.17%. In the month of August 2022 around 12,147.89 tonnes of turmeric was exported as against 11,617.90 tonnes in August 2021 showing a rise of 4.56%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. The Spices Board has pegged turmeric production at 1.33 mln tn, up 18.4% on year. In Nizamabad, a major spot market in AP, the price ended at 7125.45 Rupees gained 22.75 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.57% to settle at 9855 while prices are remain unchanged 0 rupees, now Turmeric is getting support at 7236 and below same could see a test of 7176 levels, and resistance is now likely to be seen at 7352, a move above could see prices testing 7408.

Trading Ideas:
* Turmeric trading range for the day is 7176-7408.
* Turmeric settled flat amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region.
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In the month of July 2022 around 12,810.36 tonnes turmeric was exported as against 18,532.00 tonnes in June 2022 showing a drop of 30.87%.
* In Nizamabad, a major spot market in AP, the price ended at 7125.45 Rupees gained 22.75 Rupees.

Jeera

Jeera yesterday settled down by -0.37% at 24315 on profit booking after prices rose 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. Jeera exports during Apr-August 2022 has dropped by 26.44 percent at 91,505.49 tonnes as compared to 1,24,390.31 tonnes exported during Apr- August 2021. In the month of August 2022 around 24,448.33 tonnes jeera was exported as against 19,866.18 tonnes in July 2022 showing a rise of 18.74%. In the month of August 2022 around 24,448.33 tonnes of jeera was exported as against 17,460.60 tonnes in August 2021 showing a rise of 40.02%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. Jeera production was seen at 725,651 tn, down 8.8% on year due to lower acreage in Rajasthan and Gujarat, the key producer, according to data from Spices Board India. According to fourth advanced estimates by Gujarat government, jeera production is seen fall by 44.5 per cent to 221500 tonnes in 2021-22 on yoy basis In Unjha, a key spot market in Gujarat, jeera edged down by -138.85 Rupees to end at 24138.05 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 10.69% to settle at 5496 while prices are down -90 rupees, now Jeera is getting support at 24180 and below same could see a test of 24040 levels, and resistance is now likely to be seen at 24445, a move above could see prices testing 24570.

Trading Ideas:
* Jeera trading range for the day is 24040-24570.
* Jeera dropped on profit booking after prices seen supported as supply was 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 down by -138.85 Rupees to end at 24138.05 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -3.89% at 32900 as worries of an imminent recession dampened demand for the natural fiber crop. However downside seen limited as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions. Cotton output is expected to rebound from last years’ experience of unseasonal rain affecting the crop. Production this year is seen at 341.9 lakh bales (170 kg) against 312.03 lakh bales last year. Pakistan’s cotton production has shrunk 19% to 2.19 million bales till September 15, 2022 in the current season mainly due to the devastation caused by heavy rainfall and flash floods nationwide. In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg. Ginning mills have started buying seed cotton with the advent of the auspicious festival of Navratri. However, spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival. In its monthly supply-demand report, the 2022/23 U.S. cotton projections include higher beginning stocks, production, exports and ending stocks this month, the USDA's report said. Additionally, the 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. In spot market, Cotton dropped by -360 Rupees to end at 34300 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.61% to settle at 608 while prices are down -1330 rupees, now Cotton is getting support at 32180 and below same could see a test of 31470 levels, and resistance is now likely to be seen at 34290, a move above could see prices testing 35690.

Trading Ideas:
* Cotton trading range for the day is 31470-35690.
* Cotton dropped as worries of an imminent recession dampened demand for the natural fiber crop.
* However downside seen limited as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions.
* Spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival.
* In spot market, Cotton dropped  by -360 Rupees to end at 34300 Rupees.

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