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Gold

Gold yesterday settled down by -0.2% at 54911 after Federal Reserve Chair Jerome Powell signaled that interest rates would likely remain higher for longer than previously expected. Powell said in his testimony before the Senate Banking Committee that the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly. Indian retail demand for gold improved in February 2023 supported by a three per cent fall in local prices and wedding purchases, said World Gold Council (WGC) in a report. Improved market sentiment bumped local prices back into premium during the third week of February for the first time since November 2022, the WGC said. The average discount narrowed to $4/oz from $29/oz in January 2023. Central banks show continued demand for gold in 2023, as per a recent report from the World Gold Council (WGC), which noted that the world’s central banks accumulated 31 tons of the precious metal in January. Turkey was the largest gold buyer, adding 23 tons to its central bank’s stash, while the People’s Bank of China also purchased 15 tons of gold. The Fed's next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating a 70.5 percent chance of 50 basis point rate increase. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.15% to settle at 9754 while prices are down -111 rupees, now Gold is getting support at 54804 and below same could see a test of 54696 levels, and resistance is now likely to be seen at 55066, a move above could see prices testing 55220.

Trading Ideas:
* Gold trading range for the day is 54696-55220.
* Gold dropped after Fed Chair Powell signaled that interest rates would likely remain higher for longer than previously expected.
* Powell said that the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.
* Gold demand in India in February improved: WGC

Silver

Silver yesterday settled down by -0.63% at 61817 as investors assessed the pace of future rate hikes by the Federal Reserve. The latest ADP and JOLTs Job figures report showed a still-tight US labor market, underpinning convictions that the Federal Reserve's monetary policy tightening may be far from over. U.S. private payrolls increased more than expected in February, pointing to continued labor market strength. Private employment increased by 242,000 jobs last month, the ADP National Employment report showed. Data for January was revised higher to show 119,000 jobs added instead of 106,000 as previously reported. Federal Reserve Chair Jerome Powell told that the U.S. central bank would likely need to raise interest rates more than expected and opened the door to a half-point rate hike this month to combat inflation, following a recent raft of strong economic data. Job growth was robust in January, with the unemployment rate falling to more than a 53-1/2-year low of 3.4%. The number of job openings in the United States decreased by 410,000 to 10.824 million in January 2023 from an upwardly revised 11.234 million in December, still above market expectations of 10.5 million. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.34% to settle at 18118 while prices are down -389 rupees, now Silver is getting support at 61522 and below same could see a test of 61226 levels, and resistance is now likely to be seen at 62178, a move above could see prices testing 62538.

Trading Ideas:
* Silver trading range for the day is 61226-62538.
* Silver dropped as investors assessed the pace of future rate hikes by the Federal Reserve.
* Fed's Powell: I stress that no decision has been made on the pace of rate hikes.
* U.S. private payrolls increased more than expected in February, pointing to continued labor market strength.

Crude oil

Crude oil yesterday settled down by -1.62% at 6305 on concerns that aggressive rate hikes may dent demand for fuel in the U.S. The downside remained capped after industry data showed an unexpected draw in U.S. crude oil inventories. OPEC Secretary-General Haitham Al-Ghais said that slowing oil consumption in Europe and the US could threaten the market. Barclays cut its 2023 oil price forecasts, due in part to more resilient output from Russia than expected, and said the market could flip into a deficit in the second half of the year due to growing demand in China. The bank cut its average forecasts for the Brent and West Texas Intermediate (WTI) benchmarks by $6 per barrel (/b) and $7/b, respectively, to $92/b and $87/b. It also forecast Brent would average $97/b next year and WTI $92/b. Stocks of crude oil in the United States fell by 3.835 million barrels in the week ended March 3rd, 2023, following a 6.203 million barrels gain in the previous week, data from the American Petroleum Institute showed. It was the first decline in crude oil inventories since the week ended February 3rd, 2023, and the biggest drop in crude oil inventories since the week ended December 2nd, 2022, while the market expected a 0.308 million barrels fall. Technically market is under fresh selling as the market has witnessed a gain in open interest by 72.27% to settle at 10467 while prices are down -104 rupees, now Crude oil is getting support at 6239 and below same could see a test of 6173 levels, and resistance is now likely to be seen at 6388, a move above could see prices testing 6471.

Trading Ideas:
* Crude oil trading range for the day is 6173-6471.
* Crude oil dropped on concerns that aggressive rate hikes may dent demand for fuel in the U.S.
* The downside remained capped after industry data showed an unexpected draw in U.S. crude oil inventories.
* Barclays cuts 2023 oil price forecasts on resilient Russian output


Natural Gas

Nat.Gas yesterday settled down by -3.3% at 211 after data showed the amount of gas flowing to Freeport LNG's export plant in Texas had dropped and forecasts indicated the weather in the near term would be warmer than previously expected. The amount of natural gas flowing to U.S. liquefied natural gas (LNG) company Freeport LNG's export plant in Texas was on track to drop after the plant exited an eight-month outage in February. Gas flows to Freeport LNG were on track to reach just 0.1 billion cubic feet per day (bcfd) on Wednesday, down from around 1.0 bcfd on Tuesday, according to Refinitiv Eikon data. Average gas output in the U.S. Lower 48 states has risen to 98.4 bcfd so far in March, up from 98.2 bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022. The latest forecasts show the weather in the Lower 48 states would remain mostly colder than normal through March 23 after some near- to warmer-than-normal days from March 8-13. With colder weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 115.5 bcfd this week to 119.2 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Tuesday. Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.91% to settle at 31567 while prices are down -7.2 rupees, now Natural gas is getting support at 206 and below same could see a test of 201.1 levels, and resistance is now likely to be seen at 218.9, a move above could see prices testing 226.9.

Trading Ideas:
* Natural gas trading range for the day is 201.1-226.9.
* Natural gas dropped as US natgas flows drop to Freeport LNG export plant in Texas
* Pressure also seen as forecasts indicated the weather in the near term would be warmer than previously expected.
* The market has been extremely volatile in recent weeks as traders bet on the latest weather forecasts.


Copper

Copper yesterday settled up by 1.09% at 753.05 as demand for copper, is expected to pick up amid a recovery in manufacturing activities in China. China is poised to export a significant volume of copper in coming weeks, a relatively infrequent occurrence that underscores a tepid demand recovery in the biggest market. At least four major smelters are planning to deliver between 23,000 and 45,000 tons of refined copper in total to London Metal Exchange depots in Asia. Data released by the Chilean National Copper Commission (Cochilco) showed that Chile's copper production in January was 437,900 mt, a year-on-year increase of 2.9%. Peru's mines are starting to transport their copper concentrate to ports for export once again after three months of protests that have snarled shipments, Energy and Mines Minister Oscar Vera said. The minister told that he had held meetings with firms, adding that shipments from mines like MMG Ltd's Las Bambas, which produces some 2% of the world's copper, were expected to reach Peru's coast in the coming days. China's unwrought copper imports in the first two months of 2023 fell 9.3% from a year earlier, customs data showed, as higher global prices lowered buying appetite. Technically market is under short covering as the market has witnessed a drop in open interest by -11.91% to settle at 4639 while prices are up 8.1 rupees, now Copper is getting support at 744.2 and below same could see a test of 735.2 levels, and resistance is now likely to be seen at 760.5, a move above could see prices testing 767.8.

Trading Ideas:
* Copper trading range for the day is 735.2-767.8.
* Copper gains as demand for copper, is expected to pick up amid a recovery in manufacturing activities in China.
* China copper exports to jump in rare deliveries to LME depots
* Chile's copper production in January was 437,900 mt, a year-on-year increase of 2.9%.

Zinc

Zinc yesterday settled up by 0.42% at 263.45 as power cuts in Yunnan have led to a larger production reduction at local smelters. Last week, companies that cut their production were Yunnan Yuntong Zinc, Chihong Zinc & Germanium (Huize county, Qujing city) and Luoping Zinc and Electricity. Enterprises that are going to carry out maintenance in March are Mengzi Mining and Metallurgy, Huludao Zinc Industry and Gansu Baohui. In addition, there are rumours that recycling companies have significantly reduced their production. According to recent research, the recycling companies in Hunan generally maintain stable but low capacity utilisation rates amid the high electricity prices. The global zinc market deficit rose to 100,500 tonnes in December from a revised deficit of 66,900 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 119,500 tonnes in November. During the whole of 2022, ILZSG data showed a deficit of 306,000 tonnes versus a deficit of 204,000 tonnes in 2021. Fed Chair Jerome Powell said the U.S. central bank is likely to increase interest rates more than previously anticipated to tame inflation. Sales of new and second-hand commercial housing in China ended 13 months of falls in January and February, the minister of housing said. Technically market is under short covering as the market has witnessed a drop in open interest by -4.36% to settle at 3206 while prices are up 1.1 rupees, now Zinc is getting support at 260.2 and below same could see a test of 257 levels, and resistance is now likely to be seen at 265.5, a move above could see prices testing 267.6.

Trading Ideas:
* Zinc trading range for the day is 257-267.6.
* Zinc prices gains support from production rationing in Yunnan
* There are rumours that recycling companies have significantly reduced their production.
* Global zinc market deficit climbs to 100,500 T in December – ILZSG


Aluminium

Aluminium yesterday settled up by 0.1% at 206.85 on low level buying after prices dropped amid stronger dollar and completed production cuts in China's major producing provinces. Yunnan smelters were said to have satisfied the necessary output cuts to comply with power rationing requirements. Pressure also seen after hawkish comments from U.S. Federal Reserve Chair Jerome Powell and expectations of healthy demand from top consumer China. Powell said the U.S. central bank is likely to increase interest rates more than anticipated to tame inflation. Global aluminium producers have offered Japanese buyers premiums of $125-$145 per tonne for April-June primary metal shipments, up 45%-71% from this quarter, five sources directly involved in quarterly pricing talks said. The offers, if agreed by buyers, would mark the first increase in six quarters and the highest level since the October-December quarter in 2022, reflecting a view from producers that demand from automakers is set to pick up. Japan is Asia's biggest importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region. For the January-March quarter, Japanese buyers agreed to pay a premium of $85-$86 per tonne , down 13-14% from the prior quarter. Technically market is under short covering as the market has witnessed a drop in open interest by -3.28% to settle at 3710 while prices are up 0.2 rupees, now Aluminium is getting support at 205.1 and below same could see a test of 203.2 levels, and resistance is now likely to be seen at 208.2, a move above could see prices testing 209.4.

Trading Ideas:
* Aluminium trading range for the day is 203.2-209.4.
* Aluminium recovered on low level buying after prices dropped from a stronger dollar and completed production cuts in China's major producing provinces.
* Yunnan smelters were said to have satisfied the necessary output cuts to comply with power rationing requirements.
* Global aluminium producers offer Q2 premiums of $125 – $145/T

Mentha oil

Mentha oil yesterday settled down by -0.23% at 1031.9 dropped on profit booking after prices gained on improving export demand especially from China. Mentha exports during Apr-Dec 2022 has dropped by 17.60 percent at 1,783.56 tonnes as compared to 2,164.56 tonnes exported during Apr-Dec 2021. In the month of December 2022 around 298.38 tonnes Mentha was exported as against 236.22 tonnes in November 2022 showing a rise of 26.29%. In the month of December 2022 around 298.32 tonnes of Mentha was exported as against 351.18 tonnes in December 2021 showing a drop of 15.05%. 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 -12.8 Rupees to end at 1183.6 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.59% to settle at 850 while prices are down -2.4 rupees, now Mentha oil is getting support at 1028.9 and below same could see a test of 1025.8 levels, and resistance is now likely to be seen at 1036.3, a move above could see prices testing 1040.6.

Trading Ideas:
* Mentha oil trading range for the day is 1025.8-1040.6.
* In Sambhal spot market, Mentha oil dropped  by -12.8 Rupees to end at 1183.6 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained on improving export demand especially from China.
* Mentha exports during Apr-Dec 2022 has dropped by 17.60 percent at 1,783.56 tonnes
* In the month of December 2022 around 298.38 tonnes Mentha was exported a rise of 26.29% compared to previous month.


Turmeric
Turmeric yesterday settled up by 0.12% at 6918 on short covering after prices dropped as 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-Dec 2022 has rose by 6.81 percent at 1,24,008.08 tonnes as compared to 1,16,100.75 tonnes exported during Apr- Dec 2021. In the month of December 2022 around 12,039.57 tonnes turmeric was exported as against 12,398.63 tonnes in November 2022 showing a drop of 2.90%. In the month of December 2022 around 12,039.57 tonnes of turmeric was exported as against 14,218.72 tonnes in December 2021 showing a rise of 15.83%. 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 6924.4 Rupees dropped -65.1 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.34% to settle at 12075 while prices are up 8 rupees, now Turmeric is getting support at 6864 and below same could see a test of 6808 levels, and resistance is now likely to be seen at 6952, a move above could see prices testing 6984.

Trading Ideas:
* Turmeric trading range for the day is 6808-6984.
* Turmeric gained on short covering after prices dropped as turmeric harvesting has started in the key growing regions
* 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 6924.4 Rupees dropped -65.1 Rupees.

Jeera

Jeera yesterday settled up by 0.96% at 30600 as demand has improved in the export and domestic market due to the Ramadan season ahead. Buyers get active in most of the markets with the commencement of new crop arrivals. Strong supply pressures are reported in the market at 7,000 bags, higher by 1,000 bags as farmers and stockiests are anticipating corrections in prices with the improved crop conditions due to favourable weather conditions in key producing states. Some damage has been reported in Gujarat, Banaskantha region due to very low temperature and frost impact. However, overall crop condition is quite good in Gujarat area as compared to Rajasthan key growing regions. Jeera exports during Apr-Dec 2022 has dropped by 15.91 percent at 146,065.90 tonnes as compared to 173,703.10 tonnes exported during Apr- Dec 2021. In the month of December 2022 around 12,798.15 tonnes jeera was exported as against 11,235.11 tonnes in November 2022 showing a rise of 13.91%. In the month of December 2022 around 12,798.15 tonnes of jeera was exported as against 12,385.20 tonnes in December 2021 showing a rise of 3.33%. 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 -364.65 Rupees to end at 30110.95 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 10.41% to settle at 4041 while prices are up 290 rupees, now Jeera is getting support at 30370 and below same could see a test of 30145 levels, and resistance is now likely to be seen at 30975, a move above could see prices testing 31355.

Trading Ideas:
* Jeera trading range for the day is 30145-31355.
* Jeera gains as demand has improved in the export and domestic market due to the Ramadan season ahead
*Global production will be higher at 4.35 lt against 4.08 lt.
* But net supplies from India are projected 7 per cent lower.
* In Unjha, a key spot market in Gujarat, jeera edged down by -364.65 Rupees to end at 30110.95 Rupees per 100 kg.

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