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Gold

Gold yesterday settled up by 1.1% at 60379 as the dollar index extended losses to around 103, moving further away from a two-month high of 103.6 the day before, as investors monitor the debt ceiling impasse and adjust expectations for the next move by the Fed. It was reported that GOP negotiators walked out of a debt ceiling meeting, dashing hopes for a deal. At the same time, Fed Chair Powell emphasized that inflation is significantly above the central bank's target and reiterated the Federal Reserve's commitment to bringing it down to the 2% goal. Currently, markets are pricing in a 36% probability of a 25 bps hike in the fed funds rate in June. For the week, the dollar is poised to gain 0.3%, marking a second consecutive week of increases. A pullback in domestic prices for physical gold from record highs lured back some buyers in India and prompted dealers to slash discounts to a 10-week low, while the bullion market in top hub China saw subdued activity. Indian dealers offered discounts of up to $5 an ounce over official domestic prices versus last week's $11 discount. Perth Mint's gold product sales in April fell more than 6% from the previous month, while those of silver rose to their highest since October last year. Technically market is under short covering as the market has witnessed a drop in open interest by -7.81% to settle at 9909 while prices are up 656 rupees, now Gold is getting support at 59904 and below same could see a test of 59428 levels, and resistance is now likely to be seen at 60673, a move above could see prices testing 60966.

Trading Ideas:
* Gold trading range for the day is 59428-60966.
* Gold gains as dollar index moved further away from a two-month high
* Investors monitor the debt ceiling impasse and adjust expectations for the next move by the Fed.
* Indian dealers trim discounts as price dip reignites some buying

Silver

Silver yesterday settled up by 1.63% at 73321 as the dollar fell after Federal Reserve Chair Jerome Powell struck a moderately dovish stance, contrary to market expectations, saying that given how credit condition have tightened, the U.S. central bank may not need raise interest rates as much. Federal Reserve Chairman Jerome Powell said the path ahead for monetary policy has grown less certain after just over a year's worth of aggressive rate rises aimed at countering inflation. “The risks of doing too much or doing too little are becoming more balanced and our policy adjusted to reflect that," Powell said at a research conference at his bank, adding, "We haven’t made any decisions about the extent to which additional policy firming will be appropriate." The U.S. Federal Reserve will need to stay "super strong" in fighting inflation even if the unemployment rate starts to rise later in the year, Atlanta Fed president Raphael Bostic said. The current 3.4% jobless rate is "far beyond success" for the Fed's employment mandate, but public pressure on the central bank will be "enormous" if it starts to rise, Bostic said. Perth Mint's Silver product sales in April rose to their highest since October last year. Silver sales, on the other hand, rose 6.8% on a monthly basis to 1,947,743 ounces. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.14% to settle at 14695 while prices are up 1178 rupees, now Silver is getting support at 72455 and below same could see a test of 71590 levels, and resistance is now likely to be seen at 73921, a move above could see prices testing 74522.

Trading Ideas:
* Silver trading range for the day is 71590-74522.
* Silver gains as US dollar drops after Fed's Powell hints at June pause
* Fed's Powell says no decisions made yet on next rate action
*Bostic: Fed will need to 'stay strong' on inflation even if unemployment rises


Crude oil

Crude oil yesterday settled down by -0.47% at 5929 after reports that the debt ceiling talks between the White House and House Republicans have been paused, worrying markets of a possible default that could cut demand. Markets were also spooked by Federal Reserve Chair Jerome Powell's comments that inflation was "far above" the Fed's objective. China's oil refinery throughput in April rose 18.9% from a year earlier to the second-highest level on record, data showed. Chinese refiners maintained high runs to meet recovering domestic fuel demand and build stockpiles ahead of the summer travel season. The IEA report showed global oil demand is expected to exceed supply by 2 million barrels per day in the second part of 2023 with China accounting for a substantial part of it. Meanwhile, the US government also announced that it would purchase up to 3 million barrels of crude oil to replenish its depleted Strategic Petroleum Reserve, with deliveries planned for August. On the supply side, wildfires in major oil-producing regions in Canada and the seizure of oil tankers by Iran threatened to disrupt flows. U.S. commercial crude oil stockpiles soared unexpectedly last week due to another release from the Strategic Petroleum Reserve, while gasoline inventories dropped as demand soared to its highest since 2021. Technically market is under fresh selling as the market has witnessed a gain in open interest by 24.27% to settle at 10292 while prices are down -28 rupees, now Crude oil is getting support at 5866 and below same could see a test of 5803 levels, and resistance is now likely to be seen at 6046, a move above could see prices testing 6163.

Trading Ideas:
* Crude oil trading range for the day is 5803-6163.
* Crude oil edges lower as debt talks pause
* China's oil refinery throughput in April rose 18.9% from a year earlier
* IEA report showed global oil demand is expected to exceed supply by 2 million barrels per day in the second part of 2023


Natural Gas
Nat.Gas yesterday settled up by 0.75% at 214.3 as a lack of wind causing power generators to burn more gas to produce electricity. Traders also said prices were supported by the amount of gas exported from Canada to the U.S. remaining low due to wildfires in Alberta and other western provinces. On a daily basis, Canadian gas exports were on track to rise to 7.3 bcfd on Friday, up from a 25-month low of 6.4 bcfd. In the U.S. meanwhile, Refinitiv said average gas output in the Lower 48 states has held at 101.4 bcfd so far in May, matching April's monthly record. Meteorologists projected the weather in the U.S. Lower 48 states would remain mostly near normal through June 3. Refinitiv forecast U.S. gas demand, including exports, would slide from 93.0 bcfd this week to 89.4 bcfd next week before rising to 90.7 bcfd in two weeks. The forecasts for this week and next were similar to Refinitiv's outlook on Thursday. Gas flows to the seven big U.S. LNG export plants have fallen from a record 14.0 bcfd in April to an average of 12.9 bcfd so far in May due to maintenance work at several plants, including Cameron LNG in Louisiana and Cheniere Energy Inc's Sabine Pass in Louisiana. Technically market is under short covering as the market has witnessed a drop in open interest by -30.67% to settle at 17593 while prices are up 1.6 rupees, now Natural gas is getting support at 209.7 and below same could see a test of 205.2 levels, and resistance is now likely to be seen at 220.7, a move above could see prices testing 227.2.

Trading Ideas:
* Natural gas trading range for the day is 205.2-227.2.
* Natural gas rose as a lack of wind causing power generators to burn more gas to produce electricity.
* Prices were supported by the amount of gas exported from Canada to the U.S. remaining low due to wildfires in Alberta and other western provinces
* Canadian gas exports were on track to rise to 7.3 bcfd on Friday, up from a 25-month low of 6.4 bcfd.


Copper

Copper yesterday settled up by 0.79% at 724.15 as Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 13.4% from last Friday. Industrial production in the world’s top copper consumer rose by 5.6% annually in April, well below market expectations of a 10.9% jump, while property investment tanked by 16.2% and new home construction continued to decline. The global copper market is expected to see a deficit this year, steered by improved Chinese demand, the International Copper Study Group (ICSG) said. The ICSG forecast a deficit of about 114,000 tonnes for 2023 compared with a surplus of about 155,000 tonnes expected last October, mainly due to better expectations for Chinese usage. However, "a surplus of about 298,000 tonnes is expected in 2024 as a consequence of additional supply." "The reopening of China after the zero-Covid policy, a recovery in the rest of the world from constrained demand in 2022 and improved economic growth in 2024 are all expected to support usage growth in 2023 and 2024," the organisation said. Copper inventories at the Shanghai Futures Exchange fell to under 135 thousand tonnes, the lowest this year, and those at the London Metal Exchange were under 60 thousand tonnes, the lowest since 2005. Technically market is under short covering as the market has witnessed a drop in open interest by -20.4% to settle at 3091 while prices are up 5.65 rupees, now Copper is getting support at 720 and below same could see a test of 715.8 levels, and resistance is now likely to be seen at 728.2, a move above could see prices testing 732.2.

Trading Ideas:
* Copper trading range for the day is 715.8-732.2.
* Copper gains as Shanghai warehouse copper stocks down 13.4%
* Copper market to slip into deficit in 2023 on improved China demand.
* Industrial production in China rose by 5.6% annually in April, well below market expectations of a 10.9% jump.


Zinc
Zinc yesterday settled up by 0.92% at 225.25 as zinc ingot inventories across seven major Chinese markets totalled 116,900 mt as of May 19, down 5,500 mt from May 15 and 7,200 mt from May 12. Survey showed that the inventory in Shanghai, Guangdong and Tianjin declined 3,500 mt. In Guangdong and Shanghai markets, the downstream companies purchased some goods when zinc prices dropped, and the spot arrivals were not high. The inventory in the Tianjin market also decreased, which was contributed by the decline in spot shipments from smelters and the average downstream demand. 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. The refined zinc output in China declined 16,700 mt or 3.01% month-on-month, but rose 8.97% year-on-year to 540,000 mt. The output totalled 2.11 million mt from January to April, up 7.22% year-on-year. The alloy output registered 87,385 mt in April, up 4,775 mt on the month. Technically market is under short covering as the market has witnessed a drop in open interest by -14.65% to settle at 3030 while prices are up 2.05 rupees, now Zinc is getting support at 223.2 and below same could see a test of 221.1 levels, and resistance is now likely to be seen at 227, a move above could see prices testing 228.7.

Trading Ideas:
* Zinc trading range for the day is 221.1-228.7.
* Zinc gains as China zinc ingot social inventory down 5,500 mt from May 15
* The refined zinc output in China declined 16,700 mt or 3.01% month-on-month
* The global zinc market surplus climbed to 26,700 tonnes in March, from a surplus of 22,800 tonnes a month earlier


Aluminium

Aluminium yesterday settled up by 0.69% at 210.3 as rapid decline in global aluminium ingot inventories, the risk of overseas short squeeze has increased. The aluminium ingot social inventories across China’s eight major markets stood at 706,000 mt as of May 18, down 81,000 mt from a week ago and 259,000 mt from the same period last year. The inventories maintain a downward trend and remain at a low level. Judging from cargoes in transit and share of ingot output at smelters, the social inventory is on track to fall below 700,000 mt soon. The pace of cooling of US inflation is not enough for the Federal Reserve to suspend interest rate hikes, and the debt ceiling agreement has not yet been reached, thus there are many macro uncertainties. China's aluminium imporats in April rose 27.1% from a year earlier, customs data showed, with domestic supply constrained by lingering power issues in the southwest. The world's biggest aluminium producer and consumer brought in 222,851 tonnes of unwrought aluminium and products – including primary metal and unwrought, alloyed aluminium – last month, according to data from the General Administration of Customs. Imports in the first four months of the year totalled 797,602 tonnes, up 12.6% year-on-year, the data showed. Technically market is under short covering as the market has witnessed a drop in open interest by -4.18% to settle at 2869 while prices are up 1.45 rupees, now Aluminium is getting support at 208.9 and below same could see a test of 207.4 levels, and resistance is now likely to be seen at 211.2, a move above could see prices testing 212.

Trading Ideas:
* Aluminium trading range for the day is 207.4-212.
* Aluminum gains amid rapid decline in global aluminium ingot inventories
* The aluminium ingot social inventories across China stood at 706,000 mt, down 81,000 mt from a week ago
* China's April aluminium imports rise with domestic supply constrained


Mentha oil 

Mentha oil yesterday settled up by 0.12% at 953.9 on low level buying after prices dropped on better sowing conditions in UP and Bihar. 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 -0.5 Rupees to end at 1131.1 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -8.98% to settle at 446 while prices are up 1.1 rupees, now Mentha oil is getting support at 951.2 and below same could see a test of 948.6 levels, and resistance is now likely to be seen at 956.2, a move above could see prices testing 958.6.

Trading Ideas:
* Mentha oil trading range for the day is 948.6-958.6.
* In Sambhal spot market, Mentha oil dropped  by -0.5 Rupees to end at 1131.1 Rupees per 360 kgs.
* Menthaoil gains on low level buying after prices dropped on better sowing conditions in UP and Bihar.
* 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 -0.72% at 8222 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 7636.15 Rupees dropped -33.6 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.86% to settle at 14955 while prices are down -60 rupees, now Turmeric is getting support at 8094 and below same could see a test of 7966 levels, and resistance is now likely to be seen at 8366, a move above could see prices testing 8510.

Trading Ideas:
* Turmeric trading range for the day is 7966-8510.
* Turmeric dropped on profit booking in expectation of rise in domestic supplies.
* Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce.
* India Meteorological Department projected onset of monsoon is likely to be delayed by three days.
* In Nizamabad, a major spot market in AP, the price ended at 7636.15 Rupees dropped -33.6 Rupees.

Jeera

Jeera yesterday settled up by 2.12% at 45660 due to good export demand and expectations of lower stocks end of the current marketing year. Prices rose on crop worries grow due to unseasonal rains and hailstorms in Rajasthan, the major producing state. 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 -98.95 Rupees to end at 46657.25 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -2.06% to settle at 9135 while prices are up 950 rupees, now Jeera is getting support at 44800 and below same could see a test of 43945 levels, and resistance is now likely to be seen at 46195, a move above could see prices testing 46735.

Trading Ideas:
* Jeera trading range for the day is 43945-46735.
* Jeera prices rose due to good export demand
* The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers.
* Cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags.
* In Unjha, a key spot market in Gujarat, jeera edged down by -98.95 Rupees to end at 46657.25 Rupees per 100 kg.

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