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Gold

Gold yesterday settled up by 1.18% at 54898 as sentiment remained clouded by worries that aggressive interest rate increases could tip the US economy into recession. The latest data showed that building permits collapsed 11.2% month-over-month in November, the most significant monthly drop since the pandemic-induced blow. Adding to the gloomy outlook, even the Bank of Japan, known for its ultra-accommodate monetary stance, took the first steps into normalizing policy. In a surprise move overnight, the BoJ announced that it would allow the 10-year bond yield to move 50 bps either way of its 0% target instead of the 25 bps range. The pace of Swiss gold shipments to Asia and the Middle East slackened in November as prices rose, with exports to countries including China and Turkey falling from October's level, Swiss customs data showed. Huge amounts of gold have flowed eastwards from Europe and North America this year as rising interest rates triggered selling by financial investors, pushing down prices. The country in November exported 34.9 tonnes of gold worth around $2 billion to mainland China and Hong Kong, down from 47.1 tonnes in October, customs data showed. The customs data also showed that Switzerland imported 6.4 tonnes of Russian gold worth around $360 million in November, taking its imports of Russian gold since May to 18.6 tonnes. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.17% to settle at 15064 while prices are up 638 rupees, now Gold is getting support at 54501 and below same could see a test of 54103 levels, and resistance is now likely to be seen at 55146, a move above could see prices testing 55393.
Trading Ideas:
* Gold trading range for the day is 54103-55393.
* Gold rose as sentiment remained clouded by worries that aggressive interest rate increases could tip the US economy into recession.
* The latest data showed that building permits collapsed 11.2% month-over-month in November.
* BoJ announced that it would allow the 10-year bond yield to move 50 bps either way of its 0% target instead of the 25 bps range


Silver

Silver yesterday settled up by 3.15% at 69642 as concerns about a global recession and inflation becoming even more entrenched boosted demand for the precious metal. Building permits in the United States tumbled 11.2 percent from a month earlier to a seasonally adjusted annual rate of 1.342 million in November 2022, the lowest level since June 2020 and well below market expectations of 1.485 million. Permits, a proxy for future construction, have been falling as soaring prices and rising mortgage rates hit demand and activity. Housing starts in the US edged 0.5% lower to a seasonally adjusted annualized rate of 1.427 million in November of 2022, after falling by a downwardly revised 2.1% in October, and compared to market forecasts of 1.4 million. Single-family housing starts dropped 4.1% to a rate of 828 thousand while the rate for units in buildings with five units or more jumped 4.8% to 584 thousand, the highest since April. Adding to the gloomy outlook, even the Bank of Japan, known for its ultra-accommodate monetary stance, took the first steps into normalizing policy. In a surprise move overnight, the BoJ announced that it would allow the 10-year bond yield to move 50 bps either way of its 0% target instead of the 25 bps range. Technically market is under fresh buying as the market has witnessed a gain in open interest by 19.16% to settle at 22827 while prices are up 2130 rupees, now Silver is getting support at 68075 and below same could see a test of 66508 levels, and resistance is now likely to be seen at 70492, a move above could see prices testing 71342.
Trading Ideas:
* Silver trading range for the day is 66508-71342.
* Silver rose as concerns about a global recession and inflation becoming even more entrenched boosted demand for the precious metal.
* US Building permits tumbled 11.2 percent from a month earlier to a seasonally adjusted annual rate of 1.342 million in November 2022
* Housing starts in the US edged 0.5% lower to a seasonally adjusted annualized rate of 1.427 million in November of 2022


Crude oil

Crude oil yesterday settled up by 0.19% at 6319 supported by a softer dollar and a U.S. plan to restock petroleum reserves, but gains were capped by uncertainty over the impact of rising COVID-19 cases in top oil importer China. Oil was supported by the U.S. Energy Department saying that it will begin repurchasing crude for the Strategic Petroleum Reserve - the first purchases since releasing a record 180 million barrels from the reserve this year. Oil output from the Permian shale basin in January is set to touch a record 5.6 million barrels per day (bpd), the U.S. forecast, but the increase is a third of September's pace. Output in the biggest U.S. shale oil basin is set to rise by about 37,000 bpd, the smallest gain in seven months, based on projections from the U.S. Energy Information Administration (EIA) in its monthly drilling productivity report. Gains slowed as some of the largest firms are warning of overworked oilfields and less productive new wells. Overall U.S. output is forecast to reach a record 9.32 million bpd in January, according to the EIA, up only 94,500 bpd over the prior month. Technically market is under short covering as the market has witnessed a drop in open interest by -8.29% to settle at 7588 while prices are up 12 rupees, now Crude oil is getting support at 6227 and below same could see a test of 6135 levels, and resistance is now likely to be seen at 6391, a move above could see prices testing 6463.
Trading Ideas:
* Crude oil trading range for the day is 6135-6463.
* Crude oil prices rose supported by a softer dollar and a U.S. plan to restock petroleum reserves
* But gains were capped by uncertainty over the impact of rising COVID-19 cases in top oil importer China.
* Rising interest rates and recession fears weigh


Natural gas

Nat.Gas yesterday settled down by -9.08% at 444.7 on forecasts for less cold weather than previously expected over the next two weeks that will likely reduce heating demand. Recent data showed that natural gas flowing towards US LNG terminals rose to 13 bcf per day, the most since June, pointing to firm international demand. At the same time, extreme cold from North Dakota to Texas resulted in the freeze of oil and gas wells, lowering production. Meanwhile, the Freeport LNG export plant in Texas, forced to go offline in June following a fire, expects to bring operations back online only by year's end, leaving more supply on the domestic market. The number of rigs drilling for natural gas in the United States rose by 1 this week to 154, data from oil services firm Baker Hughes showed. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. On a daily basis, however, output was on track to drop about 2.4 bcfd over the past four days to a preliminary five-week low of 98.3 bcfd on Friday as freezing weather blankets parts of Texas, Oklahoma and North Dakota, causing well freeze-offs. Technically market is under fresh selling as the market has witnessed a gain in open interest by 20.52% to settle at 13292 while prices are down -44.4 rupees, now Natural gas is getting support at 425.2 and below same could see a test of 405.6 levels, and resistance is now likely to be seen at 477.3, a move above could see prices testing 509.8.
Trading Ideas:
* Natural gas trading range for the day is 405.6-509.8.
* Natural gas dropped on forecasts for less cold weather than previously expected over the next two weeks that will likely reduce heating demand.
* Meanwhile, after several delays, the Freeport LNG export plant in Texas was on track to receive about 25 mmcfd of feedgas.
* Elsewhere, there were reports of an explosion at a Russian pipeline bringing gas to Europe.



Copper

Copper yesterday settled up by 1.03% at 712.7 supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government. The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy before long. Output from top producer Chile slid 6.7% in the first three quarters of the year, with mine protests in Peru stifling the activity. Commodity trader Trafigura warned that global copper stocks have fallen to record lows, with current inventories being enough to supply world consumption for just 4.9 days. Finally, mining giant Glencore estimated a supply shortfall of 50 million tonnes in 2023. The People's Bank of China (PBoC) left its key lending rates unchanged for the fourth straight month at December fixing, as widely expected, amid a slowdown in economic activity due to rising COVID infections and efforts from the government to stabilize its economy in 2023 and maintain ample liquidity in financial markets in order to meet key targets. The one-year loan prime rate (LPR) was held unchanged at 3.65%; while the five-year rate, a reference for mortgages, was maintained at 4.3%. Technically market is under short covering as the market has witnessed a drop in open interest by -3.95% to settle at 4015 while prices are up 7.25 rupees, now Copper is getting support at 704.9 and below same could see a test of 697 levels, and resistance is now likely to be seen at 718.7, a move above could see prices testing 724.6.
Trading Ideas:
* Copper trading range for the day is 697-724.6.
* Copper prices rose, supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government.
* The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy before long.
* Output from top producer Chile slid 6.7% in the first three quarters of the year, with mine protests in Peru stifling the activity.


Zinc

Zinc yesterday settled up by 1.54% at 274.4 amid a weaker dollar and on hopes that the easing of Covid restrictions in top consumer China would spur demand. On the supply side, inventories remain at record lows as the power crisis in Europe has forced many smelters to shut down or curtail production this year. The People's Bank of China (PBoC) left its key lending rates unchanged for the fourth straight month at December fixing, as widely expected, amid a slowdown in economic activity due to rising COVID infections and efforts from the government to stabilize its economy in 2023 and maintain ample liquidity in financial markets in order to meet key targets. The World Bank has cut its China growth outlook for this year and next, citing the impact of the abrupt loosening of strict COVID-19 containment measures and persistent property sector weakness. The Washington-based lender, in a report, said it expected China's economy to grow 2.7% in 2022, before recovering to 4.3% in 2023 as it reopens following the worst of the pandemic. The bank's expected expansion for 2022 would be well below the official target of around 5.5%. In September, the World Bank forecast China's growth at 2.8% this year and 4.5% next year. Technically market is under short covering as the market has witnessed a drop in open interest by -14.55% to settle at 1956 while prices are up 4.15 rupees, now Zinc is getting support at 269.4 and below same could see a test of 264.4 levels, and resistance is now likely to be seen at 277.3, a move above could see prices testing 280.2.
Trading Ideas:
* Zinc trading range for the day is 264.4-280.2.
* Zinc gains amid a weaker dollar and on hopes that the easing of Covid restrictions in China would spur demand.
* Inventories remain at record lows as the power crisis in Europe has forced many smelters to shut down
* PBOC Injects CNY 85 Billion into Market



Aluminium

Aluminium yesterday settled up by 0.34% at 209.4 helped by a weakening dollar and a sharp fall in inventories available on the London Metal Exchange (LME), but rising COVID cases in China and expectations of surplus supply next year limited gains. LME aluminium inventories have been falling in recent weeks and stocks in Shanghai Futures Exchange warehouses, at 92,373 tonnes, are near multi-year lows. Yet prices of the metal used in transport, construction and packaging have declined in December and are down 15% this year due to a global economic slowdown. Citi expects the 65-70 million tonne a year market to be oversupplied by 900,000 tonnes next year. In China, the biggest metals consumer, cities scrambled to install hospital beds and build fever screening clinics amid a surge in COVID-19 cases that will likely disrupt economic activity. Global primary aluminium output in November rose 3.8% year on year to 5.611 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.311 million tonnes in November, the IAI said. China's aluminium imports in November fell 35.7% from a year earlier as a result of mounting domestic supply, also as the COVID-hit economy continued to temper demand for the light metal. Technically market is under short covering as the market has witnessed a drop in open interest by -30.79% to settle at 2754 while prices are up 0.7 rupees, now Aluminium is getting support at 207.8 and below same could see a test of 206.3 levels, and resistance is now likely to be seen at 211.1, a move above could see prices testing 212.9.
Trading Ideas:
* Aluminium trading range for the day is 206.3-212.9.
* Aluminium rose helped by a weakening dollar and a sharp fall in inventories available on the London Metal Exchange
* LME aluminium inventories have been falling in recent weeks and stocks in SHFE warehouses, are near multi-year lows.
* Global aluminium output rises 3.8% y/y in November – IAI


Mentha oil

Mentha oil yesterday settled up by 1.79% at 1017.3 on profit booking after prices gained as the group of ministers’ (GoM’s) has given its views on bringing mentha oil, one of the key ingredients in pan masala, under the reverse charge mechanism. Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes as compared to 1,564.12 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 141.82 tonnes Mentha was exported as against 220.67 tonnes in September 2022 showing a drop of 35.73%. In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021 showing a drop of 49.17%. Synthetic Mentha supply remains uninterrupted. Support also seen 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. In Sambhal spot market, Mentha oil gained by 10.8 Rupees to end at 1156.2 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -11.09% to settle at 465 while prices are up 17.9 rupees, now Mentha oil is getting support at 1010.4 and below same could see a test of 1003.6 levels, and resistance is now likely to be seen at 1022, a move above could see prices testing 1026.8.
Trading Ideas:
* Mentha oil trading range for the day is 991-1044.8.
* In Sambhal spot market, Mentha oil gained  by 1.3 Rupees to end at 1157.5 Rupees per 360 kgs.
* Mentha oil dropped on profit booking after prices gained as GoM’s has given its views on bringing mentha oil, under the reverse charge mechanism.
* Mentha exports during Apr-Oct 2022 has dropped by 20.15 percent at 1,249.02 tonnes.
* In the month of October 2022 around 141.82 tonnes of Mentha was exported as against 279.00 tonnes in October 2021


Turmeric

Turmeric yesterday settled up by 1.45% at 8406 amid buying activities has increased amid weaker production for upcoming season. Not only weaker production, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh will also help prices to trade on positive note. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. Turmeric exports during Apr- Oct 2022 has rose by 11.09 percent at 99,569.88 tonnes as compared to 89,626.39 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 11,178.11 tonnes turmeric was exported as against 13,990.65 tonnes in September 2022 showing a fall of 20.10%. In the month of October 2022 around 11,178.11 tonnes of turmeric was exported as against 12,534.87 tonnes in October 2021 showing a fall of 10.82%. 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 7425.85 Rupees gained 61.5 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.67% to settle at 8445 while prices are up 120 rupees, now Turmeric is getting support at 8268 and below same could see a test of 8132 levels, and resistance is now likely to be seen at 8492, a move above could see prices testing 8580.
Trading Ideas:
* Turmeric trading range for the day is 8248-8784.
* Turmeric prices gained as buying activities has increased amid weaker production for upcoming season.
* However, robust export demand and looming uncertainty over extent of crop damage in Andhra Pradesh limited downside
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In Nizamabad, a major spot market in AP, the price ended at 7425.85 Rupees gained 61.5 Rupees.


Jeera

Jeera yesterday settled up by 2.92% at 28005 as sowing In Gujarat, dropped by nearly -5% with 261,635.00 hectares against sown area of 2021 which was 274,298.00 hectares as on 19-12-2022. Prices gained to all time high amid higher demand for the fresh crop and supply tightness in the physical market. Good demand expected from China in December-January and Ramzan demand during January-February from gulf & other countries. Jeera exports during Apr- Oct 2022 has dropped by 18.92 percent at 1,22,015.13 tonnes as compared to 1,50,479.11 tonnes exported during Apr- Oct 2021. In the month of October 2022 around 12,427.86 tonnes jeera was exported as against 18,081.78 tonnes in September 2022 showing a drop of 31.27%. In the month of October 2022 around 12,427.86 tonnes of jeera was exported as against 11,260.72 tonnes in October 2021 showing a rise of 10.36%. 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 up by 622.15 Rupees to end at 27279.55 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -2.32% to settle at 7341 while prices are up 795 rupees, now Jeera is getting support at 27560 and below same could see a test of 27110 levels, and resistance is now likely to be seen at 28350, a move above could see prices testing 28690.
Trading Ideas:
* Jeera trading range for the day is 27285-29715.
* Jeera prices gained to all time high as sowing In Gujarat, dropped by nearly -5% with 261,635.00 hectares
* Support also seen amid higher demand for the fresh crop and supply tightness.
* 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 up by 185.55 Rupees to end at 27465.1 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -2.29% at 29840 as the CAI has reduced its cotton crop estimate for the 2022- 23 season to 339.75 lakh bales of 170 kgs each. This season, Punjab has seen a drastic decline in the arrival of Kapas (raw unginned cotton). Nearly 73% less cotton arrived in mandis compared to the arrival in the same period last year. This year, the yield of the crop has also been low. The less arrival is affecting the business of both ginners, who separate cotton from seed, and spinners, who make thread from cotton, as they are getting less raw material from the local market even during season. The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year. Against the production of around 13.16 lakh cotton bales last year, the production this year is estimated to be around 17.79 lakh bales. According to USDA, World Cotton and Market Report, Global cotton production is estimated down by 700,000 bales from the previous month to 115.7 million, largely owing to lower production in Pakistan. Pakistan production has fallen due to floods and poor weather. Global stocks are forecasted higher with consumption projected lower more than 3.0 million bales. This is the seventh consecutive monthly decline for global consumption. In spot market, Cotton dropped by -760 Rupees to end at 30590 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.59% to settle at 1533 while prices are down -700 rupees, now Cotton is getting support at 29300 and below same could see a test of 28760 levels, and resistance is now likely to be seen at 30610, a move above could see prices testing 31380.
Trading Ideas:
* Cotton trading range for the day is 29690-30510.
* Cotton gains as support seen after CAI pegs down its cotton crop estimate for 2022-23 season by 4.25 lakh bales to 339.75 lakh bales
* Cotton arrival in mandis of Punjab down by 73% this year
*The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year.
* In spot market, Cotton dropped  by -160 Rupees to end at 30430 Rupees.

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