IGI Logo

Gold

Gold yesterday settled up by 0.01% at 47924 as prices settled flat pressured by a firmer dollar and higher U.S. Treasury yields as upbeat U.S. jobs data bolstered the case for rate hikes by the Federal Reserve. The U.S. economy created far more jobs than expected in January even as raging COVID-19 infections disrupted activity at consumer-facing businesses, pointing to underlying strength in the labor market. The survey of establishments in the Labor Department's closely watched employment report showed nonfarm payrolls increased by 467,000 jobs last month. Data for December was revised higher to show 510,000 jobs created instead of the previously reported 199,000. Top Asian hubs saw muted demand for physical gold in the wake of Lunar New Year holidays, while demand slightly improved in major consumer India as jewellers raised purchases for the wedding season. Dealers were offering a discount of up to $1.5 an ounce over official domestic prices, down from the last week's discount of $3. Jewellers are expecting weddings to pick up in coming months as coronavirus cases are falling in most states and this could allow the government to remove restrictions. Hong Kong saw premiums of around $0.50-$1.80 an ounce over benchmark rates in a holiday-thinned week. In Japan, dealers charged premiums of $0.25, unchanged from last week, with the demand being low in a quiet market. Technically market is under short covering as market has witnessed drop in open interest by -1.97% to settled at 11406 while prices up 7 rupees, now Gold is getting support at 47709 and below same could see a test of 47493 levels, and resistance is now likely to be seen at 48134, a move above could see prices testing 48343.

Trading Ideas:
# Gold trading range for the day is 47493-48343.
# Gold settled flat pressured by a firmer dollar and higher U.S. Treasury yields as upbeat U.S. jobs data bolstered the case for rate hikes by the Federal Reserve.
# The ECB set a more hawkish tone in its last meeting and the BoE raised rates as expected this month.
# Fed's Barkin says rates should move to pre-pandemic levels, then assess next steps

Silver

Silver yesterday settled up by 0.19% at 60849 tracking rise in base metals and crude oil prices even as the dollar recovered from recent losses and edged up marginally after data showed U.S. employment rose by much more than expected in January, raising concerns about the outlook for interest rates. The payrolls report showed an unexpected strong gain in US employment for January, reinforcing the Fed's view the labour market is recovering and raising the odds the central bank will deliver a bigger rate hike in March. The Bank of England hiked rates in its first back-to-back rise since 2004, and the European Central Bank signaled a more urgent path towards hiking rates for the first time in a decade. Markets are now factoring in as many as five U.S. rate hikes this year, with a sixth one staring to gain traction for later in the year. The U.S. economy created far more jobs than expected in January even as raging COVID-19 infections disrupted activity at consumer-facing businesses, pointing to underlying strength in the labor market. The survey of establishments in the Labor Department's closely watched employment report showed nonfarm payrolls increased by 467,000 jobs last month. Data for December was revised higher to show 510,000 jobs created instead of the previously reported 199,000. Technically market is under short covering as market has witnessed drop in open interest by -2.77% to settled at 15578 while prices up 117 rupees, now Silver is getting support at 60277 and below same could see a test of 59705 levels, and resistance is now likely to be seen at 61365, a move above could see prices testing 61881.

Trading Ideas:
# Silver trading range for the day is 59705-61881.
# Silver prices gained tracking rise in base metals and crude oil prices even as the dollar recovered from recent losses
# The U.S. economy created far more jobs than expected in January even as raging COVID-19 infections disrupted activity at consumer-facing businesses
# The payrolls report showed an unexpected strong gain in US employment for January


Crude oil

Crude oil yesterday settled up by 3.93% at 6902 after a massive winter storm swept across the US and disrupted some oil production in the Permian Basin region. Meanwhile, OPEC and its allies stuck with their plan to release more barrels into a strengthening market gradually. In March, the oil cartel agreed to increase oil output by 400,000 barrels per day, even as data showed that some members struggled to keep up with the production quotas. OPEC+ agreed to stick to moderate rises in its oil output with the group already struggling to meet existing targets and wary of responding to calls on its strained capacity for more crude from top consumers to cap surging prices. The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+ which produces more than 40% of global oil supply, has faced calls from the United States, India and others to pump more oil as economies recover from the pandemic. U.S. crude oil and distillate inventories fell last week as fuel demand increased to its highest level since August 2019, the Energy Information Administration said. Crude inventories fell by 1 million barrels in the week to Jan. 28 to 415.1 million barrels, compared with expectations in a Reuters poll for a 1.5 million-barrel rise. Technically market is under fresh buying as market has witnessed gain in open interest by 25.26% to settled at 15308 while prices up 261 rupees, now Crude oil is getting support at 6758 and below same could see a test of 6614 levels, and resistance is now likely to be seen at 7002, a move above could see prices testing 7102.

Trading Ideas:
# Crude oil trading range for the day is 6614-7102.
# Crude oil rallied after a massive winter storm swept across the US and disrupted some oil production in the Permian Basin region.
# Demand recovery combined with falling stockpiles and supply disruptions have been pushing prices higher.
# OPEC and its allies stuck with their plan to release more barrels into a strengthening market gradually.


Nat.Gas

Nat.Gas yesterday settled down by -5.14% at 350.3 on forecasts for less cold and lower heating demand over the next two weeks than previously expected. Traders said the price decline came even as a massive storm battered much of the country from Texas to New York and cut gas output to its lowest level since 2021's February freeze. The U.S. Energy Information Administration (EIA) said U.S. utilities pulled a massive 268 billion cubic feet (bcf) of gas from storage during the brutally cold week ended Jan. 28, the biggest weekly withdrawal since last year's February freeze. That withdrawal, however, was lower than the 277-bcf drop forecasted and compares with a decline of 183 bcf in the same week last year and a five-year (2017-2021) average decline of 150 bcf. Data provider Refinitiv said output in the U.S. Lower 48 states fell from a record 97.3 billion cubic feet per day (bcfd) in December to 92.9 bcfd in January and 91.3 bcfd so far in this month after wells in several regions froze, including the Permian in Texas and New Mexico, the Bakken in North Dakota and the Appalachia in Pennsylvania, West Virginia and Ohio. n a daily basis, preliminary data from Refinitiv showed output was on track to drop to 88.2 bcfd, which would be its lowest in a day since last year's February freeze. Technically market is under long liquidation as market has witnessed drop in open interest by -10.84% to settled at 4482 while prices down -19 rupees, now Natural gas is getting support at 339 and below same could see a test of 327.6 levels, and resistance is now likely to be seen at 371.4, a move above could see prices testing 392.4.

Trading Ideas:
# Natural gas trading range for the day is 327.6-392.4.
# Natural gas slipped on forecasts for less cold and lower heating demand over the next two weeks than previously expected.
# The price decline came even as a massive storm battered much of the country from Texas to New York and cut gas output
# EIA said U.S. utilities pulled a massive 268 billion cubic feet (bcf) of gas from storage during the brutally cold week ended Jan. 28


Copper

Copper yesterday settled up by 0.31% at 756.25 supported by a weaker dollar and thin inventories, but worries that central bank rate hikes would curb growth and metal demand capped gains. The Bank of England raised interest rates for the second time in as many months, while the European Central Bank (ECB) was more hawkish than expected. Chilean state-owned Codelco's copper production rose 4.3% year-on-year in December to 164,600 tons and the Collahuasi copper mine – a joint venture by Glencore and Anglo American – saw output increase 12.9% to 49,900 tons, the Chilean Copper Commission (Cochilco) reported. Meanwhile extraction at BHP's Escondida, the world's largest copper mine, fell 17.6% in December to 86,400 tons. Rising geopolitical tensions surrounding Ukraine have fuelled market anxiety about metals supply, driving a market rally recently, as the United States has threatened to hit commodities powerhouse Russia with economic sanctions. Mining giant Grupo Mexico said that global copper demand will grow 3% in 2022. It added the projection could be impacted by an expected economic slowdown in China due to real estate industry hurdles, the coronavirus Omicron variant and uncertainty over production growth in Chile and Peru, which together represent about 40% of global supply. Technically market is under short covering as market has witnessed drop in open interest by -0.81% to settled at 3295 while prices up 2.3 rupees, now Copper is getting support at 749.2 and below same could see a test of 741.9 levels, and resistance is now likely to be seen at 761.3, a move above could see prices testing 766.1.

Trading Ideas:
# Copper trading range for the day is 741.9-766.1.
# Copper prices edged up supported by a weaker dollar and thin inventories
# Mining giant Grupo Mexico said that global copper demand will grow 3% in 2022.
# Codelco, Collahuasi copper mine production up in December – Chile's Cochilco

Zinc

Zinc yesterday settled up by 0.44% at 298.7 as zinc premiums in Europe reached new highs during the week amid an acute lack of availability in the spot market, while those in the United States held at record high levels. The global zinc market deficit edged lower to 19,700 tonnes in November from a revised shortfall of 22,100 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,100 tonnes in October. During the first 11 months of 2021, ILZSG data showed a deficit of 126,000 tonnes versus a surplus of 479,000 tonnes in the same period of 2020. China's net imports of refined zinc slid by 16% to 429,000 tonnes last year, the lowest annual tally since 2016. This multi-year trend has reflected the build-out of domestic smelter capacity - production hit a fresh record high of 6.56 million tonnes in 2021 - but it appreciably accelerated in the fourth quarter of last year. December's imports of 10,334 tonnes were the lowest monthly total since 2008 and reflect shifting physical market dynamics. The London-Shanghai arbitrage is moving in favour of exports as smelter closures in Europe open up supply-chain gaps and send premiums soaring. Technically market is under short covering as market has witnessed drop in open interest by -0.93% to settled at 1279 while prices up 1.3 rupees, now Zinc is getting support at 297.3 and below same could see a test of 295.9 levels, and resistance is now likely to be seen at 299.8, a move above could see prices testing 300.9.

Trading Ideas:
# Zinc trading range for the day is 295.9-300.9.
# Zinc prices rose as zinc premiums in Europe reached new highs during the week amid an acute lack of availability in the spot market
# China's net imports of refined zinc slid by 16% to 429,000 tonnes last year, the lowest annual tally since 2016.
# The global zinc market deficit edged lower to 19,700 tonnes in November from a revised shortfall of 22,100 tonnes a month earlier


Nickel

Nickel yesterday settled up by 0.69% at 1742.6 as renewed demand and limited promptly available inventories in both Europe and the United States boosted nickel premiums. The global nickel market saw a deficit of 3,000 tonnes in November compared with a shortfall of 1,600 tonnes a month earlier, data from the International Nickel Study Group (INSG) showed. During the first 11 months of the year, there was a deficit in the nickel market of 167,600 tonnes compared with a surplus of 92,500 tonnes in the same period of the previous year, the Lisbon-based INSG added. Inventories in LME-registered warehouses have fallen to 89,364 tonnes from around 250,000 tonnes a year ago and stocks in ShFE warehouses, at 2,975 tonnes, are the lowest on record. Lack of available supply pushed the premium for cash nickel over the three-month contract above $500 a tonne for the first time since 2009. China’s imports of refined nickel doubled year-on-year and the country continued to step up purchases of a widening range of nickel raw materials. China's imports of refined nickel doubled to 261,000 tonnes with a marked acceleration over the second half of last year. Nickel premiums rise across the board in Europe on strong demand. Premiums for nickel have risen within Europe after demand increases within the region across all products. Technically market is under short covering as market has witnessed drop in open interest by -3.24% to settled at 2387 while prices up 11.9 rupees, now Nickel is getting support at 1731.9 and below same could see a test of 1721.2 levels, and resistance is now likely to be seen at 1751.5, a move above could see prices testing 1760.4.

Trading Ideas:
# Nickel trading range for the day is 1721.2-1760.4.
# Nickel prices rose as renewed demand and limited promptly available inventories in both Europe and the United States boosted nickel prices.
# China’s imports of refined nickel doubled year-on-year
# The global nickel market saw a deficit of 3,000 tonnes in November compared with a shortfall of 1,600 tonnes a month earlier


Aluminium

Aluminium yesterday settled up by 1.25% at 246.2 amid strong demand, tight supply, and high energy prices. Electricity costs in Europe remain elevated despite recent ease in natural gas and coal prices, prompting smelters including Norsk Hydro, Aluminium Dunkerque, and Alcoa to cut production. Stockpiles of aluminum in warehouses approved by the LME fell to less than 850,000 tons, the lowest level since 2007. At the same time, tensions between the US and Russia over Ukraine brought the possibility of sanctions on Russian aluminum producers. As a result, aluminum prices are expected to remain elevated this year as the supply shortfall will likely persist. At the same time, tensions between the US and Russia over Ukraine brought the possibility of sanctions on Russian aluminum producers. Global primary aluminium output fell 1.25% year on year in December to 5.622 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production declined to 3.192 million tonnes in December versus 3.3 million tonnes in the same month in 2020, the IAI said. China's aluminium imports in December eased from the previous month, snapping three monthly gains, although imported volumes were strong enough to solidify 2021's position as a record year of shipments. Technically market is under fresh buying as market has witnessed gain in open interest by 2.57% to settled at 2313 while prices up 3.05 rupees, now Aluminium is getting support at 244.3 and below same could see a test of 242.2 levels, and resistance is now likely to be seen at 247.5, a move above could see prices testing 248.6.

Trading Ideas:
# Aluminium trading range for the day is 242.2-248.6.
# Aluminium rose amid strong demand, tight supply, and high energy prices.
# Stockpiles of aluminum in warehouses approved by the LME fell to less than 850,000 tons, the lowest level since 2007
# Global primary aluminium output fell 1.25% year on year in December to 5.622 million tonnes


Mentha oil

Mentha oil yesterday settled up by 0.28% at 974.8 on short covering after prices dropped as sentiments dropped among the trader with the third wave of corona virus is spreading five times faster. There is an explosive situation of infection in seven states of the country. Due to the rapid spread of Omicron, this curiosity arises in the mind whether there will be a lock down in the country. Overall 2022 Q1 prices are expected to see good support as the Indian pharma industry has shown a double digit growth of around 15% led by growth of Covid-19 products in the last one year as against a single digit growth of 3% shown last year, according to Indian pharmaceutical market research company Pharmasofttech AWACS Pvt. Ltd in its latest report. Also as per the latest news going viral in market is that Mandi Tax has been exempted for exports and the orders have been sent to all Mandi Sectt offices district wise, while trader are waiting for complete information on same. Due to lackluster price move since last 2 year with poor export performance this year's sowing can see much impact resulting surge in prices. Also the FMCG makers also expect that a sudden increase in COVID cases and some restrictions imposed by local authorities in some states would again impact the demand for out of home' channels products, which was recovering from the last few months, though demand for home consumption and immunity products is going to gain for few weeks. In Sambhal spot market, Mentha oil dropped by -16.3 Rupees to end at 1083.8 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -2.38% to settled at 1024 while prices up 2.7 rupees, now Mentha oil is getting support at 972.9 and below same could see a test of 971 levels, and resistance is now likely to be seen at 976.8, a move above could see prices testing 978.8.

Trading Ideas:
# Mentha oil trading range for the day is 971-978.8.
# In Sambhal spot market, Mentha oil dropped  by -16.3 Rupees to end at 1083.8 Rupees per 360 kgs.
# Mentha oil gained on short covering after prices dropped as sentiments dropped with the third wave of corona virus is spreading five times faster.
# Overall 2022 Q1 prices are expected to see good support as the Indian pharma industry has shown a double digit growth of around 15%.
# Due to lackluster price move since last 2 year with poor export performance this year's sowing can see much impact resulting surge in prices.

 

Turmeric

Turmeric yesterday settled up by 3.24% at 10132 amid crop damage due to heavy rains and cyclones this year. Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones. The arrival of the new crop has started in the markets of Telangana and Maharashtra. In the first 7 months (April-October) of the financial year 2021-22, exports declined by 23% to 89,850 tonnes over the previous year, but higher by 6.5% over the 5-year average. For the past three years, traders were offering lower price for turmeric due to lack of demand. The farmers, who incurred losses during this period due to low price, are hoping to get good price this year, so that they could clear their dues to some extent. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In Nizamabad, a major spot market in AP, the price ended at 9461.9 Rupees gained 140.45 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.47% to settled at 9985 while prices up 318 rupees, now Turmeric is getting support at 9858 and below same could see a test of 9586 levels, and resistance is now likely to be seen at 10350, a move above could see prices testing 10570.

Trading Ideas:
# Turmeric trading range for the day is 9586-10570.
# Turmeric prices gained amid crop damage due to heavy rains and cyclones this year.
# Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones.
# The arrival of the new crop has started in the markets of Telangana and Maharashtra.
# In Nizamabad, a major spot market in AP, the price ended at 9461.9 Rupees gained 140.45 Rupees.


Jeera

Jeera yesterday settled up by 1.38% at 20175 after the news that China export started again while export demand will still under pressure due to tariff cost and ahead of arrival. Support seen amid rise in export demand, the decline in the 2020-21 production as well as carryover stock estimates kept trade sentiments strong. The export of cumin seeds declined by 20% year-on-year to 1.61 lakh tonnes in April-November, from 2.02 lakh tonnes in the previous year. There is a possibility of damage to the cumin crop due to rain and cloudy sky. The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability. Exports of Indian cumin usually decrease after July-August every year when Turkey and Syria used to supply the global consumers. The estimated jeera production for the crop year 2020-21 may be lower by 30-35% on account of decline in sown area and lower yield (because of adverse weather prevailing) in the major producing states Gujarat and Rajasthan. The cropped area has fallen due to a shift towards other crops like cotton, soybean and mustard, which offered lucrative returns last year. The export of cumin is increasing continuously and in the coming days, the export sales are expected to continue with greater quantity. The carry forward inventory is pegged lower versus last year, as consumption is likely to remain stable while production estimate is revised lower. In Unjha, a key spot market in Gujarat, jeera edged up by 475.35 Rupees to end at 19481.25 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -0.37% to settled at 10404 while prices up 275 rupees, now Jeera is getting support at 19960 and below same could see a test of 19745 levels, and resistance is now likely to be seen at 20415, a move above could see prices testing 20655.

Trading Ideas:
# Jeera trading range for the day is 19745-20655.
# Jeera gained after the news that China export started again while export demand will still under pressure due to tariff cost
# The export of cumin seeds declined by 20% year-on-year to 1.61 lakh tonnes in April-November, from 2.02 lakh tonnes in the previous year.
# The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability.
# In Unjha, a key spot market in Gujarat, jeera edged up by 475.35 Rupees to end at 19481.25 Rupees per 100 kg.

 

Cotton

Cotton yesterday settled up by 0.45% at 37560 amid the low cotton yield this season due to excessive rain and pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). Cotton arrivals from October 2021 till 01st February 2022 is reported 36% higher from the same period in last year. An official of the Cotton Corporation of India (CCI), said unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield, but also affected the crop’s quality. Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity. In the current season, cotton acreage in the Gujarat stood at 22.53 lakh hectare in the kharif season 2021-22 as against 22.78 lakh hectares in the previous season, with an average of 25.53 lakh hectares recorded over the previous three years. As per the Gujarat government’s First Advanced Estimate (FAE), cotton production in Gujarat at 80.95 lakh bales, each containing 170 kg of seed-cotton, is almost as normal as last year’s. In spot market, Cotton gained by 190 Rupees to end at 37560 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.47% to settled at 6376 while prices up 170 rupees, now Cotton is getting support at 37340 and below same could see a test of 37120 levels, and resistance is now likely to be seen at 37800, a move above could see prices testing 38040.

Trading Ideas:
# Cotton trading range for the day is 37120-38040.
# Cotton gained amid the low cotton yield this season due to excessive rain and pink bollworm attack
# Unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield, but also affected the crop’s quality.
# Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity.
# In spot market, Cotton gained  by 190 Rupees to end at 37560 Rupees.

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