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Gold

Gold yesterday settled down by -0.07% at 48119 after various studies indicated that the latest wave of the pandemic will be less economically damaging than previous ones. Some pressure seen from higher levels amid cautious optimism that Omicron is less severe than Delta is supporting risk assets. Vaccine makers AstraZeneca and Novavax Inc said their shots protected against Omicron. New U.K. data suggested it may cause proportionally fewer hospital cases than the Delta variant. The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021. But price pressures continued to build up, with a measure of underlying inflation recording its largest annual increase since the 1980s in November. Physical gold demand was mixed in top Asian hubs, with overall activity subdued going into Christmas and the new year, although the upcoming holidays prompted some consumers in Singapore to pick up bullion for gifting. In India, dealers were offering a discount of up to $2 an ounce over official domestic prices unchanged from the last week. In top consumer China, premiums of $6-$9 an ounce were charged, unchanged from last week. Technically market is under long liquidation as market has witnessed drop in open interest by -0.18% to settled at 8748 while prices down -33 rupees, now Gold is getting support at 48035 and below same could see a test of 47952 levels, and resistance is now likely to be seen at 48232, a move above could see prices testing 48346.

Trading Ideas:

* Gold trading range for the day is 47952-48346.
* Gold prices remained in range after various studies indicated that the latest wave of the pandemic will be less economically damaging than previous ones.
* Some pressure seen from higher levels amid cautious optimism that Omicron is less severe than Delta is supporting risk assets
* US consumer confidence improved again in December

Silver

Silver yesterday settled down by -0.02% at 62298 as investor confidence grew on signs that omicron might be less severe than feared. Early studies suggested it carries a lower risk of hospitalization and causes a milder illness. Reports also showed that US drugmakers Merck and Pfizer’s Covid antiviral pills were effective against the new variant. Moreover, expectations that inflation is likely to persist buoyed gold prices, with the Fed-preferred PCE index surging to 5.7% in November, its fastest pace since 1982. New orders for US manufactured durable goods rose 2.5% over the same period, faster than forecasts of 1.6%, and initial jobless claims were steady at 205 thousand last week, still below pre-pandemic levels, reflecting businesses’ resilience amid increasing headwinds from disruptions caused by the pandemic. Also, the Core PCE price index, the Fed’s preferred inflation gauge, rose 4.7% yoy in November, 0.2pp above market forecasts, a level that should keep the pressure on policymakers to control rising prices. Elsewhere, studies suggest that the omicron variant poses a reduced risk of hospitalization and severe diseases in infected people, easing concerns about rising cases. The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021. Technically market is under long liquidation as market has witnessed drop in open interest by -1.13% to settled at 10642 while prices down -13 rupees, now Silver is getting support at 62194 and below same could see a test of 62091 levels, and resistance is now likely to be seen at 62420, a move above could see prices testing 62543.

Trading Ideas:

* Silver trading range for the day is 62091-62543.
* Silver traded in range as investor confidence grew on signs that omicron might be less severe than feared.
* Early studies suggested it carries a lower risk of hospitalization and causes a milder illness.
* New orders for US manufactured durable goods rose 2.5% over the same period

Crude oil

Crude oil yesterday settled down by -0.14% at 5528 as markets eye the next step by producer group OPEC+ and the impact of the Omicron variant. The U.S. Energy Department awarded a second batch of crude oil from the strategic reserve to Marathon Petroleum Corp. as part of the Biden administration's effort to lower energy costs. Russian Deputy Prime Minister Alexander Novak said he expected relatively high gas prices next year, the Interfax news agency said. Europe relies on Russia for about 35% of its natural gas, the price of which has soared to all-time highs on the spot market this winter. Russia believes oil prices are unlikely to change significantly next year with demand recovering to pre-pandemic levels only by the end of 2022, Deputy Prime Minister Alexander Novak said. Novak told state television Russia planned to produce 540-550 million tonnes of oil next year. China's crude oil output in 2021 is expected to total around 199 million tonnes, or about 3.98 million barrels per day, clocking a third straight annual rise, the National Energy Administration (NEA) said. The country's natural gas production is set to increase to around 206 billion cubic metres this year, including 23 billion cubic metres of shale gas, the NEA said in a statement released after its 2022 energy work conference, which did not provide output targets for next year. Technically market is under long liquidation as market has witnessed drop in open interest by -0.26% to settled at 7301 while prices down -8 rupees, now Crude oil is getting support at 5498 and below same could see a test of 5468 levels, and resistance is now likely to be seen at 5564, a move above could see prices testing 5600.

Trading Ideas:

* Crude oil trading range for the day is 5468-5600.
* Crude oil dropped as markets eye the next step by producer group OPEC+ and the impact of the Omicron variant.
* Russia's Novak expects high gas prices in 2022
* Russia's Novak: oil prices unlikely to change much in 2022

Nat.Gas

Nat.Gas yesterday settled down by -0.43% at 281 weighed down by forecasts for milder weather and lower heating demand than previously expected and smaller-than-usual storage withdrawal last week. The U.S. Energy Information Administration (EIA) said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 17. Refinitiv estimated 400 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, down from the 409 HDDs estimated on Wednesday. The normal is 429 HDDs for this time of year. HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day's average temperature is below 65 Fahrenheit (18 Celsius). Refinitiv projected average U.S. gas demand, including exports, would fall from 125.3 billion cubic feet per day this week to 115.3 bcfd next week. Two German natural gas importers assured Gazprom was meeting its contractual obligations, while contracted supply limits for this year had already been reached. Earlier this week, prices had rallied to all-time highs bolstered by a combination of freezing temperatures and lower power output from alternative sources, which added to previous concerns about delays in the Nord Stream 2 pipeline approval and rising tensions in eastern Europe. Technically market is under long liquidation as market has witnessed drop in open interest by -11.46% to settled at 2997 while prices down -1.2 rupees, now Natural gas is getting support at 276.1 and below same could see a test of 271.3 levels, and resistance is now likely to be seen at 285.9, a move above could see prices testing 290.9.

Trading Ideas:

* Natural gas trading range for the day is 271.3-290.9.
* Natural gas fell weighed down by forecasts for milder weather and lower heating demand than previously expected and smaller-than-usual storage withdrawal.
* EIA said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 17.
* Gazprom’s customers in Europe had requested less gas and more US LNG tankers were crossing the Atlantic towards the continent.

Copper

Copper yesterday settled up by 0.57% at 747.95 as fears that the omicron variant would derail economic growth receded and President Biden said the US will not go back to lockdown. In China, the copper inventory in the bonded zone dropped 2,200 mt to 171,700 mt from last Friday, marking the 11th consecutive week of decline. A South African study confirmed again the omicron variant is less severe than previous strains, albeit more infectious. Higher supplies and softer demand are expected to cool copper prices next year after a dizzying climb to record highs this year, but the metal's central role in the energy transition will keep sentiment positive. Expectations of slower demand growth in China and rising supplies from operations such as Anglo American's Quellaveco mine in Peru are likely to keep prices subdued next year. The macro front conveyed considerable bullish news today. The US consumer confidence index for December rose; the annualised US GDP growth in the third quarter was revised to 2.3% according to US Department of Commerce, slightly better than estimate; the second-hand house sales for the third consecutive month in November; a study carried out by the Imperial Engineering, London showed that the hospitalisation risks of omicron COVID variant were 40-50% lower than that of Delta, all of which supported copper prices. Technically market is under fresh buying as market has witnessed gain in open interest by 19.11% to settled at 3734 while prices up 4.25 rupees, now Copper is getting support at 742.4 and below same could see a test of 736.7 levels, and resistance is now likely to be seen at 751.4, a move above could see prices testing 754.7.

Trading Ideas:

* Copper trading range for the day is 736.7-754.7.
* Copper prices rose as fears that the omicron variant would derail economic growth receded and President Biden said the US will not go back to lockdown.
* However, the spreading COVID variants kept the market participants on edge, and they were again worrying the progress of economic recovery.
* In China, the copper inventory in the bonded zone dropped 2,200 mt to 171,700 mt from last Friday, marking the 11th consecutive week of decline.

Zinc

Zinc yesterday settled up by 0.16% at 289.25 as surging energy prices raise concerns of higher production costs and smelter shutdowns. Prices also drew support in recent sessions from revived risk appetite across markets as investors hope the Omicron coronavirus variant will have less economic impact than feared. Overall sentiment was upbeat, with a global share rally continuing as markets welcomed positive news about the impact of the Omicron variant and U.S. economic data. On the demand side, the downstream companies were even more sluggish in demand during the seasonal low, coupled with rising zinc prices, which is a bearish factor for zinc. The global zinc market deficit declined to 6,100 tonnes in October from a downwardly revised shortfall of 38,400 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 44,000 tonnes in September. During the first 10 months of 2021, ILZSG data showed a deficit of 93,000 tonnes versus a surplus of 476,000 tonnes in the same period of 2020. Around 13.5 million tonnes of zinc is produced and consumed each year. Technically market is under fresh buying as market has witnessed gain in open interest by 20.36% to settled at 1850 while prices up 0.45 rupees, now Zinc is getting support at 287.1 and below same could see a test of 285 levels, and resistance is now likely to be seen at 291.1, a move above could see prices testing 293.

Trading Ideas:

* Zinc trading range for the day is 285-293.
* Zinc gained as surging energy prices raise concerns of higher production costs and smelter shutdowns.
* Investors hope the Omicron coronavirus variant will have less economic impact than feared.
* Global zinc market deficit narrows to 6,100 T in Oct – ILZSG
 

Nickel

Nickel yesterday settled up by 0.14% at 1547.8 as prices drew support from revived risk appetite across markets as investors hope the Omicron coronavirus variant will have less economic impact than feared. Nickel inventories in LME warehouses fell 58% from April to 110,358 tonnes, their lowest since December 2019. Also, inventories in ShFE warehouses were at 5,563 tonnes last week, hovering near a record low of 4,455 tonnes hit in August. The global nickel market saw a small surplus of 5,000 tonnes in October compared with a shortfall of 3,100 tonnes a month earlier, data from the International Nickel Study Group (INSG) showed. During the first 10 months of the year, there was a deficit in the nickel market of 165,500 tonnes compared with a surplus of 88,500 tonnes in the same period last year, Lisbon-based INSG added. The number of Americans filing new claims for unemployment benefits remained unchanged from last week’s upwardly revised level at 205 thousand in the week that ended December 18th, in line with market expectations and remaining below pre-pandemic levels. Personal income in the United States increased 0.4 percent from a month earlier in November 2021, following a 0.5 percent growth in October and matching market expectations as most companies increased wages to attract and keep workers and in spite of waning federal stimulus. Technically market is under fresh buying as market has witnessed gain in open interest by 8.44% to settled at 1491 while prices up 2.2 rupees, now Nickel is getting support at 1541.3 and below same could see a test of 1534.8 levels, and resistance is now likely to be seen at 1554, a move above could see prices testing 1560.2.

Trading Ideas:

* Nickel trading range for the day is 1534.8-1560.2.
* Nickel gains as prices drew support from revived risk appetite across markets as investors hope the Omicron coronavirus variant will have less economic impact.
* Nickel inventories in LME warehouses fell 58% from April to 110,358 tonnes, their lowest since December 2019.
* Inventories in ShFE warehouses were at 5,563 tonnes last week, hovering near a record low of 4,455 tonnes hit in August.

Aluminium

Aluminium yesterday settled down by -0.22% at 227.6 on profit booking sapped by thin holiday trade and concerns about weaker physical demand. Non-ferrous production such as aluminum in Europe is again under pressure as electricity prices roared back to record levels. Also, latest data showed China's output of alumina, which is smelted to make aluminum, fell in November by 4.5% year-on-year to its lowest in 18 months as regions impose curbs on the aluminum raw material. Still, the price of aluminum remains about 10% below its 13-year high of $3,172 reached in mid-October, as supply disruptions connected to higher energy prices in China eased and aluminum ingot inventories have been falling at a slower pace as cargoes pile up at railway stations in Xinjiang and the major Chinese manufacturing province of Zhejiang is fighting a Covid-19 outbreak. On-warrant aluminium stocks in LME-registered warehouses have fallen from 861,600 tonnes on Dec. 14 to 731,500 tonnes, suggesting tight supply. A unit of Indonesian coal company PT Adaro Energy said it plans to build a $728 million aluminium smelter on Borneo island. Two vaccine makers said their shots protect against Omicron and UK data suggested it may cause proportionally fewer hospitalisations than the Delta variant. Europe's largest aluminium smelter, in Dunkerque, France, had halted 3% of its production capacity. Technically market is under long liquidation as market has witnessed drop in open interest by -5.92% to settled at 2783 while prices down -0.5 rupees, now Aluminium is getting support at 226.2 and below same could see a test of 224.7 levels, and resistance is now likely to be seen at 229.2, a move above could see prices testing 230.7.

Trading Ideas:

* Aluminium trading range for the day is 224.7-230.7.
* Aluminium prices dropped on profit booking sapped by thin holiday trade and concerns about weaker physical demand.
* Aluminum production in Europe is again under pressure as electricity prices roared back to record levels.
* Data showed China's output of alumina, fell in November by 4.5% year-on-year to its lowest in 18 months
 

Mentha oil

Mentha oil yesterday settled down by -0.22% at 983.2 as demand from consumer side is extremely weak and industrial demand is also not picking up. Prices got support in last few weeks as due to crop failure and low recovery of oil, availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Major physical market player expects demand to sluggish for next few week as cash crunch seen in spot market, while expectations are high about demand improvement ahead of winter season starts. China is one of the biggest buyer for Indian Mentha, no much buying inquiry from China as mainland China and Hong Kong markets were shut. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Firstly damages due to rain in key area and secondly farmers for the last 2 years where sowing mentha but due to not getting much profit at intervals there had been shift to other crops also. In Sambhal spot market, Mentha oil dropped by -20.9 Rupees to end at 1092.5 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 52.88% to settled at 824 while prices down -2.2 rupees, now Mentha oil is getting support at 979.9 and below same could see a test of 976.5 levels, and resistance is now likely to be seen at 986.8, a move above could see prices testing 990.3.

Trading Ideas:

* Mentha oil trading range for the day is 976.5-990.3.
* In Sambhal spot market, Mentha oil dropped  by -20.9 Rupees to end at 1092.5 Rupees per 360 kgs.
* Mentha oil prices dropped as demand from consumer side is extremely weak
* Availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season.
*  Further production this year will be lower as compare with last year because of two important factors.
 

Turmeric

Turmeric yesterday settled down by -0.75% at 8984 as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric. However, downside seen limited due to heavy rainfall, the minimum crop damage has gone to 40% to 50% in producing parts of Maharashtra, Telangana and Andhra. Support also as the demand from exporters is good. Spices Board has set a target of 33 per cent increase in turmeric exports to 183000 tonnes on a year-on-year basis in the financial year 2020-21. At the same time, the government estimates that turmeric production may be 1.11 million tonnes in 2020-21, which was 1.15 million tonnes a year ago. Turmeric all India production for 2022 is estimated at 4.89 lakh MT. Last year’s production was 4.46 lakh MT, up by 9.64% from last year. Exports of spices from India during Apr-Sep declined 8% on year to 780,273 tn, according to data from the Spices Board India. In terms of value, exports rose 3% to 154.6 bln rupees. Exports of jeera during Apr-Sep declined 14% on year to 139,295 tn, from 162,033 tn a year ago. There were also reports of export demand from Europe, Gulf countries and Bangladesh. The areas where turmeric has been sown have received adequate rainfall and are expected to produce well in the next season. In Nizamabad, a major spot market in AP, the price ended at 8090.5 Rupees dropped -9.5 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.25% to settled at 6100 while prices down -68 rupees, now Turmeric is getting support at 8908 and below same could see a test of 8832 levels, and resistance is now likely to be seen at 9080, a move above could see prices testing 9176.

Trading Ideas:

* Turmeric trading range for the day is 8832-9176.
* Turmeric dropped as pressure seen amid poor demand for old stocks as traders wait for the new season of turmeric.
* However, downside seen limited due to heavy rainfall, the minimum crop damage has gone to 40% to 50%.
* At the same time, the government estimates that turmeric production may be 1.11 million tonnes in 2020-21, which was 1.15 million tonnes a year ago.
* In Nizamabad, a major spot market in AP, the price ended at 8090.5 Rupees dropped -9.5 Rupees.

Jeera

Jeera yesterday settled down by -0.31% at 16195 as cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September but are expected to improve in the coming months. Further adequate stock with traders and farmers may keeping prices under pressure at higher levels. However downside seen limited as domestic demand is now picking up also the export inquiries to support price. The area under cumin in Gujarat is only 1.71 lakh hectares as against 3 lakh hectares in the same period last year, while in Rajasthan, cumin was sown in 3.20 lakh hectares. Jeera production in Syria and Turkey was limited due to bad weather, which increases demand for Indian cumin. Exports of spices from India during Apr-Sep declined 8% on year to 780,273 tn, according to data from the Spices Board India. In terms of value, exports rose 3% to 154.6 bln rupees. India exported 77,245 tn of turmeric in Apr-Sep, down 26% on year. During last two months, the prices were higher compared to last year despite sufficient stocks with traders. Sowing can see drop as farmers preferred to have other crop against Jeera. Weather in key sowing area will be crucial in next few months. The export of cumin is increasing continuously and in the coming days there are signs of increasing the export of cumin in a big way. In Unjha, a key spot market in Gujarat, jeera edged down by -96.05 Rupees to end at 16111.1 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -3.35% to settled at 7878 while prices down -50 rupees, now Jeera is getting support at 16080 and below same could see a test of 15965 levels, and resistance is now likely to be seen at 16310, a move above could see prices testing 16425.

Trading Ideas:

* Jeera trading range for the day is 15965-16425.
* Jeera dropped as cumin exports declined by 1.4% year-on-year to 1.39 lakh tonnes in April-September.
* Further adequate stock with traders and farmers may keeping prices under pressure at higher levels.
* However downside seen limited as domestic demand is now picking up also the export inquiries to support price.
* In Unjha, a key spot market in Gujarat, jeera edged down by -96.05 Rupees to end at 16111.1 Rupees per 100 kg.
 

Cotton

Cotton yesterday settled up by 0.92% at 32960 on expectations of lower demand for garments due to the resurgence of new Omicron coronavirus variant, higher supply, and as higher prices are hurting demand for supplies from top shipper US. Further, demand is muted in top producer India as fabrics manufacturers were hesitant for new purchases due to the proposed hike in taxes from January 1. Meanwhile, the USDA in its December report estimated 2021/22 global production to drop by 200,000 bales as a 1.0 million bale drop in Pakistan more than offsets gains in Benin, Turkey, Uzbekistan, and Cameroon. Also, world cotton ending stocks were projected 1.2 million bales lower due to lower beginning stocks, smaller production and slightly higher consumption. Mali's cotton harvest for the 2021/22 season is expected to be 731,000 tonnes, 10% below an earlier forecast due to insufficient rain in some areas and localised floods elsewhere, data from the cotton producers' association showed. In March, the government forecast that cotton production would rebound this season to 810,000 tonnes after plunging nearly 80% in 2020/21 to 147,200 tonnes because the pandemic upended demand and farmers went on strike. In spot market, Cotton gained by 70 Rupees to end at 32190 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 18.6% to settled at 5419 while prices up 300 rupees, now Cotton is getting support at 32620 and below same could see a test of 32270 levels, and resistance is now likely to be seen at 33150, a move above could see prices testing 33330.

Trading Ideas:

* Cotton trading range for the day is 32270-33330.
* Cotton dropped on expectations of lower demand for garments due to the resurgence of new Omicron coronavirus variant, higher supply
* Demand is muted as fabrics manufacturers were hesitant for new purchases due to the proposed hike in taxes from January 1.
* The USDA in its December report estimated 2021/22 global production to drop by 200,000 bales
* In spot market, Cotton gained  by 70 Rupees to end at 32190 Rupees.

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