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Gold

Gold yesterday settled up by 0.14% at 59471 but pared gains hurt by a stronger dollar and a rebound in bond yields as investors digested Fitch's U.S. credit rating downgrade and focused on nonfarm payrolls data later this week. Data showed U.S. private payrolls increased more than expected in July, pointing to continued labor market resilience that could shield the economy from a recession. The Federal Reserve raised interest rates by 25 basis points last month. According to the CME's FedWatch Tool, the probability that the Fed would leave rates unchanged at the September meeting was at 83%. India's gold demand in 2023 could fall 10% from a year ago to their lowest in three years, as record high prices are dampening retail purchases, the World Gold Council (WGC) said. The lower purchases in the world's second-biggest gold consumer could limit a rally in global prices. Falling demand for gold imports could also help to narrow Indian gold consumption in the April-June quarter fell 7% to 158.1 metric tons, as both jewellery and investment demand dropped. Global gold demand fell 2% year-on-year to 920.7 metric tons in the second quarter of 2023 as central banks slowed their purchases and consumption by the technology sector remained soft, the World Gold Council (WGC) said. Technically market is under short covering as the market has witnessed a drop in open interest by -0.61% to settle at 14922 while prices are up 83 rupees, now Gold is getting support at 59279 and below same could see a test of 59086 levels, and resistance is now likely to be seen at 59738, a move above could see prices testing 60004.
Trading Ideas:
* Gold trading range for the day is 59086-60004.
* Gold pared gains hurt by a stronger dollar and a rebound in bond yields
* Dollar hits more than three-week peak
* Fitch downgrades US credit rating to AA+ from AAA

Silver

Silver yesterday settled down by -1.33% at 72960 as dollar index extended gains to 102.4, after a surprise move from Fitch prompted a risk-off mood in the markets while fresh economic data continued to point to a strong labour market in the US. Fitch downgraded the US sovereign credit grade to AA+ from AAA, citing the expected fiscal deterioration over the next three years and a high and growing general government debt burden, while predicting a mild recession in Q4 2023 and Q1 2024. Following the move, Treasury Secretary Yellen noted that Treasuries remain “the world’s preeminent safe and liquid asset”. Also, the Treasury Department said it plans to incrementally increase the size of its auctions. Meanwhile, the ADP report showed that 324 thousand private-sector jobs were added to the US economy in July, magnifying evidence of a strong labor market after the JOLTS pointed to strong job openings and jobless claims sank to multi-month lows. The results magnified the US’s resilience to higher interest rates, spurring some bets of another rate hike this year. The Federal Reserve raised interest rates by 25 basis points last month. According to the CME's FedWatch Tool, the probability that the Fed would leave rates unchanged at the September meeting was at 83%. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.18% to settle at 15471 while prices are down -983 rupees, now Silver is getting support at 72157 and below same could see a test of 71353 levels, and resistance is now likely to be seen at 74292, a move above could see prices testing 75623.
Trading Ideas:
* Silver trading range for the day is 71353-75623.
* Silver dropped as dollar index extended gains to 102.4.
* Fitch downgraded the US sovereign credit grade to AA+ from AAA, citing the expected fiscal deterioration over the next three years
* The ADP report showed private businesses in the US added 324K jobs in July, way above forecasts of 189K.
 

Crude oil

Crude oil yesterday settled down by -2.54% at 6556 eased amid concerns about the Chinese economy but downside seen limited as crude and fuel product inventory data showed robust U.S. demand. Stocks of crude oil in the US increased by 1.319 million barrels in the week that ended July 28th, 2023, marking the biggest weekly draw at least since 2012, following 1.319 million barrels increase in the previous week, while the market expected a 0.9 million fall, data from the API's Weekly Statistical Bulletin showed. US crude oil inventories went down by 17.049 million barrels in the last week of July 2023, the biggest drawn since records began in 1982, and way more than market expectations of a 1.367 million fall. Also, crude stocks at the Cushing, Oklahoma, delivery hub declined by 1.259 million barrels while gasoline stocks rose by 1.48 million barrels, compared to forecasts of a 1.3 million-barrel draw. Crude oil inventories have also begun to drop in other regions as demand outpaces supply, which has been constrained by deep production cuts from Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC). Concerns have risen that oil buying in China, the world's biggest oil importer, may slow as prices rise. Technically market is under long liquidation as the market has witnessed a drop in open interest by -40.34% to settle at 7248 while prices are down -171 rupees, now Crude oil is getting support at 6474 and below same could see a test of 6391 levels, and resistance is now likely to be seen at 6712, a move above could see prices testing 6867.
Trading Ideas:
* Crude oil trading range for the day is 6391-6867.
* Crude oil prices eased amid concerns about the Chinese economy
* US crude oil inventories went down by 17.049 million barrels - EIA
* Crude stocks at the Cushing, Oklahoma, delivery hub declined by 1.259 million barrels

Natural Gas

Nat.Gas yesterday settled down by -3.2% at 205.5 weighed down by forecasts for lower demand over the next two weeks than previously expected and rising output. The price drop came despite forecasts for hotter than normal weather continuing through mid-August, especially in Texas. Refinitiv said average gas output in the Lower 48 states rose to 101.7 bcfd in July, up from 101.0 bcfd in June but just shy of the 101.8-bcfd monthly record set in May due to pipeline maintenance earlier in the month. On a daily basis, however, output was on track to drop by 1.6 bcfd to a preliminary more than one-week low of 100.4 bcfd on Wednesday. Meteorologists forecast the weather in the Lower 48 states will remain mostly hotter than normal through at least Aug. 16. With more hot weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise slightly from 104.9 bcfd this week to 105 bcfd next week as power generators burn more of the fuel to meet rising air conditioning demand. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants rose to an average of 12.7 bcfd in July, up from 11.6 bcfd in June. Technically market is under fresh selling as the market has witnessed a gain in open interest by 13.55% to settle at 50407 while prices are down -6.8 rupees, now Natural gas is getting support at 202.2 and below same could see a test of 198.8 levels, and resistance is now likely to be seen at 211.2, a move above could see prices testing 216.8.
Trading Ideas:
* Natural gas trading range for the day is 198.8-216.8.
* Natural gas dropped weighed down by forecasts for lower demand.
* The price drop came despite forecasts for hotter than normal weather continuing through mid-August, especially in Texas.
* Average gas output in the Lower 48 states rose to 101.7 bcfd in July, up from 101.0 bcfd in June

Copper

Copper yesterday settled down by -0.99% at 737.1 as weak data from China weighed on the demand outlook for metals, though they raised hope for a government stimulus into sectors, which partly boosted copper to a in the previous session. Also weighing on the market have been rising stocks in LME-registered warehouses. After arrivals of 5,825 metric tons, total copper stocks rose to 74,175 metric tons and on-warrant inventories reached a two-month high of 73,725, daily LME data showed. Yangshan copper premium, which indicates the demand interest to import copper into China, fell to $29 per metric ton, the lowest since May 18. In the first half of 2023, China's imports of refined copper reached a four-year low, highlighting the perception of stagnation in the world's manufacturing superpower. The nation is the top consumer of refined copper in the world, and its decline in import demand has crushed hopes for a quick recovery from the severe COVID-19 limitations imposed last year. Like markets for many other industrial metals, the copper market is currently waiting for additional government stimulus in the hopes that an increase in domestic demand will make up for the absence of robust export markets. Technically market is under fresh selling as the market has witnessed a gain in open interest by 8.74% to settle at 5137 while prices are down -7.35 rupees, now Copper is getting support at 733.6 and below same could see a test of 730.1 levels, and resistance is now likely to be seen at 742.6, a move above could see prices testing 748.1.
Trading Ideas:
* Copper trading range for the day is 730.1-748.1.
* Copper dropped as weak data from China weighed on the demand outlook.
* Chinese imports of less refined copper are increasing, though.
* Yangshan copper premium, fell to $29 per metric ton, the lowest since May 18.


Zinc

Zinc yesterday settled down by -1.87% at 222.45 as weak manufacturing data and a struggling property sector in top consumer China soured sentiment. The dollar strengthened after a survey from the Federal Reserve showed U.S. banks reported tighter credit standards and weaker loan demand during the second quarter, a sign rising interest rates are having an impact on the economy. Looking ahead, S&P Global predicts a modest 1.4% growth in global refined zinc demand for 2023, as both the US and Europe continue to grapple with inflation and tight monetary policies. Simultaneously, global refined zinc supply is expected to increase by 1.9%, considering a low base year and as energy costs in Europe ease, while power curbs in China limit zinc smelter production. The global zinc market surplus slipped to 53,000 metric tons in May, down from 64,000 tons a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. During the first five months of 2023, ILZSG data showed a surplus of 267,000 metric tons, versus a surplus of 189,000 tons in the same period of 2022. London Metal Exchange (LME) stocks of zinc have risen above 90,000 metric tons for the first time since May of 2022 thanks to a surge of deliveries into Singapore. Technically market is under long liquidation as the market has witnessed a drop in open interest by -14% to settle at 3698 while prices are down -4.25 rupees, now Zinc is getting support at 220.5 and below same could see a test of 218.6 levels, and resistance is now likely to be seen at 225.3, a move above could see prices testing 228.2.
Trading Ideas:
* Zinc trading range for the day is 218.6-228.2.
* Zinc dropped amid weak China manufacturing and lack of stimulus measures
* Pledges from the Chinese authorities to boost the country's troubled property sector.
* Global zinc market surplus falls to 53,000 metric tons in May – ILZSG


Aluminium

Aluminium yesterday settled down by -1.31% at 199.95 as smelters in Yunnan have gradually resumed their production due to the eased power curtailment, which will certainly bring pressure on the aluminum price. Earlier this year, reduced hydropower capacity in Yunnan restricted power consumption, resulting in aluminum production cut locally, thereby supporting the aluminum price. There will be a supply deficit of 191,750 tons in the global aluminum market this year, and the figure will drop to 66,000 tons in 2024 due to higher production in Yunnan province. Global factory activity remained in a slump in July, private surveys showed, a sign slowing growth and weakness in China were taking a toll on the world economy, though the picture in the Americas was notably less bleak than elsewhere. The downturn highlighted the dilemma for policymakers who embarked on aggressive monetary policy tightening cycles in a battle to keep inflation at bay and yet also need to try and forestall potential recessions. S&P Global's gauge of worldwide manufacturing activity held steady at 48.7 in July, matching the lowest level since June 2020, with subindices of factory output and new orders both slipping to six-month lows. Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.13% to settle at 3486 while prices are down -2.65 rupees, now Aluminium is getting support at 198.9 and below same could see a test of 197.7 levels, and resistance is now likely to be seen at 202, a move above could see prices testing 203.9.
Trading Ideas:
* Aluminium trading range for the day is 197.7-203.9.
* Aluminium dropped as smelters in Yunnan have gradually resumed production
* Global factory activity remained in a slump in July
* There will be a supply deficit of 191,750 tons in the global aluminum market this year


Mentha oil

Mentha oil yesterday settled flat at 873.8 amid rise in supplies of new crop. Supplies have increased in Uttar Pradesh and Bihar as harvesting activities has picked up. Production prospects have improved with rising yield supported by favorable weather condition. Moreover, reports of slack export of menthol will put pressure on prices. Rising menthol imports, as well as China's limited purchasing, will put pressure on pricing. Mentha exports during Apr-May 2023, dropped by 51.60 percent to 183.98 tonnes as compared to 380.12 tonnes exported during Apr-May 2022. In May 2023 around 86.13 tonnes of Mentha was exported as against 97.85 tonnes in April 2023 showing a drop of 13.60%. In May 2023 around 86.13 tonnes of Mentha was exported as against 209.90 tonnes in May 2022 showing a drop of 58.96%. 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. In Sambhal spot market, Mentha oil dropped by -9.2 Rupees to end at 1014.4 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.32% to settle at 933 while prices are remain unchanged 0 rupees, now Mentha oil is getting support at 871 and below same could see a test of 868.1 levels, and resistance is now likely to be seen at 877.6, a move above could see prices testing 881.3.
Trading Ideas:
* Mentha oil trading range for the day is 868.1-881.3.
* In Sambhal spot market, Mentha oil dropped  by -9.2 Rupees to end at 1014.4 Rupees per 360 kgs.
* Menthaoil settled flat amid rise in supplies of new crop.
* Supplies have increased in Uttar Pradesh and Bihar as harvesting activities has picked up.
* Production prospects have improved with rising yield supported by favorable weather condition.

Turmeric

Turmeric yesterday settled up by 3.03% at 15554 driven by consistent demand from the domestic market and export. Moreover, farmers and stockists are holding onto their stocks in anticipation of price increases due to lower sowing acreage and also lower ending stocks, resulting in a supply shortage in the cash markets. The kharif sowing acreage is expected to decrease during the current season. In Maharashtra, the sowing area is projected to decline by 10%-20%. Similarly, in Tamil Nadu, the acreage is expected to decrease by 10%-15%. In Andhra Pradesh and Telangana, there is an anticipated decline of 18%-22% in the acreage compared to the previous season. Support also seen as the untimely rains that occurred in various places in the Andhra Pradesh damaged turmeric crops causing huge loss to the farmers. Turmeric exports during Apr-May 2023, rose by 27.55 percent at 39,418.73 tonnes as compared to 30,903.38 tonnes exported during Apr-May 2022. In May 2023 around 19,827.86 tonnes of turmeric was exported as against 19,590.87 tonnes in April 2023 showing a rise of 1.21%. In May 2023 around 19,827.86 tonnes of turmeric was exported as against 17,138.35 tonnes in May 2022 showing a rise of 15.69%. In Nizamabad, a major spot market in AP, the price ended at 13771.05 Rupees gained 314.55 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -7.05% to settle at while prices are up 458 rupees, now Turmeric is getting support at 15030 and below same could see a test of 14508 levels, and resistance is now likely to be seen at 15932, a move above could see prices testing 16312.
Trading Ideas:
* Turmeric trading range for the day is 14508-16312.
* Turmeric gains supported by fall in area and slower sowing progress.
* Farmers and stockists are holding onto their stocks in anticipation of price increases due to lower sowing acreage
* In May 2023 around 19,827.86 tonnes of turmeric was exported as against 19,590.87 tonnes in April 2023 showing a rise of 1.21%.
* In Nizamabad, a major spot market in AP, the price ended at 13771.05 Rupees gained 314.55 Rupees.


Jeera

Jeera yesterday settled up by 3.65% at 61870 as arrivals in Gujarat and Rajasthan have decreased due to heavy rainfall. Farmers need assistance to bring their produce to the market. However, after the rains subside, cumin arrivals are expected to increase, potentially impacting market dynamics. Support also seen due to good export demand and expectations of lower stocks end of the current marketing year. Prices rose on crop worries grow due to unseasonal rains and hailstorms in Rajasthan, the major producing state. Cumin imports in May 2023 reached 210 metric tons, showing a substantial increase of 227.73% compared to the previous month's import volume of 64 metric tons. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. Jeera exports during Apr-May 2023, rose by 67.90 percent at 42,988.50 tonnes as compared to 25,603.35 tonnes exported during Apr-May 2022. In May 2023 around 25,903.63 tonnes of jeera was exported as against 17,084.87 tonnes in April 2023 showing a rise of 51.52%. In May 2023 around 25,903.63 tonnes of jeera was exported as against 14,894.62 tonnes in May 2022 showing a rise of 73.91%. In Unjha, a key spot market in Gujarat, jeera edged up by 1313.65 Rupees to end at 61400.6 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -8.03% to settle at while prices are up 2180 rupees, now Jeera is getting support at 59980 and below same could see a test of 58090 levels, and resistance is now likely to be seen at 63480, a move above could see prices testing 65090.
Trading Ideas:
* Jeera trading range for the day is 58090-65090.
* Jeera prices rose as arrivals decreased
* Traders are avoiding bulk buying in anticipation of rise in seasonal supply of jeera in Gujarat and Rajasthan.
* The market is expecting a lower yield and quality of jeera this season
* In Unjha, a key spot market in Gujarat, jeera edged up by 1313.65 Rupees to end at 61400.6 Rupees per 100 kg.

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