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Gold
Gold yesterday settled up by 0.79% at 51269 as dismal US economic data spooked investors away from the greenback. The ADP report showed that US companies added the fewest number of jobs since the pandemic recovery began, pointing to a slowdown in the economy and suggesting the Fed could be less hawkish. This weakness has been seen across the board, but some of the most pronounced selling activity was against commodity-linked currencies, such as the New Zealand and Australian dollars. The U.S. policymakers have signalled a 50 basis point interest rate rise this month and next, the outlook beyond that is uncertain. The Fed already walks a tight rope as it reins in historic inflation while not causing a recession. Factory orders in the US went up 0.2% from a month earlier to $533.2 billion in April of 2022, after a downwardly revised 1.8% gain in March and missing market forecast of a 0.7% rise. Orders slowed in industries producing both durables (0.5% vs 0.7% in March) and nondurable goods (0.2% vs 2.9%). However, in another employment report, the US Labor Department data showed that the number of Americans filing new claims for unemployment benefits continued to fall. The moves followed upbeat results from a closely watched survey of the US manufacturing sector. Technically market is under fresh buying as market has witnessed gain in open interest by 2.34% to settled at 14370 while prices up 404 rupees, now Gold is getting support at 50921 and below same could see a test of 50573 levels, and resistance is now likely to be seen at 51479, a move above could see prices testing 51689.

Trading Ideas:
* Gold trading range for the day is 50573-51689.
* Gold prices rose as dismal US economic data spooked investors away from the greenback.
* The ADP report showed that US companies added the fewest number of jobs since the pandemic recovery began
* The U.S. policymakers have signalled a 50 basis point interest rate rise this month and next, the outlook beyond that is uncertain.

Silver
Silver yesterday settled up by 1.23% at 62336 as inflation and recession worries persist. Persistent inflation remained an underlying theme supporting bullion prices, with the euro zone inflation data coming in much higher than expected. The number of Americans filing new claims for unemployment benefits unexpectedly fell last week as demand for labor remained strong, helping to underpin the economy amid rising interest rates and tightening financial conditions. The weekly unemployment claims report from the Labor Department, the most timely data on the economy's health, also showed state jobless benefits rolls declining to their lowest level since 1969 in the second-half of May. Demand for labor remains strong, though the Fed's Beige Book showed "one district explicitly reported that the pace of job growth had slowed," and that "some firms in most of the coastal districts noted hiring freezes or other signs that market tightness had begun to ease." Traders looked ahead to the European Central Bank's meeting next week, when the central bank is likely to offer additional clues on the pace and scale of interest rate hikes to fight inflation. Eurozone producer price inflation accelerated further to a new record high in April, data released by Eurostat showed. Producer prices advanced 37.2 percent on a yearly basis in April, faster than the 36.9 percent rise in March. Technically market is under short covering as market has witnessed drop in open interest by -14.13% to settled at 11321 while prices up 756 rupees, now Silver is getting support at 61641 and below same could see a test of 60946 levels, and resistance is now likely to be seen at 62733, a move above could see prices testing 63130.

Trading Ideas:
* Silver trading range for the day is 60946-63130.
* Silver rose as inflation and recession worries persist.
* Persistent inflation remained an underlying theme supporting bullion prices, with the euro zone inflation data coming in much higher than expected.
* The number of Americans filing new claims for unemployment benefits unexpectedly fell last week as demand for labor remained strong

Crude oil
Crude oil yesterday settled up by 0.36% at 9045 after U.S. crude inventories fell more than expected amid high demand for fuel, shrugging off OPEC+'s agreement to boost crude output to compensate for a drop in Russian production. OPEC+ agreed to boost crude output to compensate for a drop in Russian production. OPEC+ agreed to raise output by 648,000bps in both July and August, without announcing any extra increases to compensate Russian oil fallout. This comes after reports saying discussions were held about an immediate increase in output from Saudi Arabia and the UAE. Iran's oil production capacity is close to 4 million barrels per day and its natural gas capacity is at 1 billion cubic meters per day, the official IRNA news agency reported Oil Minister Javad Owji as saying. OPEC+ is working on compensating for a drop in Russian oil output, as Russia's production has fallen by around 1 million barrels per day in recent months as a result of Western sanctions on Moscow over Ukraine. One OPEC+ source familiar with the Russian position said Moscow could agree to other producers compensating for its lower output but it may not happen at a Thursday meeting and might not be in full. A Gulf OPEC+ source said a decision on the matter was "highly possible" at a meeting. Technically market is under short covering as market has witnessed drop in open interest by -9.14% to settled at 9131 while prices up 32 rupees, now Crude oil is getting support at 8760 and below same could see a test of 8475 levels, and resistance is now likely to be seen at 9214, a move above could see prices testing 9383.

Trading Ideas:
* Crude oil trading range for the day is 8475-9383.
* Crude oil gains after U.S. crude inventories fell more than expected amid high demand for fuel
* Russia is raising oil output in June, maintains cooperation with OPEC+ – Novak
* Iran's oil production capacity nears 4 mln bpd

Natural Gas
Nat.Gas yesterday settled down by -0.3% at 672.9 on a slightly bigger than expected storage build and forecasts for lower demand next week than previously expected. Power use in Texas reached the highest level on record for the month of May on Tuesday and will likely break the June record on Wednesday as economic growth boosts overall usage and hot weather causes homes and businesses to crank up their air conditioners U.S. natural gas production will have to accelerate significantly if the country is to keep growing record export volumes without creating shortages for consumers at home. Gas exports in the form of LNG were up by 674 billion cubic feet or 87% in the first three months of 2022 compared with the same period in 2019. Domestic consumption was flat over the same period, selected to span the pandemic, according to the latest monthly data compiled by the U.S. Energy Information Administration. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 95.1 billion cubic feet per day (bcfd) in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in December 2021. On a daily basis, however, output dropped by 2.8 bcfd to a preliminary 92.9 bcfd on Wednesday. Technically market is under long liquidation as market has witnessed drop in open interest by -1.74% to settled at 5871 while prices down -2 rupees, now Natural gas is getting support at 647.6 and below same could see a test of 622.4 levels, and resistance is now likely to be seen at 700.4, a move above could see prices testing 728.

Trading Ideas:
* Natural gas trading range for the day is 622.4-728.
* Natural gas slid on a slightly bigger than expected storage build and forecasts for lower demand next week than previously expected.
* U.S. gas production must accelerate to meet LNG export demand
* Barclays says U.S. natural gas output growth likely to remain subdued

Copper
Copper yesterday settled up by 3.56% at 807.4 buoyed by low inventories and prospects of higher demand following the ease of some Covid-19 curbs in top consumer China. China's central bank will strengthen the implementation of its prudent monetary policy and bring forward steps to support the economy, vice governor Pan Gonsheng said. The latest data showed China’s factory activity fell at a softer pace in May and China’s key commercial hub of Shanghai allowed all manufacturers to resume operations from June. Additionally, copper inventories in LME-registered warehouses fell by 6,250 tonnes to 156,175 tonnes at the end of last week, and those in warehouses monitored by the Shanghai Futures Exchange fell 23.7% from a week earlier. Copper inventories in warehouse monitored by the Shanghai Futures Exchange rose 4.3% from last week, the exchange said. Southern Copper Corp said a fire broke out at its Los Chancas mining project evening, around the same time as another fire started at MMG Ltd's Las Bambas copper mine, sources said. Global copper smelting activity ticked higher in May as a rebound in China offset declines in Europe and elsewhere, data from satellite surveillance of metal processing plants showed. Global copper supply will outpace demand over the next two years, helped by several upcoming large mine projects Technically market is under fresh buying as market has witnessed gain in open interest by 16.37% to settled at 4258 while prices up 27.75 rupees, now Copper is getting support at 786.6 and below same could see a test of 765.7 levels, and resistance is now likely to be seen at 818.9, a move above could see prices testing 830.3.

Trading Ideas:
* Copper trading range for the day is 765.7-830.3.
* Copper rose buoyed by low inventories and prospects of higher demand following the ease of some Covid-19 curbs in top consumer China.
* China’s key commercial hub of Shanghai allowed all manufacturers to resume operations from June.
* China central bank to step up policy implementation to support economy

Zinc
Zinc yesterday settled up by 1.84% at 336.9 amid easing pandemic situation and improving China manufacturing PMI. The central government is also detailing supporting policies, boosting market sentiment. Total zinc inventories across seven markets in China stood at 238,600 mt as of June 2, down 10,300 mt from May 30 and 12,400 mt from May 27. Overall, the inventory in the seven markets continued to decrease. In Shanghai, the arrivals have not improved, but the market was interested in picking up goods as Shanghai was lifted from the lockdown, leading to the decline in inventory. In Tianjin, the market remained stable, and downstream purchases picked up amid the increasing restocking demand before the Dragon Boat Festival holiday. China's central bank will strengthen the implementation of its prudent monetary policy and bring forward steps to support the economy, vice governor Pan Gonsheng said. The People's Bank of China (PBOC) will use various policy tools to step up liquidity injections to keep liquidity in the economy reasonably ample, Pan told. The central bank aims to stabilise economic growth, employment and prices, Pan said, adding that financial institutions should maintain prudence in their operations and prevent risks. "We will continue to strengthen the implementation of prudent monetary policy and create a sound monetary and financial environment," Pan said. Technically market is under fresh buying as market has witnessed gain in open interest by 4.45% to settled at 1245 while prices up 6.1 rupees, now Zinc is getting support at 332.2 and below same could see a test of 327.3 levels, and resistance is now likely to be seen at 340, a move above could see prices testing 342.9.

Trading Ideas:
* Zinc trading range for the day is 327.3-342.9.
* Zinc prices rose amid easing pandemic situation and improving China manufacturing PMI.
* China central government is also detailing supporting policies, boosting market sentiment.
* China central bank to step up policy implementation to support economy

Aluminium
Aluminium yesterday settled up by 1.21% at 234.05 as the lifting of COVID-19 restrictions in top metals consumer China buoyed hopes of demand recovery. Shanghai sprung back to life after two months of bitter isolation under a ruthless COVID-19 lockdown, with shops reopening and people going back to offices, parks and markets, hoping to never go through a similar ordeal again. China's aluminium production in April hit a record high after curbs on power production eased, with the country becoming a net exporter of the metal, with sales rising mainly to Europe. On the other hand, aluminum smelters in Europe continue to curtail production due to high energy costs, which was exacerbated by the Russian invasion of Ukraine. The aluminium ingot social inventories across China’s eight major markets totalled 882,000 mt as of June 2, down 55,000 mt from a week ago and 151,000 mt from the beginning of May. On the macro front, the Federal Reserve is set to shrink balance sheet starting from June. The US economy has shown signs of contracting, and it seems to be quite difficult to maintain economic growth while curb the inflation. The expectation of demand recovery in China has been strong, shoring up copper prices. But the process takes time. Technically market is under short covering as market has witnessed drop in open interest by -4.21% to settled at 3046 while prices up 2.8 rupees, now Aluminium is getting support at 231.7 and below same could see a test of 229.3 levels, and resistance is now likely to be seen at 235.8, a move above could see prices testing 237.5.

Trading Ideas:
* Aluminium trading range for the day is 229.3-237.5.
* Aluminium rose as the lifting of COVID-19 restrictions in top metals consumer China buoyed hopes of demand recovery.
* Aluminum smelters in Europe continue to curtail production due to high energy costs, which was exacerbated by the Russian invasion of Ukraine.
* China's aluminium production in April hit a record high after curbs on power production eased, with the country becoming a net exporter of the metal

Mentha oil
Mentha oil yesterday settled up by 0.87% at 1066.3 amid low production this season and improving demand post-pandemic. Support also seen with Rupee weakness export demand is going to be firm also post pandemic global demand is improving. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. 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. Prices gained on reports that due to poor prices farmers has shifted to other crops resulting lower production. 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. Mentha farming has lost its allure in Uttar Pradesh as farmers struggle without stable price, MSP and government support. High input costs and lack of support price have drastically brought down the return of farmers who have already been struggling to increase their incomes. In Sambhal spot market, Mentha oil dropped by -6.3 Rupees to end at 1186.5 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.9% to settled at 979 while prices up 9.2 rupees, now Mentha oil is getting support at 1058.7 and below same could see a test of 1051.2 levels, and resistance is now likely to be seen at 1071.1, a move above could see prices testing 1076.

Trading Ideas:
* Mentha oil trading range for the day is 1051.2-1076.
* In Sambhal spot market, Mentha oil dropped  by -6.3 Rupees to end at 1186.5 Rupees per 360 kgs.
* Mentha oil prices seen supported amid low production this season and improving demand post-pandemic.
* Synthetic Mentha supply remains uninterrupted.
* With Rupee weakness export demand is going to be firm also post pandemic global demand is improving.

Turmeric
Turmeric yesterday settled up by 0.51% at 7956 as the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. 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. Currently, export demand is normal but is expected to pick up. As per latest export figures, turmeric exports in Feb 2022 were lower by 17% y/y at 10400 tonnes vs 12,575 tonnes while in FY 2021/22 (Apr-Feb), exports down 20% at 1.37 lakh tons compared to last year but higher by 8.3% compared with 5-year average. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Export demand too reported sluggish despite report of some queries from Bangladesh. 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 8162.85 Rupees dropped -49.55 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.83% to settled at while prices up 40 rupees, now Turmeric is getting support at 7894 and below same could see a test of 7834 levels, and resistance is now likely to be seen at 7992, a move above could see prices testing 8030.

Trading Ideas:
* Turmeric trading range for the day is 7834-8030.
* Turmeric recovered from lows to end with gains as the arrivals of New season turmeric are diminishing and exports demand is improving.
* Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased.
* Turmeric harvesting in Indonesia is likely to start during June – July 2022 and crop is reported to be normal.
* In Nizamabad, a major spot market in AP, the price ended at 8162.85 Rupees dropped -49.55 Rupees.

Jeera
Jeera yesterday settled up by 0.45% at 21050 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. 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. Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected. Demand from China has declined due to higher domestic prices in India. Around 32,407 tonnes and 42,788 tonnes have been exported to Bangladesh and China respectively during 2021-22 (Apr-Feb). 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-Feb) has declined by 24 percent at 1.91 lakh tonnes as compared to 2.52 lakh tonnes exported last year same period. In the month of February 2022 around 12,988 tonnes cumin seed exported as against 17,114 in February 2021. In International markets, Indian Jeera is quoted around 2850 to 2950 dollar per tonnes. In Unjha, a key spot market in Gujarat, jeera edged up by 94.4 Rupees to end at 21369.45 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -4.25% to settled at while prices up 95 rupees, now Jeera is getting support at 20915 and below same could see a test of 20785 levels, and resistance is now likely to be seen at 21140, a move above could see prices testing 21235.

Trading Ideas:
* Jeera trading range for the day is 20785-21235.
* Jeera settled up because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
* Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected.
* Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving
* In Unjha, a key spot market in Gujarat, jeera edged up by 94.4 Rupees to end at 21369.45 Rupees per 100 kg.

Cotton
Cotton yesterday settled up by 1.35% at 45880 as the USDA lowered its forecasts for global cotton supplies in 2022/23, as smaller beginning stocks more than offset a 2.6-million-bale increase in production, while consumption and ending stocks were also projected down. At the same time, demand for cotton is seen weakening among the stockists and traders amid high inflationary pressures. The USDA lowered its forecasts for global cotton supplies in 2022/23, as smaller beginning stocks more than offset a 2.6-million-bale increase in production, while consumption and ending stocks were also projected down. After forecasting normal rains in April, the IMD’s updated long range forecast holds out the prospect for more normal rainfall from the southwest monsoon between June and September. Overall precipitation is expected to be 103% of the new long period average (LPA) of 868.6 mm, up from the 99% forecast in April. Pakistan’s weather and environment suit cotton production Over 80% cotton sowing target achieved. Production target has been fixed at 11m bales for current season. Amid unprecedented rise in cotton and yarn prices in the current season, Union Minister Piyush Goyal has directed the authorities concerned to "finalise the matter early", as regards to the extension of import duty waiver on cotton till December 31. In spot market, Cotton dropped by -450 Rupees to end at 47200 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -3.73% to settled at 2790 while prices up 610 rupees, now Cotton is getting support at 44520 and below same could see a test of 43150 levels, and resistance is now likely to be seen at 46630, a move above could see prices testing 47370.

Trading Ideas:
* Cotton trading range for the day is 43150-47370.
* Cotton gains on short covering as the USDA lowered its forecasts for global cotton supplies in 2022/23.
* The US crop was 54% planted, running ahead of the average pace for that date and offering hope of solid yields.
* The USDA lowered its forecasts for global cotton supplies in 2022/23, as smaller beginning stocks more than offset a 2.6-million-bale increase in production
* In spot market, Cotton dropped  by -450 Rupees to end at 47200 Rupees.

- Kedia Advisory

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