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Gold

Gold yesterday settled down by -0.67% at 59460 in the wake of better U.S. economic data that falls into the camp of the U.S. monetary policy hawks. A surging U.S. dollar index and rising U.S. Treasury yields are also bearish outside market elements working against the precious metals. The second estimate of first-quarter U.S. GDP
came in better than expected, at up 1.3% versus expectations of up 1.1% and
compares to the first GDP reading of up 1.1%. Also, weekly U.S. jobless claims
came in well below market expectations. The marketplace is getting more anxious as U.S. lawmakers and the Biden administration have not come to an agreement to extend the government debt limit. However, House speaker McCarthy moments ago said negotiators are making some progress on the matter. U.S. Treasury Secretary Yellen has said the government could run out of money by June 1. Reports said the Fitch credit-rating agency put the U.S. on watch for a possible downgrade. ""Fitch still expects a resolution to the debt limit before the X-date (1 June),” the credit agency said in a report. Both Fitch and Moody's currently rate the U.S. debt at top AAA and Aaa, respectively, while S&P ranks it at AA+ after a downgrade in 2011 amid debt-ceiling negotiations during that time. Technically market is under long liquidation as the market has witnessed a drop in open interest by -18.37% to settle at 6284 while prices are down -400 rupees, now Gold is getting support at 59231 and below same could see a test of 59001 levels, and resistance is now likely to be seen at 59823, a move above could see prices testing 60185."

Trading Ideas:
* Gold trading range for the day is 59001-60185.
* Gold dropped after data showed better U.S. economic data
* A surging U.S. dollar index and rising U.S. Treasury yields are also bearish
* The second estimate of first-quarter U.S. GDP came in better than expected

Silver

Silver yesterday settled down by -1.19% at 70242 pressured by a rise in Treasury yields and the US dollar. The debt ceiling impasse continued to weigh on investors' mood with Fitch Ratings putting the US on credit watch for a possible downgrade. House Speaker McCarthy said today that negotiators have made some progress and that he instructed his team to work 24 hours to get the deal. The FOMC minutes revealed that some officials saw the need for more rate hikes while others anticipated that a deceleration in growth would eliminate the requirement for further tightening. The number of Americans filing for unemployment benefits rose to 229 thousand in the week ending May 20th, slightly up from an over two-month low of 225 thousand the week before but well below market expectations of 245 thousand. The latest data suggested that the labor market in the United States remains relatively robust and constrained, which could potentially result in upward pressure on wages and present an opportunity for the Federal Reserve to consider additional interest rate hikes as part of its measures to address inflation. The US economy grew by an annualized 1.3% on quarter in Q1 2023, slightly higher than 1.1% in the advance estimate and market forecasts of 1.1%. Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.38% to settle at 14712 while prices are down -844 rupees, now Silver is getting support at 69881 and below same could see a test of 69521 levels, and resistance is now likely to be seen at 70876, a move above could see prices testing 71511.

Trading Ideas:
* Silver trading range for the day is 69521-71511.
* Silver prices dropped pressured by a rise in Treasury yields and the US dollar.
* The FOMC minutes revealed that some officials saw the need for more rate hikes
* The debt ceiling impasse continued to weigh on investors' mood

Crude oil

Crude oil yesterday settled down by -2.7% at 5946 as concerns about additional output cuts from OPEC+ eased. Russian Prime Minister Alexander Novak said OPEC+ is unlikely to take additional steps in June because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries. Early this week, Saudi Arabia’s energy minister warned short sellers to “watch out” for potential consequences, raising speculations that OPEC+ could consider further output cuts at a meeting on June 4th. Meanwhile, a rise in the US dollar amid uncertainty over the debt ceiling also pressured oil prices down. On the other hand, EIA data pointed to a recovery in US demand ahead of the driving-intensive Memorial Day weekend holiday. US crude inventories unexpectedly declined by 12.456 million barrels last week, the largest drop in six months. Crude inventories fell by 12.5 million barrels in the week to May 19 to 455.2 million barrels, compared with expectations for a 800,000-barrel rise. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.8 million barrels in the week, the EIA said. Refinery crude runs rose by 79,000 barrels per day, while refinery utilization rates fell by 0.3 percentage point in the week. Technically market is under fresh selling as the market has witnessed a gain in open interest by 47.21% to settle at 11200 while prices are down -165 rupees, now Crude oil is getting support at 5845 and below same could see a test of 5743 levels, and resistance is now likely to be seen at 6104, a move above could see prices testing 6261.

Trading Ideas:
* Crude oil trading range for the day is 5743-6261.
* Crude oil dropped as concerns about additional output cuts from OPEC+ eased.
* Russian Prime Minister Alexander Novak said OPEC+ is unlikely to take additional steps in June
* A rise in the US dollar amid uncertainty over the debt ceiling also pressured oil prices down.

Natural gas

Nat.Gas yesterday settled down by -4.21% at 202.7 amid record U.S. output, rising Canadian exports and forecasts for milder U.S. weather and lower demand over the next two weeks than previously expected. US utilities added 96 billion cubic feet (bcf) of gas into storage during the week ended May 19, 2023, below market expectations of a 100 bcf increase. Last week's increase boosted stockpiles to 2.336 trillion cubic feet (tcf), 529 bcf higher than last year at this time and 340 bcf above the five-year average of 1.996 bcf. At 2.336 tcf, total working gas is within the five-year historical range. Ample storage levels, milder weather and a boost in production are likely to place downward pressure on US natural gas prices this summer, even as demand is seen reaching record levels, the Natural Gas Supply Association (NGSA) said. The NGSA in its annual Summer Outlook said benchmark prices at the Henry Hub could average below last year's $7.10 per million British thermal units (mmBtu) for April through October. That is despite projections for customer demand to average a record-setting 97 billion cubic feet per day (bcfd), rising 3% from last summer, mainly in the power burn and export sectors, the association said. Technically market is under fresh selling as the market has witnessed a gain in open interest by 43.03% to settle at 26697 while prices are down -8.9 rupees, now Natural gas is getting support at 198.2 and below same could see a test of 193.7 levels, and resistance is now likely to be seen at 211.2, a move above could see prices testing 219.7.

Trading Ideas:
* Natural gas trading range for the day is 193.7-219.7.
* Natural gas dropped amid record U.S. output, rising Canadian exports
* US utilities added 96 bcf of gas into storage, below market expectations of a 100 bcf increase.
* Higher inventories, output to weigh on US natgas prices this summer

Copper

Copper yesterday settled up by 0.61% at 702.6 as support seen after the People’s Bank of China conducted a seven-day reverse repurchase operation of 7 billion yuan, and the winning bid rate was 2.00%. Although there is no substantial progress in the US debt ceiling negotiations at this stage, an agreement has been reached that there will be no default. The debt ceiling may not be adjusted, but the principal and interest will be paid first. The global refined copper market saw a 332,000 tonne surplus in the first quarter, compared with an 8,000 tonne surplus in the corresponding period last year, the International Copper Study Group (ICSG) said in its latest monthly bulletin on Tuesday. World refined copper output rose 7.5% in the quarter to 6.69 million tonnes while usage was estimated 2.3% higher at 6.35 million tonnes, the ICSG said. The global refined copper market had a 2,000 tonne surplus in March, compared with a 196,000 tonne surplus the previous month, it said. The mine supervisor union for Chile's Centinela mine, operated by mining company Antofagasta, accepted contract negotiations to avoid a strike, the union said. Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.59% to settle at 7226 while prices are up 4.25 rupees, now Copper is getting support at 696.8 and below same could see a test of 691 levels, and resistance is now likely to be seen at 707.4, a move above could see prices testing 712.2.

Trading Ideas:
* Copper trading range for the day is 691-712.2.
* Copper prices gained after China makes huge cash injection
* Union at Chile's Centinela copper mine accepts offer to avoid strike
* World refined copper market in 2,000 tonne surplus in March –ICSG

Zinc

Zinc yesterday settled down by -1.69% at 206.25 as Zinc inventories in London Metal Exchange (LME) registered warehouses jumped 40% to 61,025 tonnes, data published by the exchange showed. Rising stocks suggest the material isn't needed and surpluses are being deposited in LME warehouses. Deliveries of 18,050 tonnes of the metal used to galvanise steel were made to LME warehouses in Singapore, taking total zinc stocks in that location to 50,250 tonnes. Overall, LME zinc stocks have climbed more than 300% since early February, easing worries about availability on the LME market and creating a discount for the cash contact over the three-month contract. The discount closed at $7 a tonne compared with a premium of about $30 a tonne at the end of March. The global zinc market surplus climbed to 26,700 tonnes in March, from a surplus of 22,800 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. During the first three months of 2023, ILZSG data showed a surplus of 49,000 tonnes, versus a surplus of 116,000 tonnes in the same period of 2022. According to the General Administration of Customs on May 22, China imported 15,676.61 mt of refined zinc in April, an increase of 22.61% month-on-month and a sharp growth of 920.84% year-on-year. Technically market is under fresh selling as the market has witnessed a gain in open interest by 17.97% to settle at 4411 while prices are down -3.55 rupees, now Zinc is getting support at 203.7 and below same could see a test of 201 levels, and resistance is now likely to be seen at 209.5, a move above could see prices testing 212.6.

Trading Ideas:
* Zinc trading range for the day is 201-212.6.
* Zinc prices dropped as inventories in LME warehouses jump 40%
* Global zinc market surplus rises to 26,700 tonnes in March – ILZSG
* China refined zinc imports soared 921% in April

Aluminium

Aluminium yesterday settled up by 0.36% at 206.7 on low level recovery after prices dropped amid growing concerns over the performance of major economies and a strong U.S. dollar. Demand outlook has darkened for the metal used widely in construction, power and transportation sectors, as China's economic recovery falters. London Metal Exchange (LME) inventories of aluminium jumped by over 20,000 tonnes in Gwangyang, South Korea, a location that has seen large gains in recent months, data showed on Tuesday. The LME said its daily inventory report failed to show a delivery of 16,125 tonnes of aluminium T-bars into warehouses in Gwangyang, due to an error, but the totals were correct. The total showed aluminium inventories in Gwangyang in warehouses certified by the LME surged by 20,875 tonnes, bring the total in all global LME storage facilities to 575,875 tonnes. Gwangyang is a key location for aluminium storage, making up 41% of total LME inventories. Since March 1, aluminium stored in the port has jumped by 38%. It was unclear the source of the current arrivals into Gwangyang. Higher stocks of Russian aluminium, produced by Rusal, on the LME are a concern for producers as they could weigh on benchmark aluminium prices used as references in contracts between buyers and sellers. Technically market is under fresh buying as the market has witnessed a gain in open interest by 9.11% to settle at 2791 while prices are up 0.75 rupees, now Aluminium is getting support at 205.3 and below same could see a test of 203.9 levels, and resistance is now likely to be seen at 207.9, a move above could see prices testing 209.1.

Trading Ideas:
* Aluminium trading range for the day is 203.9-209.1.
* Aluminium gains on low level recovery after prices dropped on strong dollar.
* LME aluminium stocks climb by over 20,000 T in South Korea
* Global aluminium output up 0.3% y/y to 5.6 mln T in April – IAI

Mentha oil

Mentha oil yesterday settled down by -0.6% at 961.6 on better sowing conditions in UP and Bihar and weak export demand. The recent period of rain in Uttar Pradesh and Bihar has been beneficial to planting efforts. The forecast of above-average rainfall in May would be beneficial to Mentha seeding efforts. Rising menthol imports, as well as China's limited purchasing, will put pressure on pricing. Mentha exports during Apr-Mar 2023, dropped by 10.39 percent to 2,430.49 tonnes as compared to 2,712.39 tonnes exported during Apr-Mar 2022. In March 2023 around 202.95 tonnes of Mentha was exported as against 210.78 tonnes in February 2023 showing a drop of 3.71%. In March 2023 around 202.95 tonnes of Mentha was exported as against 218.78 tonnes in March 2022 showing a drop of 7.24%. 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 -4 Rupees to end at 1128 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.77% to settle at 568 while prices are down -5.8 rupees, now Mentha oil is getting support at 958.5 and below same could see a test of 955.3 levels, and resistance is now likely to be seen at 966.9, a move above could see prices testing 972.1.

Trading Ideas:
* Mentha oil trading range for the day is 955.3-972.1.
* In Sambhal spot market, Mentha oil dropped  by -4 Rupees to end at 1128 Rupees per 360 kgs.
* Menthaoil dropped on better sowing conditions and weak export demand
* The forecast of above-average rainfall in May would be beneficial to Mentha seeding efforts.
* Rising menthol imports, as well as China's limited purchasing, will put pressure on prices.

Turmeric

Turmeric yesterday settled down by -0.51% at 8148 on profit booking in expectation of rise in domestic supplies. Traders are also showing lesser interest at prevailing price levels and avoiding bulk buying in expectation of fall in prices. Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce. Losses in prices are looking limited due to weaker production prospects supported by delayed monsoon forecast. India Meteorological Department projected onset of monsoon is likely to be delayed by three days. The southwest monsoon, which normally sets in over Kerala on June 1, is likely to arrive on June 4. Turmeric exports during Apr-Mar 2023, rose by 11.34 percent at 170,085.36 tonnes as compared to 152,757.59 tonnes exported during Apr- Mar 2022. In March 2023 around 18,810.47 tonnes of turmeric was exported as against 14,806.30 tonnes in February 2023 showing a rise of 27.04%. In March 2023 around 18,810.47 tonnes of turmeric was exported as against 15,740.36 tonnes in March 2022 showing a rise of 19.50%. 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 7482.45 Rupees gained 28.65 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.34% to settle at 13220 while prices are down -42 rupees, now Turmeric is getting support at 8030 and below same could see a test of 7912 levels, and resistance is now likely to be seen at 8268, a move above could see prices testing 8388.

Trading Ideas:
* Turmeric trading range for the day is 7912-8388.
* Turmeric dropped on profit booking in expectation of rise in domestic supplies.
* Traders are also showing lesser interest at prevailing price levels and avoiding bulk buying in expectation of fall in prices.
* Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce.
* In Nizamabad, a major spot market in AP, the price ended at 7482.45 Rupees gained 28.65 Rupees.

Jeera

Jeera yesterday settled down by -2.2% at 43710 amid profit booking with increase in seasonal supply. Surging imports of jeera at cheaper rate is also keeping market sentiments down. Marginal traders are avoiding bulk buying in anticipation of rise in seasonal supply of jeera in Gujarat and Rajasthan. The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers. The jeera growing regions in southern and north-western parts of Rajasthan in the districts of Alwar, Jaisalmer, Jaipur, Bikaner, Bhilwara, and Barmer have received a fresh spell of unseasonal rains in the past week, triggering concerns on the crop condition. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. One bag holds 55kg. This will result in a demand-supply imbalance. Currently, at least 70% of the crop in Rajasthan and around 30% in Gujarat have yet to be harvested. Because of the rain in both states, the total yield will be reduced. The cumin crop was destroyed by two bouts of unseasonal rainfall during the harvest season. In comparison to the planned arrival of 70 lakh bags, the stock will be reduced to 60-65 lakh bags, with a carry-forward stock of 5 lakh bags from last year. In Unjha, a key spot market in Gujarat, jeera edged down by -534.95 Rupees to end at 45681.4 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.17% to settle at 7800 while prices are down -985 rupees, now Jeera is getting support at 43220 and below same could see a test of 42735 levels, and resistance is now likely to be seen at 44470, a move above could see prices testing 45235.

Trading Ideas:
* Jeera trading range for the day is 42735-45235.
* Jeera prices dropped amid profit booking with increase in seasonal supply.
* Prices rose on crop worries grow due to unseasonal rains and hailstorms in Rajasthan.
* The market is expecting a lower yield and quality of jeera this season
* In Unjha, a key spot market in Gujarat, jeera edged down by -534.95 Rupees to end at 45681.4 Rupees per 100 kg.

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