IGI Logo

Gold

Gold yesterday settled up by 0.2% at 60628 prompted by a falling dollar after the inflation report for the US surprised on the downside. The headline inflation eased to 5% compared to forecasts of 5.2% and the monthly rate increased 0.1%, half the market expectations. At the same time, core inflation edged higher to 5.6%, but was in line with forecasts. Investors still bet the Fed will deliver another 25bps hike next month but the softer inflation eased some concerns over the need of much more tightening. Meanwhile, Philadelphia Fed Bank President Patrick Harker said Tuesday he feels that the end of rate hikes may be near. Elsewhere, the IMF said it expects global growth of 2.8% this year and 3% in 2024, slightly below the fund’s estimates in January. According to reports from the People’s Bank of China, the size of the national Chinese gold reserve increased by 18 tons in March, reaching 2,068 tons in total. The purchase marks the continuation of a five-month buying spree that the country executed starting in November last year. India’s gold imports, which have a bearing on the current account deficit, fell about 30 per cent to USD 31.8 billion during April-February 2023 due to high customs duty and global economic uncertainties. Technically market is under short covering as the market has witnessed a drop in open interest by -0.69% to settle at 18407 while prices are up 123 rupees, now Gold is getting support at 60302 and below same could see a test of 59976 levels, and resistance is now likely to be seen at 61012, a move above could see prices testing 61396.

Trading Ideas:
* Gold trading range for the day is 59976-61396.
* Gold gains prompted by a falling dollar after the inflation report for the US surprised on the downside.
* The headline inflation eased to 5% compared to forecasts of 5.2% and the monthly rate increased 0.1%
* Investors still bet the Fed will deliver another 25bps hike next month but the softer inflation eased some concerns.

Silver

Silver yesterday settled up by 1.16% at 75913 as US inflation slowed more than markets expected, raising hopes that the Federal Reserve may hasten its eventual dovish pivot. Consumer prices rose by 5% annually in March, below market expectations of a 5.2% increase and considerably below the 6% in the previous month. Along with evidence of a softening job market from last week, the result bolstered bets that the Federal Reserve will start cutting interest rates by the third quarter, lifting demand for non-interest-bearing precious metal investments. Additionally, a report from Ember showed that wind and solar energy represented a record-breaking 12% of electricity generation last year, underscoring strong demand for silver as an industrial input. The European Central Bank is set to keep raising interest rates in the coming months to combat inflation. Last week, ECB member Klaas Knot said it was unclear to him if a rate hike of 50 bps was necessary in May, or if a scale back to a lower 25 bps was a possibility, while chief economist Philip Lane retreated that rates would need to be raised again in May. Traders continued to bet on a 25bps rate hike for next month after the CPI report. Technically market is under short covering as the market has witnessed a drop in open interest by -7.64% to settle at 14020 while prices are up 873 rupees, now Silver is getting support at 75168 and below same could see a test of 74424 levels, and resistance is now likely to be seen at 76638, a move above could see prices testing 77364.

Trading Ideas:
* Silver trading range for the day is 74424-77364.
* Silver surged as US inflation slowed more than markets expected
* Consumer prices rose by 5% annually in March, below market expectations of a 5.2% increase
* India’s silver imports, rose by 66 per cent to USD 5.3 billion during April-February 2023.

Crude oil

Crude oil yesterday settled up by 1.99% at 6815 benefiting from a general dollar weakness following the US inflation report and concerns over tight supplies. US crude oil inventories rose by 0.597 million barrels in the April 7th week, 2023, following two consecutive periods of decline and defying with market consensus of a 0.583 million fall, data from the EIA Petroleum Status Report showed. Gasoline inventories declined by 0.331 million, less than an expected 1.6 million draw. Stocks of crude oil in the US increased by 0.377 million barrels in the week that ended April 7th, 2023, beating the market expectation of a 1.3 million decline and following a 4.3-million-barrel fall in the previous week in the previous week, data from the API's Weekly Statistical Bulletin showed. It was the first week of gain after two straight weeks of decline. OPEC's recent plan to cut oil production by 1.2 million bpd by the end of the year led the U.S. Energy Information Administration (EIA) to raise its oil price forecast for 2023 by 2.5%. The EIA's short-term energy outlook for April showed that the spot price of international benchmark Brent crude oil is expected to average $85 per barrel in 2023, up $3 from its March forecast. Technically market is under short covering as the market has witnessed a drop in open interest by -9.25% to settle at 8253 while prices are up 133 rupees, now Crude oil is getting support at 6707 and below same could see a test of 6599 levels, and resistance is now likely to be seen at 6883, a move above could see prices testing 6951.

Trading Ideas:
* Crude oil trading range for the day is 6599-6951.
* Crude oil gains amid dollar weakness and concerns over tight supplies.
* US crude oil inventories rose by 0.597 million barrels, following two consecutive periods of decline - EIA
* EIA to raise its oil price forecast for 2023 by 2.5%.

Nat.Gas

Nat.Gas yesterday settled down by -3.63% at 172.8 on expectations that milder weather would reduce heating demand and with near-record production for the month keeping pressure on prices. The U.S. Energy Information Administration (EIA) said that U.S. power consumption is expected to slip about 1% in 2023 from the previous year as milder weather slows usage from the record high hit in 2022. Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100.1 billion cubic feet per day (bcfd) so far in April, up from 98.7 bcfd in March. US natural gas production is forecast to hit a record high in 2023, according to a report issued by the EIA. The country's dry gas production will increase to 100.87 billion cubic feet per day (bcfd) in 2023 and 101.58 bcfd in 2024 from a record 98.11 bcfd in 2022, the EIA's April Short-Term Energy Outlook showed. The report also forecast that with inventories remaining above the five-year average in 2023, natural gas prices will average less than $3 per million British thermal units (MMBtu) for 2023, a more than 50 percent drop from last year. The natural gas spot price at Henry Hub averaged $5.45 per MMBtu in November 2022, and declined to an average $2.31 per MMBtu in March, said the report. Technically market is under fresh selling as the market has witnessed a gain in open interest by 12.45% to settle at 46794 while prices are down -6.5 rupees, now Natural gas is getting support at 167.6 and below same could see a test of 162.4 levels, and resistance is now likely to be seen at 181, a move above could see prices testing 189.2.

Trading Ideas:
* Natural gas trading range for the day is 162.4-189.2.
* Natural gas dropped on expectations that milder weather reducing heating demand
* US natural gas production to hit record high in 2023: EIA
* Gas production will increase to 100.87 billion cubic feet per day (bcfd) in 2023 and 101.58 bcfd in 2024 from a record 98.11 bcfd in 2022


Copper

Copper yesterday settled up by 0.96% at 782.5 on supply concerns as inventories in London Metal Exchange (LME) warehouses plunged to 56,800 tonnes, the lowest since 2005. Goldman Sachs emphasised that the copper supply market is still in significant shortage, and global physical inventories have fallen to the lowest level in 14 years. The combination of tight supply and strong demand related to long-term energy transition will drive copper prices upward. Data showed that China' s copper cathode output stood at 951,400 mt in March, up 43,600 mt or 4.8% from the previous month and 12.1% from the same period in 2022. The actual output was 1,900 mt higher than the expected 949,500 mt. The output totalled 2.71 million mt in January-March, an increase of 210,200 mt or 8.4% year on year. Despite the maintenance of three smelters, the actual output in March did not fall as these smelters have restocked sufficient raw materials. Coupled with the production increase of a smelter in central China, the total output in March increased further. In addition, the sufficient domestic supply of blister copper and anode in China drove up the output of many smelters and the production resumption of a smelter in Jiangxi greatly exceeded expectations. Technically market is under short covering as the market has witnessed a drop in open interest by -5.85% to settle at 3397 while prices are up 7.45 rupees, now Copper is getting support at 774 and below same could see a test of 765.5 levels, and resistance is now likely to be seen at 787, a move above could see prices testing 791.5.

Trading Ideas:
* Copper trading range for the day is 765.5-791.5.
* Copper gains on supply concerns
* Inventories in London Metal Exchange (LME) warehouses plunged to 56,800 tonnes, the lowest since 2005.
* The copper supply market is still in significant shortage, and global physical inventories have fallen to the lowest level in 14 years.

Zinc

Zinc yesterday settled up by 0.47% at 247.6 after reports smelter bottleneck was severe enough to generate a global supply shortfall of more than 300,000 tonnes. This year's benchmark treatment charge, the fee a smelter earns for converting mined concentrates into metal, has been set at $274 per tonne, up from $230 in 2022 and $159 in 2021. Mitsui Mining and Smelting Co Ltd plans to produce 107,000 tonnes of refined zinc in the first half of the 2023/24 financial year, down 4.7% from a year earlier, Japan's biggest zinc smelter said. The global zinc market deficit fell to 18,300 tonnes in January from a revised deficit of 80,300 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 100,500 tonnes in December. The deficit of 18,300 tonnes in January compares with a surplus of 15,000 tonnes in the same month last year, ILZSG data showed. Data showed that the domestic refined zinc output increased 55,300 mt or 11.03% MoM and 12.26% YoY to 556,800 mt in March as expected. The output totalled 1.57 million mt from January to March, up 6.62% year-on-year. The production cuts in Yunnan caused by power rationing contributed to most of the decline in output. Technically market is under short covering as the market has witnessed a drop in open interest by -8.35% to settle at 3358 while prices are up 1.15 rupees, now Zinc is getting support at 245.2 and below same could see a test of 242.9 levels, and resistance is now likely to be seen at 248.8, a move above could see prices testing 250.1.

Trading Ideas:
* Zinc trading range for the day is 242.9-250.1.
* Zinc gains after reports of global supply shortfall of more than 300,000 tonnes.
* Japan's Mitsui Mining expects H1 zinc output falling 4.7% y/y
* Data showed that the domestic refined zinc output increased 55,300 mt or 11.03% MoM and 12.26% YoY


Aluminium

Aluminium yesterday settled up by 0.49% at 205.1 as China’s aluminium ingots inventory continues to decline. Support also seen as aluminium capacity in Yunnan that was previously curtailed has not yet resumed production. The dollar index fell, a level not seen since early February, after US inflation for March was softer than many investors were expecting. The headline inflation eased to 5% compared to forecasts of 5.2% and the monthly rate increased 0.1%, half the market expectations. Data shows that China's aluminium output was 3.41 million mt in March (31 days), a year-on-year increase of 2.9%. In March, the daily aluminium output declined 349 mt to 110,000 mt as enterprises in Yunnan still reduced the production and the output increase contributed by the resumption of enterprises in Guizhou and Sichuan was very limited. Aluminium output totalled 9.92 million mt from January to March, up 4.8% year on year. According to statistics, the proportion of domestic aluminium liquid increased 8.3 percentage points month-on-month and 8 percentage points year-on-year to around 71% in March. China's factory activity growth stalled in March, weighed by slowing production and weaker global demand and adding to uncertainty about a post-COVID recovery, a private sector survey showed. Technically market is under short covering as the market has witnessed a drop in open interest by -10.44% to settle at 2950 while prices are up 1 rupees, now Aluminium is getting support at 203.5 and below same could see a test of 201.8 levels, and resistance is now likely to be seen at 206.3, a move above could see prices testing 207.4.

Trading Ideas:
* Aluminium trading range for the day is 201.8-207.4.
* Aluminum gains as China’s aluminium ingots inventory continues to decline.
* Support also seen as aluminium capacity in Yunnan that was previously curtailed has not yet resumed production.
* Data shows that China's aluminium output was 3.41 million mt in March (31 days), a year-on-year increase of 2.9%.

Mentha oil

Mentha oil yesterday settled up by 0.43% at 984.4 on short covering after prices dropped as demand was poor due to recession fears and global banking turmoil. The collapse of California’s Silicon Valley Bank and troubles at Swiss lender Credit Suisse have shaken the financial markets and dampened the outlook for oil consumption. Market participants expect prices to remain under pressure until demand recovers and market sentiment improves. Mentha exports during Apr-Jan 2023, dropped by 13.65 percent to 2,016.77 tonnes as compared to 2,335.63 tonnes exported during Apr-Jan 2022. In January 2023 around 233.21 tonnes of Mentha was exported as against 298.38 tonnes in December 2022 showing a drop of 21.84%. In January 2023 around 233.21 tonnes of Mentha was exported as against 171.07 tonnes in January 2022 showing a rise of 36.32%. 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 -14.3 Rupees to end at 1149.6 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -3.61% to settle at 588 while prices are up 4.2 rupees, now Mentha oil is getting support at 977.6 and below same could see a test of 970.8 levels, and resistance is now likely to be seen at 990.6, a move above could see prices testing 996.8.

Trading Ideas:
* Mentha oil trading range for the day is 970.8-996.8.
* In Sambhal spot market, Mentha oil dropped  by -14.3 Rupees to end at 1149.6 Rupees per 360 kgs.
* Mentha oil gained on short covering after prices dropped as demand was poor due to recession fears and global banking turmoil.
* Mentha exports during Apr-Jan 2023, dropped by 13.65 percent to 2,016.77 tonnes
* In January 2023 around 233.21 tonnes was exported against 298.38 tonnes in December 2022 showing a drop of 21.84%.

Turmeric

Turmeric yesterday settled up by 0.15% at 6826 on short covering as export demand is good amidst lukewarm domestic demand. Turmeric harvesting has started in the key growing regions and farmers and stockists are releasing their stocks, in the fear of further decline in prices. In AP (Nizamabad) Turmeric market around 5,000-7,000 bags are arriving on an average daily basis. In the Erode spot market 400-600 bags are reported on a daily basis, In the Sangli district it is around 3500-7000 bags. Coupled with weak demand in the export and domestic market prices are trading at lower levels (in the current season). Turmeric exports during Apr-Jan 2023, rose by 7.76 percent at 1,36,492.59 tonnes as compared to 1,26,659.01 tonnes exported during Apr-Jan 2022. In January 2023 around 12,484.25 tonnes of turmeric was exported as against 12,039.57 tonnes in December 2022 showing a rise of 3.69%. In January 2023 around 12,484.25 tonnes of turmeric was exported as against 10,558.26 tonnes in January 2022 showing a rise of 18.24%. 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 6770.55 Rupees dropped -50.7 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.2% to settle at 15080 while prices are up 10 rupees, now Turmeric is getting support at 6796 and below same could see a test of 6764 levels, and resistance is now likely to be seen at 6868, a move above could see prices testing 6908.

Trading Ideas:
* Turmeric trading range for the day is 6764-6908.
* Turmeric gained on short covering as export demand is good amidst lukewarm domestic demand
* Farmers and stockists are releasing their stocks, in the fear of further decline in prices
* The crop is good this season despite some projection of a lower crop.
* In Nizamabad, a major spot market in AP, the price ended at 6770.55 Rupees dropped -50.7 Rupees.

Jeera

Jeera yesterday settled up by 3.6% at 41565 as crop worries grow due to unseasonal rains and hailstorms in Rajasthan, the major producing state. The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers. The jeera growing regions in southern and north-western parts of Rajasthan in the districts of Alwar, Jaisalmer, Jaipur, Bikaner, Bhilwara, and Barmer have received a fresh spell of unseasonal rains in the past week, triggering concerns on the crop condition. For the jeera crop, moist or cloudy weather impacts the quality of the seed, which often turns blackish, indicating spoilage. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. One bag holds 55kg. This will result in a demand-supply imbalance. Currently, at least 70% of the crop in Rajasthan and around 30% in Gujarat have yet to be harvested. Because of the rain in both states, the total yield will be reduced. The cumin crop was destroyed by two bouts of unseasonal rainfall during the harvest season. In comparison to the planned arrival of 70 lakh bags, the stock will be reduced to 60-65 lakh bags, with a carry-forward stock of 5 lakh bags from last year. In Unjha, a key spot market in Gujarat, jeera edged down by -541.3 Rupees to end at 40770.85 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.23% to settle at 7923 while prices are up 1445 rupees, now Jeera is getting support at 39970 and below same could see a test of 38380 levels, and resistance is now likely to be seen at 42435, a move above could see prices testing 43310.

Trading Ideas:
* Jeera trading range for the day is 38380-43310.
* Jeera prices reached an all-time high of 41720 on crop worries grow due to unseasonal rains and hailstorms
* The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers.
* Cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags.
*  In Unjha, a key spot market in Gujarat, jeera edged down by -541.3 Rupees to end at 40770.85 Rupees per 100 kg.

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