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Gold
Gold yesterday settled down by -2.01% at 50664 after the dollar strengthened and Treasury yields rose as data showing surging inflation in the U.S. fuelled bets for steeper rate hikes from the Federal Reserve. Data showed U.S. consumer prices accelerated in May, marking its largest annual increase in nearly 40-1/2 years, suggesting that the Fed could continue with its 50 basis points interest rate hikes through September to combat inflation. While inflation worries normally support gold, expected rate hikes to combat the rising prices tend to boost the dollar and reduce the appeal of non-yielding bullion. Benchmark U.S. 10-year Treasury yields rose to their highest level since 2018 on Monday, while the dollar hit a one-month high. Meanwhile, the ECB will end asset purchases on July 1st, followed by a 25 bps rate hike. The central bank also signalled a bigger rate increase could be necessary in September if the inflation outlook deteriorates. Dealers in India were offering a discount of up to $10 an ounce over official domestic prices up from the last week's discount of $9. In China, gold was being sold at a discount of $1.5 to a premium of $0.5 an ounce versus global benchmark spot rates. Technically market is under long liquidation as market has witnessed drop in open interest by -6.94% to settled at 13443 while prices down -1037 rupees, now Gold is getting support at 50256 and below same could see a test of 49849 levels, and resistance is now likely to be seen at 51365, a move above could see prices testing 52067.
Trading Ideas:
* Gold trading range for the day is 49849-52067.
* Gold fell after the dollar strengthened and Treasury yields rose as data showing surging inflation in the U.S. fuelled bets for steeper rate hikes from Fed.
* Benchmark U.S. 10-year Treasury yields rose to their highest level since 2018 on Monday, while the dollar hit a one-month high
* Meanwhile, the ECB will end asset purchases on July 1st, followed by a 25 bps rate hike.

Silver
Silver yesterday settled down by -2.61% at 60311 as investors became increasingly worried about the economic outlook and more aggressive tightening moves by the US Fed. Red-hot US inflation data lifted the dollar and Treasury yields and dented demand for the safe-haven bullion. The global economic outlook remains clouded by the war in Ukraine, rising borrowing costs, ongoing supply disruptions, and high commodity prices. The Federal Reserve is set to continue its tightening path this week after headline inflation rose to 41-year highs in May. Other central banks around the world including the ECB and the RBA have also set a more hawkish tone, as inflation is not showing signs of peaking. US consumer prices unexpectedly accelerated to a fresh 40-year high of 8.6% in May, raising the likelihood that the Federal Reserve would continue with its 50-basis point rate hikes through September to combat inflation. Meanwhile, gold briefly disconnected itself from moving inversely to the dollar on Friday as risk aversion dominated markets amid concerns over a potential blow to the US economy from aggressive monetary tightening. The CPI data served as a wake-up call to financial markets that inflation remains entrenched and has real upside risks. Technically market is under fresh selling as market has witnessed gain in open interest by 25% to settled at 15040 while prices down -1618 rupees, now Silver is getting support at 59442 and below same could see a test of 58573 levels, and resistance is now likely to be seen at 61440, a move above could see prices testing 62569.
Trading Ideas:
* Silver trading range for the day is 58573-62569.
* Silver fell as investors became increasingly worried about the economic outlook and more aggressive tightening moves by the US Fed.
* Red-hot US inflation data lifted the dollar and Treasury yields and dented demand for the safe-haven bullion.
* The Federal Reserve is set to continue its tightening path this week after headline inflation rose to 41-year highs in May.

Crude oil
Crude oil yesterday settled up by 0.47% at 9443 as concerns about global supplies outweighed demand worries. Oil prices fell earlier in the day as a surge in coronavirus cases in China raised concerns about the outlook for energy demand. U.S. commercial crude oil inventories rose unexpectedly last week, while crude in the Strategic Petroleum Reserve fell by a record amount as refiners ramped up production to pre-pandemic levels, the Energy Information Administration said. Crude inventories rose by 2 million barrels in the week to June 3 to 416.8 million barrels, compared with expectations for a 1.9 million-barrel drop. SPR crude stocks fell by a record 7.3 million barrels to 519.3 million, their lowest since March 1987. EIA projected crude production will rise to 11.92 million barrels per day (bpd) in 2022 and 12.97 million bpd in 2023 from 11.19 million bpd in 2021. The agency also projected petroleum and other liquid fuels consumption would rise from 19.78 million bpd in 2021 to 20.53 million bpd in 2022 and 20.73 million bpd in 2023. Money managers cut their net long U.S. crude futures and options positions in the week to June 7, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 1,674 contracts to 284,171 during the period. Technically market is under short covering as market has witnessed drop in open interest by -29.35% to settled at 8324 while prices up 44 rupees, now Crude oil is getting support at 9243 and below same could see a test of 9042 levels, and resistance is now likely to be seen at 9588, a move above could see prices testing 9732.
Trading Ideas:
* Crude oil trading range for the day is 9042-9732.
* Crudeoil gains as concerns about global supplies outweighed demand worries.
* U.S. commercial crude oil inventories rose unexpectedly last week, while crude in the Strategic Petroleum Reserve fell by a record amount
* U.S. crude output and petroleum demand to rise in 2022 – EIA

Natural Gas
Nat.Gas yesterday settled down by -3.12% at 671.8 as the shutdown of the Freeport liquefied natural gas (LNG) export plant last week cut U.S. demand for gas, leaving more of the fuel available to refill low stockpiles. The Freeport shutdown and cooler weather from thunderstorms also helped prevent peak power demand in Texas from breaking the all-time high so far. U.S. storage was currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019. Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 94.8 bcfd so far in June from 95.1 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected that average U.S. gas demand, including exports, would rise from 89.4 bcfd this week to 93.0 bcfd for the next two weeks. The forecast for this week was lower than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants fell to 12.2 bcfd so far in June from 12.5 bcfd in May, according to data from Refinitiv. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.6 bcfd of gas into LNG. Technically market is under long liquidation as market has witnessed drop in open interest by -15.91% to settled at 4510 while prices down -21.6 rupees, now Natural gas is getting support at 653.2 and below same could see a test of 634.6 levels, and resistance is now likely to be seen at 693.8, a move above could see prices testing 715.8.
Trading Ideas:
* Natural gas trading range for the day is 634.6-715.8.
* Natural gas slid as the shutdown of the Freeport LNG export plant cut U.S. demand for gas, leaving more of the fuel available to refill low stockpiles.
* U.S. storage was currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019.
* EIA said utilities added 97 bcf of gas to storage during the week ended June 3.

Copper
Copper yesterday settled down by -1.67% at 763.5 as pressure seen after copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 18.7 percent from last release on Jun 02, the exchange said. Shanghai and Beijing went back on fresh COVID-19 alert after parts of China's largest economic hub imposed new lockdown restrictions and the city announced a round of mass testing for millions of residents. Risky assets also fell as the European Central Bank's rate-hike outlook unnerved investors amid heightened concerns about global slowdown. China's factory-gate inflation cooled in May, official data showed, depressed by weak demand for steel, aluminium and other key industrial commodities due to tight COVID-19 curbs. The producer price index (PPI) rose 6.4% year-on-year, the National Bureau of Statistics (NBS) said in a statement, after the 8.0% rise in April, and in line with forecasts. It was the weakest reading since March 2021. The consumer price index (CPI) gained 2.1% from a year earlier in May, in line with April's growth. The world's second-largest economy has slowed significantly in recent months, hit by strict COVID-19 controls, disrupting supply chains and jolting production and consumption. A group of indigenous Peruvian communities agreed to temporarily lift a protest against MMG Ltd's Las Bambas copper mine that forced the company to halt operations for more than 50 days, the longest in the mine's history. Technically market is under fresh selling as market has witnessed gain in open interest by 4.03% to settled at 4180 while prices down -13 rupees, now Copper is getting support at 756.5 and below same could see a test of 749.4 levels, and resistance is now likely to be seen at 772.7, a move above could see prices testing 781.8.
Trading Ideas:
* Copper trading range for the day is 749.4-781.8.
* Copper prices dropped as pressure seen after copper inventories in SHFE warehouses rose by 18.7 percent.
* Shanghai and Beijing went back on fresh COVID-19 alert after parts of China's largest economic hub imposed new lockdown restrictions
* Peru communities to allow Las Bambas mine restart after 51-day shutdown

Zinc
Zinc yesterday settled down by -1.62% at 315.75 as renewed COVID-19 restrictions in top consumer China rekindled demand worries. Risky assets also fell as the European Central Bank's rate-hike outlook unnerved investors amid heightened concerns about global slowdown. Total zinc inventories across seven major markets in China stood at 231,800 mt as of June 10, down 3,100 mt from June 6 and 6,800 mt from June 2. Overall, the inventory in the seven markets continued to decrease. China’s refined zinc output was 515,200 mt in May, an increase of 19,700 mt or 3.97% MoM and an increase of 4.16% YoY, SMM data showed. From January to May 2022, the combined refined zinc output is estimated to be 2.483 million mt, a decrease of 1.09% year on year. Survey showed that China's refined zinc output in May basically has met expectations. The output increased mainly because a large smelter in Yunnan resumed the production after maintenance. Meanwhile, some smelters in Shaanxi and Sichuan and a smelter in Inner Mongolia raised their operating rates, and some small smelters in Guangxi returned to normal production. China's annual inflation rate was at 2.1% in May 2022, unchanged from April's five month high figure and compared with market forecasts of 2.2%. Technically market is under fresh selling as market has witnessed gain in open interest by 0.36% to settled at 1125 while prices down -5.2 rupees, now Zinc is getting support at 310.2 and below same could see a test of 304.5 levels, and resistance is now likely to be seen at 321, a move above could see prices testing 326.1.
Trading Ideas:
* Zinc trading range for the day is 304.5-326.1.
* Zinc prices dropped as renewed COVID-19 restrictions in top consumer China rekindled demand worries.
* Risky assets also fell as the European Central Bank's rate-hike outlook unnerved investors amid heightened concerns about global slowdown.
* Goldman Sachs lowered its 2022 growth forecast to 4% from 4.5%, below China's official target of around 5.5%.

Aluminium
Aluminium yesterday settled down by -1.88% at 223.85 as there are new actions concerning pandemic prevention control in China, which affected the market sentiment. The market digested ECB interest rate resolution, and falling Euro shored up the US dollar index, pressuring non-ferrous metals. On the supply side, aluminium output kept rising, weighing on aluminium prices. The stimulus packages boosted the market confidence, but it will take some time before the demand picks up substantially. Near-term market was still cautious on the scandal of repeated pledges on aluminium ingot stocks. China's factory-gate inflation cooled to its slowest pace in 14 months in May, official data showed, depressed by weak demand for steel, aluminium and other key industrial commodities due to tight COVID-19 curbs. The producer price index (PPI) rose 6.4% year-on-year, the National Bureau of Statistics (NBS) said in a statement, after the 8.0% rise in April, and in line with forecasts. It was the weakest reading since March 2021. China's annual inflation rate was at 2.1% in May 2022, unchanged from April's five-month high figure and compared with market forecasts of 2.2%. Prices of food rose the most since September 2020, up for the second straight month (2.3% vs 1.9% in April), as consumption strengthened following an easing of COVID-19 curbs in key cities, including Shanghai and Beijing. Technically market is under fresh selling as market has witnessed gain in open interest by 0.06% to settled at 3174 while prices down -4.3 rupees, now Aluminium is getting support at 220.4 and below same could see a test of 217 levels, and resistance is now likely to be seen at 227.4, a move above could see prices testing 231.
Trading Ideas:
* Aluminium trading range for the day is 217-231.
* Aluminium dropped as there are new actions concerning pandemic prevention control in China, affected the market sentiment
* China's factory-gate inflation cooled to its slowest pace in 14 months in May, official data showed
* China's annual inflation rate was at 2.1% in May 2022, unchanged from April's five-month high figure

Mentha oil
Mentha oil yesterday settled up by 1.03% at 1033.7 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 dropped by -19.2 Rupees to end at 1156 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -7.01% to settled at 822 while prices up 10.5 rupees, now Mentha oil is getting support at 1016.3 and below same could see a test of 998.8 levels, and resistance is now likely to be seen at 1048, a move above could see prices testing 1062.2.
Trading Ideas:
* Mentha oil trading range for the day is 998.8-1062.2.
* In Sambhal spot market, Mentha oil dropped  by -19.2 Rupees to end at 1156 Rupees per 360 kgs.
* Mentha oil gains 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.
* However, downside seen limited amid low production this season and improving demand post-pandemic.

Turmeric
Turmeric yesterday settled down by -0.89% at 8050 amid reports of sufficient stocks and good sowing progress in south India. The arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes while for the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average. Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased. Kocha arrivals are good at markets in Sangli, Hingoli and Nanded regions in Maharashtra. Due to aggressive coverages by oleoresin companies, prices were steady during the month. Panangali arrivals have started in Salem, Erode and Gundalpet markets. 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 8193.95 Rupees dropped -65.6 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 20.37% to settled at 14745 while prices down -72 rupees, now Turmeric is getting support at 7986 and below same could see a test of 7920 levels, and resistance is now likely to be seen at 8164, a move above could see prices testing 8276.
Trading Ideas:
* Turmeric trading range for the day is 7920-8276.
* Turmeric dropped amid reports of sufficient stocks and good sowing progress in south India.
* As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes
* For the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes.
* In Nizamabad, a major spot market in AP, the price ended at 8193.95 Rupees dropped -65.6 Rupees.

Jeera
Jeera yesterday settled up by 0.21% at 21390 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving. Similarly, in Rajasthan also daily arrivals have remained weak, in Jodhpur market around 1,500 bags, at Nagaur 500 bags and other centres 500 bags arrivals noted. In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year. The arrival of cumin in Rajasthan has been only 50% in the peak season in the current year as compared to the previous years as the crop was less. There was a drought in Turkey and Syria and due to state tensions, the sowing of cumin seeds has been reported to be very low. Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan. In Unjha, a key spot market in Gujarat, jeera edged up by 290.3 Rupees to end at 21494.75 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 10.18% to settled at 13731 while prices up 45 rupees, now Jeera is getting support at 21240 and below same could see a test of 21085 levels, and resistance is now likely to be seen at 21590, a move above could see prices testing 21785.
Trading Ideas:
* Jeera trading range for the day is 21085-21785.
* Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
* In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year.
* Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan.
* In Unjha, a key spot market in Gujarat, jeera edged up by 290.3 Rupees to end at 21494.75 Rupees per 100 kg.

Cotton
Cotton yesterday settled down by -0.79% at 46600 after USDA for 2022/23 raised its global production estimates. The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections compared with the previous month, and ending stocks are virtually unchanged. Global consumption is 450,000 bales lower, with the largest declines in Mexico, Bangladesh, and Vietnam. Beginning stocks for 2022/23 are also lower this month as a 1.5-million-bale decline in 2021/22 global production more than offsets a 1.25-million-bale decline in projected consumption. A 1.0- million-bale drop in India’s crop accounts for most of the production change, with lower yield expectations in Brazil accounting for the remainder. Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam. There were reports of 18 per cent less area under cotton sown than last year in Punjab. Despite the Punjab government setting a target to have 4 lakh hectares under cotton to reduce land under paddy, the state has witnessed an 18 per cent decrease from last year, when about 3.03 lakh hectares of the then targeted 3.25 lakh hectares were under cotton. Till now, cotton was sown on only 2.48 lakh hectares of land; the cotton sowing is almost over. In spot market, Cotton dropped by -620 Rupees to end at 47470 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -2.74% to settled at 2410 while prices down -370 rupees, now Cotton is getting support at 46340 and below same could see a test of 46090 levels, and resistance is now likely to be seen at 46800, a move above could see prices testing 47010.
Trading Ideas:
* Cotton trading range for the day is 46090-47010.
* Cotton prices dropped after USDA for 2022/23 raised its global production estimates.
* The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections
* Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam.
* In spot market, Cotton dropped  by -620 Rupees to end at 47470 Rupees.

- www.kediaadvisory.com

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