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Gold
Gold yesterday settled up by 0.68% at 50802 recovered from lows as a stronger-than-expected inflation reading in the US reinforced the need for higher and faster interest rate hikes. US consumer prices surged 9.1% from a year earlier in June, topping estimates and confirming that the Federal Reserve will stick to its aggressive tightening path. The Fed is widely seen hiking interest rates by another 75 basis points this month following a similar move in June. Gold also came under pressure recently from a strong dollar as investors opted for the safe-haven currency as a hedge against surging inflation and recession risks. U.S. President Joe Biden said June inflation figures were "unacceptably high" but also said they were out of date given the recent drop in gasoline prices. "Energy alone comprised nearly half of the monthly increase in inflation. Data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June," Biden said in a statement. Physical gold demand improved slightly in India and discounts narrowed after prices eased, while concerns over fresh coronavirus outbreaks kept a leash on activity in China. Dealers were offering a discount of up to $28 an ounce over official domestic prices down from last week's discount of $40. Technically market is under short covering as market has witnessed drop in open interest by -5.85% to settled at 8008 while prices up 345 rupees, now Gold is getting support at 50326 and below same could see a test of 49850 levels, and resistance is now likely to be seen at 51112, a move above could see prices testing 51422.
Trading Ideas:
* Gold trading range for the day is 49850-51422.
* Gold recovered from lows as a stronger-than-expected inflation reading in the US
* U.S. President Joe Biden said June inflation figures were "unacceptably high"
* Fed Swaps indicate around 79 basis-point hikes priced in for July after the CPI data.

Silver
Silver yesterday settled up by 1.17% at 57127 as the dollar retreated after data showing a faster-than-expected acceleration in U.S. consumer price inflation. U.S. consumer prices accelerated in June, resulting in the largest annual increase in inflation in 40-1/2 years and cementing the case for the Fed to hike rates by 75 basis points later this month. Atlanta Fed Bank President Raphael Bostic said that the lack of month-to-month improvement in the pace of price increases warrants another 75 basis point rate hikes later this month. Kansas City Fed Bank President Esther George, a dissenter in last month’s 75 bps increase, warned against abrupt changes in rates that could stress the economy and financial markets. In the UK, fresh economic data offered some support for the economic outlook after the GDP unexpectedly expanded in May and industrial production also surged. China's exports grew at their fastest pace in five months in June, while imports rose at a slower pace, customs data showed. Elsewhere, Eurozone industrial production rose 0.8 percent sequentially in May, well above expectation for a 0.2 percent increase. Technically market is under short covering as market has witnessed drop in open interest by -6.67% to settled at 20560 while prices up 661 rupees, now Silver is getting support at 56494 and below same could see a test of 55862 levels, and resistance is now likely to be seen at 57566, a move above could see prices testing 58006.
Trading Ideas:
* Silver trading range for the day is 55862-58006.
* Silver rose as annual inflation rate in the US surged to 9.1% in June of 2022, the highest since November 1981 and well above market expectations
* U.S. consumer prices accelerated in June
* Largest annual increase in inflation in 40-1/2 years

Crude oil
Crude oil yesterday settled up by 0.1% at 7672 as the dollar rally faltered and the physical oil market remains tight. The global oil market is "walking a tightrope" between scarce supply and the possibility of a recession, the International Energy Agency (IEA) said, with higher prices and worsening economic conditions already taking a toll on demand. "Rarely has the outlook for oil markets been more uncertain. A worsening macroeconomic outlook and fears of recession are weighing on market sentiment, while there are ongoing risks on the supply side," the Paris-based agency said. "For now, weaker-than-expected oil demand growth in advanced economies and resilient Russian supply" has reduced market tightness, the IEA said in its monthly oil report. Still, its demand outlook for 2022 was trimmed by just 200,000 barrels per day (bpd) and is set for an annual rise of 1.7 million bpd and 2.1 million bpd in 2023, when it will reach 101.3 million bpd led by growth in developing countries. Also weighing on oil prices, the American Petroleum Institute reported that US crude inventories rose by 4.76 million barrels last week, while gasoline and distillate stocks increased by 3 million and 3.3 million barrels, respectively. Technically market is under short covering as market has witnessed drop in open interest by -22.9% to settled at 4386 while prices up 8 rupees, now Crude oil is getting support at 7548 and below same could see a test of 7423 levels, and resistance is now likely to be seen at 7801, a move above could see prices testing 7929.
Trading Ideas:
* Crude oil trading range for the day is 7423-7929.
* Crude oil rose as the dollar rally faltered and the physical oil market remains tight.
* IEA trims demand outlook for 2022 by 200,000 bpd, seeing a rise of 1.7 mln bpd to 99.2 mln bpd.
* IEA: Demand in 2023 to rise by 2.1 mln bpd to 101.3 mln bpd, led by strong growth in non-OECD countries.

Natural Gas
Nat.Gas yesterday settled up by 7.11% at 533.2 amid prospects of increasing need for cooling as the weather turned hotter in the United States and continued robust demand from Europe as Nord Stream pipeline gas flows are down amid seasonal works have been driving prices higher. Refinitiv expected average US demand, including exports, to rise to 99.0 bcfd this week from 96.2 bcfd last week. In addition, EIA data showed US utilities added 60 billion cubic feet of gas to storage during the week ended July 1, much less than market expectations of 74 billion cubic feet. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 96.1 bcfd so far in July from 95.3 bcfd in June. That compares with a monthly record high of 96.1 bcfd in December 2021. On a daily basis, however, U.S. output was on track to drop by 3.2 bcfd to nearly a 11-week preliminary low of 93.3 bcfd on Tuesday. That would be the biggest daily decline since output plunged by a record 5.7 bcfd on one day during the 2021 February freeze. Preliminary data is often revised later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 98.0 bcfd this week to 98.9 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Monday. Technically market is under fresh buying as market has witnessed gain in open interest by 75.39% to settled at 5125 while prices up 35.4 rupees, now Natural gas is getting support at 505.7 and below same could see a test of 478.2 levels, and resistance is now likely to be seen at 551.6, a move above could see prices testing 570.
Trading Ideas:
* Natural gas trading range for the day is 478.2-570.
* Natural gas gained amid prospects of increasing need for cooling as the weather turned hotter in US and continued robust demand from Europe.
* Power demand also broke records in the Southwest Power Pool (SPP) and in several parts of the U.S. Southeast over the past week.
* Refinitiv expected average US demand, including exports, to rise to 99.0 bcfd this week from 96.2 bcfd last week.

Copper
Copper yesterday settled up by 0.89% at 631.85 as the dollar reversed course as investors took profits from recent gains following a hotter-than-expected CPI report. Fresh virus outbreaks in China also raised fears of stricter lockdowns and a wider economic disruption in the country, adding downward pressure on copper prices. Prospects of a global recession continued to dominate sentiment as major central banks are racing ahead with aggressive rate hikes to combat surging inflation. Fresh virus outbreaks in China also raised fears of stricter lockdowns and a wider economic disruption in the country, adding downward pressure on copper prices. Meanwhile, Chinese authorities are doubling down on an infrastructure push as the country aims to build a total of 461,000 kilometers of the national highway by 2035, which could boost metal consumption. On the supply side, copper output at Peru’s huge Las Bambas mine has returned to normal levels after a two-month shut down due to protests that ended last month. China's copper cathode output in June was little changed from May, as some smelters shut down for maintenance even as others lifted output. Smelters in the northwestern region Xinjiang, as well as eastern Zhejiang and Anhui provinces, began planned maintenance last month, while some extended the periods they went offline amid poor margins in the world's top copper smelting nation. Technically market is under short covering as market has witnessed drop in open interest by -8.21% to settled at 6119 while prices up 5.6 rupees, now Copper is getting support at 620.8 and below same could see a test of 609.6 levels, and resistance is now likely to be seen at 638.5, a move above could see prices testing 645.
Trading Ideas:
* Copper trading range for the day is 609.6-645.
* Copper rose as the dollar reversed course as investors took profits from recent gains following a hotter-than-expected CPI report.
* Fresh virus outbreaks in China also raised fears of stricter lockdowns and a wider economic disruption in the country, adding downward pressure.
* Copper output at Peru’s huge Las Bambas mine has returned to normal levels after a two-month shut down due to protests that ended last month.

Zinc
Zinc yesterday settled down by -1.22% at 270.3 amid heightened risk aversion, as rising COVID case counts in several regions fueled talk of another round of painful lockdowns in China, especially in Shanghai or Beijing. China aims to build a total of 461,000 kilometres (286,452 miles) of national highway by 2035, compared with 382,000 kilometres by the end of 2021, as authorities are doubling down on an infrastructure push, which means more metals consumption. New bank lending in China leapt in June, rising more than expected, while broad credit growth quickened amid efforts to revive the pandemic-hit economy. Russia's largest natural gas pipeline Nord Stream 1 was closed for a period of ten days, and potential energy shortage rattled the nerves of market players and pushed up metals prices. China's refined zinc output stood at 490,300 mt in June, down 24,900 mt or 4.84% MoM and 17,700 mt or 3.48% YoY. From January to June 2022, the combined refined zinc output was 2.973 million mt, a decrease of 1.49% year on year. Survey showed that the output of domestic refined zinc decreased in June and was less than expected. The output increment was mainly brought about by a smelter in Inner Mongolia which resumed the production after maintenance. In addition, a large smelter in Hunan resumed normal production in June after a minor overhaul. Technically market is under long liquidation as market has witnessed drop in open interest by -3.12% to settled at 1523 while prices down -3.35 rupees, now Zinc is getting support at 265.5 and below same could see a test of 260.7 levels, and resistance is now likely to be seen at 274.7, a move above could see prices testing 279.1.
Trading Ideas:
* Zinc trading range for the day is 260.7-279.1.
* Zinc dropped amid heightened risk aversion, as rising COVID case counts in several regions fueled talk of another round of painful lockdowns in China
* New bank lending in China leapt in June, rising more than expected, while broad credit growth quickened amid efforts to revive the pandemic-hit economy.
* Refined zinc output declined more than expected amid the tight raw material supply and the rapid decline in profits

Aluminium
Aluminium yesterday settled up by 0.24% at 206.2 supported by hopes that Chinese stimulus measures would support economic growth in the world's biggest consumer of the metal. However upside seen limited as traders waited for U.S. inflation data that could influence the pace of interest rate rises, economic growth and metals demand. New bank lending in China leapt in June, rising more than expected, while broad credit growth quickened amid efforts to revive the pandemic-hit economy. The Fed officer Bostic reiterated his support for another 75 basis point rate hike as the primary goal is to get rates to a more neutral position. In other words, the immediate priority is to get inflation back down to 2%. Pessimism loomed over the aluminium market amid steadily rising aluminium supply as well as seasonal low across the downstream, especially when the supporting policies have not yet materialised. China produced 3.361 million mt of aluminium in June (30 calendar days), up 4.48% on the year. The daily output stood at 112,000 mt, up 1,231 on the month and 4,790 mt on the year. The output totalled 19.559 million mt from January to June 2022, an increase of 0.47% on the year. The domestic aluminium supply in June continued to increase. The production resumption and the new capacity in Guangxi, Gansu, Yunnan and other regions totalled around 450,000 mt, contributing the major increase. Technically market is under short covering as market has witnessed drop in open interest by -1.54% to settled at 2886 while prices up 0.5 rupees, now Aluminium is getting support at 204.6 and below same could see a test of 202.9 levels, and resistance is now likely to be seen at 207.8, a move above could see prices testing 209.3.
Trading Ideas:
* Aluminium trading range for the day is 202.9-209.3.
* Aluminium gains supported by hopes that Chinese stimulus measures would support economic growth in the world's biggest consumer of the metal.
* New bank lending in China leapt in June, rising more than expected, while broad credit growth quickened amid efforts to revive the pandemic-hit economy.
* China produced 3.361 million mt of aluminium in June (30 calendar days), up 4.48% on the year.

Mentha oil
Mentha oil yesterday settled down by -0.8% at 998.8 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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 we forecast 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil gained by 10.4 Rupees to end at 1128.6 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.19% to settled at 1060 while prices down -8.1 rupees, now Mentha oil is getting support at 990.3 and below same could see a test of 981.7 levels, and resistance is now likely to be seen at 1005.2, a move above could see prices testing 1011.5.
Trading Ideas:
* Mentha oil trading range for the day is 981.7-1011.5.
* In Sambhal spot market, Mentha oil gained  by 10.4 Rupees to end at 1128.6 Rupees per 360 kgs.
* Mentha dropped as Synthetic Mentha supply remains uninterrupted
* However, downside seen limited 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.

Turmeric
Turmeric yesterday settled down by -1.28% at 7888 on profit booking amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. However, downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. Turmeric exports during 2021-22 (Apr-Mar) has improved by 4 percent at 1.78 lakh tonnes as compared to 1.72 lakh tonnes exported during 2020-21. In the month of March 2022 around 15,751.54 tonnes turmeric was exported as against 12,361.20 in March 2021 showing an increase of 22%. In the month of April 2022 around 13,762.59 tonnes of turmeric was exported as against 13,282.53 in April 2021 showing an increase of 4%. In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 7874.15 Rupees dropped -187.7 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 16.76% to settled at 15225 while prices down -102 rupees, now Turmeric is getting support at 7822 and below same could see a test of 7758 levels, and resistance is now likely to be seen at 7984, a move above could see prices testing 8082.
Trading Ideas:
* Turmeric trading range for the day is 7758-8082.
* Turmeric dropped on profit booking amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* However, downside seen limited as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* In the month of April 2022 around 13,762.59 tonnes turmeric was exported as against 15,751.54 in March 2022 showing a decline of 13%.
* In Nizamabad, a major spot market in AP, the price ended at 7874.15 Rupees dropped -187.7 Rupees.

Jeera
Jeera yesterday settled up by 0.44% at 22895 as in Gujarat and Rajasthan markets arrivals have remained low. Big traders and stockiest have been holding to stocks anticipating further increase in prices. Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Mar) has declined by 32 percent at 2.17 lakh tonnes as compared to 2.86 lakh tonnes exported during 2020-21. In the month of April 2022 around 10,707.38 tonnes cumin seed exported as against 14,595.43 in March 2022 showing a decline of 27%. In view of the international situation of cumin seeds, all the countries of the whole world are not in a position to get cumin from a single country except India. Syria's crop is reported to have come absolutely negligible in the event of drought. Turkey has exited the international cumin market for the last 2 years. In Afghanistan, cumin has grown by 40 to 50% of the current year. Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival. China's demand for cumin is currently sporadic, with China buying 300 containers of Indian cumin in the month of June, the demand is very low at the moment. In Unjha, a key spot market in Gujarat, jeera edged up by 358.6 Rupees to end at 22450.75 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 3.91% to settled at 12195 while prices up 100 rupees, now Jeera is getting support at 22680 and below same could see a test of 22460 levels, and resistance is now likely to be seen at 23055, a move above could see prices testing 23210.
Trading Ideas:
* Jeera trading range for the day is 22460-23210.
* Jeera prices gained as in Gujarat and Rajasthan markets arrivals have remained low.
* Syria's crop is reported to have come absolutely negligible in the event of drought.
* Iran's cumin crop has been cut short and the crop there has been over within a few days of arrival.
* In Unjha, a key spot market in Gujarat, jeera edged up by 358.6 Rupees to end at 22450.75 Rupees per 100 kg.

Cotton
Cotton yesterday settled down by -0.61% at 42140 after WASDE report showed the global 2022/23 cotton balance sheet, ending stocks are higher than projected in June, despite a 1.2 million bale cut to expected production. Beginning stocks are higher, as 2021/22 consumption is cut nearly 2.0 million bales and projected consumption in 2022/23 is also reduced by 1.6 million. While China accounts for half of the month-to-month decline in 2021/22 consumption, the change in 2022/23 consumption is spread over 4 major consumers: China, India, Bangladesh, and Vietnam. World trade is cut 1.1 million bales, with reduced imports by China, Bangladesh, and Vietnam. Global ending stocks are projected 1.5 million bales higher than in June, and about equal to the 2021/22 level. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. U.S. production is projected 1 million bales lower than in June, at 15.5 million. U.S. exports are also projected lower, down 500,000 bales to 14.0 million reflecting both lower U.S. production and a reduction in world trade. At 2.4 million bales, 2022/23 U.S. ending stocks are now expected to be 1 million bales lower than in 2021/22. In spot market, Cotton dropped by -540 Rupees to end at 41980 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -2.9% to settled at 1274 while prices down -260 rupees, now Cotton is getting support at 41550 and below same could see a test of 40950 levels, and resistance is now likely to be seen at 42600, a move above could see prices testing 43050.
Trading Ideas:
* Cotton trading range for the day is 40950-43050.
* Cotton dropped after WASDE report showed the global 2022/23 cotton balance sheet, ending stocks are higher than projected in June
* Global ending stocks are projected 1.5 million bales higher than in June, and about equal to the 2021/22 level.
* The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month.
* In spot market, Cotton dropped  by -540 Rupees to end at 41980 Rupees.

- www.kediaadvisory.com

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