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Gold

Gold yesterday settled down by -0.15% at 50173 as a pullback in the dollar supported bullion demand and countered pressure from rebounding US Treasury yields. The dollar retreated from 20-year highs this week as investors took profits and scaled back bets on whether US interest rate hikes will drive further dollar gains. Meanwhile, the benchmark US 10-year yield bounced back above 2.9%, limiting demand for the non-interest-bearing metal. Investors expect further volatility in gold markets amid persistent inflationary pressures coupled with a challenging global growth outlook. Latest data showed that the headline CPI in the US held close to a 40-year high at 8.3% in April, while the core CPI also came in above expectations at 6.2%, stoking worries that elevated prices may persist. China has been dealing with a resurgence of COVID-19 infections in some of the major cities. Unfortunately, this has hit physical demand as local stores closed. In general, as well as the gold price has been dealing with a rise in yields. The WGC reported that Chinese gold ETF holdings totaled 58.5t (US$3.5bn) at the end of April, following a 3.3t (US$323mn) outflow in the month. This could have been due to possible profit-taking activities as the local gold price rose. Technically market is under long liquidation as market has witnessed drop in open interest by -2.71% to settled at 6327 while prices down -75 rupees, now Gold is getting support at 50008 and below same could see a test of 49844 levels, and resistance is now likely to be seen at 50458, a move above could see prices testing 50744.

Trading Ideas:
#Gold trading range for the day is 49844-50744.
# Gold pared gains after seen supported amid pullback in the dollar supported bullion demand and countered pressure from rebounding US Treasury yields.
# The dollar retreated from 20-year highs this week as investors took profits and scaled back bets on whether US interest rate hikes will drive further dollar gains
# Investors expect further volatility in gold markets amid persistent inflationary pressures coupled with a challenging global growth outlook.

 

Silver

Silver yesterday settled up by 0.38% at 61156 as the dollar eased for a third day running after climbing to a two-decade high last week. New York Fed President John Williams downplayed deteriorating liquidity conditions in financial markets, saying this was to be expected. He reiterated his view that the central bank will need to forcefully tighten monetary policy to contain inflation. Worries about growth after data showed a contraction in China's industrial output, and a report showing an unexpected contraction in New York manufacturing activity in May boosted the demand for the safe-haven metal. Retail sales in the US increased 0.9% mom in April of 2022, following an upwardly revised 1.4% surge in March and matching market forecasts. The reading showed American consumers continued to spend despite stubbornly high levels of inflation although it was the smallest gain in retail trade in four months. Industrial production in the United States rose 1.1 percent from a month earlier in April of 2022, marking the fourth consecutive month of gains of 0.8 percent or greater. It follows a 0.9 percent increase in March and compared with market expectations of a 0.5 percent rise. Manufacturing output advanced 0.8 percent, the same as in the prior month and above market expectations of 0.4 percent. Technically market is under fresh buying as market has witnessed gain in open interest by 1.07% to settled at 15265 while prices up 230 rupees, now Silver is getting support at 60794 and below same could see a test of 60432 levels, and resistance is now likely to be seen at 61539, a move above could see prices testing 61922.

Trading Ideas:
# Silver trading range for the day is 60432-61922.
# Silver edged higher as the dollar eased for a third day running after climbing to a two-decade high last week.
# Fed’s John Williams downplayed deteriorating liquidity conditions in financial markets, saying this was to be expected.
# Retail sales in the US increased 0.9% mom in April of 2022, following an upwardly revised 1.4% surge in March

Crude oil

Crude oil yesterday settled down by -0.27% at 8849 reacting to reports that the Biden administration is set to ease some of the sanctions imposed on Venezuela. Prices got support earlier from hopes of demand recovery in China as it looks to ease COVID restrictions, and from rising geopolitical tension between the EU and Russia following Sweden and Finland's moves to join NATO. Further support came from figures showing OPEC and allied nations, which include Russia, in April produced far below levels required under a deal to gradually ease record output cuts made during the worst of the pandemic in 2020. EU foreign ministers failed in their effort to pressure Hungary to lift its veto on the proposed oil embargo. But some diplomats now point to a May 30-31 summit as the moment for agreement on a phased ban on Russian oil. U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped by a record 7.0 million barrels last week to 543.0 million barrels, its lowest since May 2001, the U.S. Energy Information Administration (EIA) said. The agency also said U.S. distillate stockpiles fell last week to 104.0 million barrels, their lowest since May 2005, with East Coast distillate inventories dropping to a record low of 21.3 million barrels, according to data going back to 1990. Technically market is under long liquidation as market has witnessed drop in open interest by -32.15% to settled at 5137 while prices down -24 rupees, now Crude oil is getting support at 8742 and below same could see a test of 8634 levels, and resistance is now likely to be seen at 8958, a move above could see prices testing 9066.

Trading Ideas:
# Crude oil trading range for the day is 8634-9066.
# Crude oil dropped reacting to reports that the Biden administration is set to ease some of the sanctions imposed on Venezuela.
# Prices got some support from hopes of demand recovery in China as it looks to ease COVID restrictions
# Russian crude production plunges by nearly 9% in April, OPEC+ data shows

Nat.Gas

Nat.Gas yesterday settled up by 4.62% at 640.2 on a preliminary drop in daily output and forecasts for warmer weather and more air-conditioning demand over the next two weeks than previously expected. Also supporting prices, power demand in Texas was expected to hit a monthly record as homes and businesses crank up their air conditioners to escape another spring heat wave. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.8 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. On a daily basis, however, output was on track to drop 1.9 bcfd to a near three-week preliminary low of 93.5 bcfd on Tuesday due mostly to declines in Pennsylvania. If that drop stands, it would be the biggest one-day decline since freeze-offs shut wells in early February. Preliminary data is often revised. Refinitiv projected average U.S. gas demand, including exports, would slide from 89.6 bcfd this week to 88.7 bcfd next week. Those forecasts were higher than Refinitiv's outlook. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. Technically market is under fresh buying as market has witnessed gain in open interest by 9.99% to settled at 4405 while prices up 28.3 rupees, now Natural gas is getting support at 626.2 and below same could see a test of 612.2 levels, and resistance is now likely to be seen at 651.4, a move above could see prices testing 662.6.

Trading Ideas:
# Natural gas trading range for the day is 612.2-662.6.
# Natural gas rose on a preliminary drop in daily output and forecasts for warmer weather and more air-conditioning demand over the next two weeks
# Also supporting prices, power demand in Texas was expected to hit a monthly record
# Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.8 bcfd so far in May from 94.5 bcfd in April.


Copper
Copper yesterday settled up by 0.73% at 765.6 on expectations that China would ease its COVID-19 restrictions. However, the price of the red metal is still almost 15% below a record peak of $5 hit in early March brought down by demand concerns from top consumer China. The latest data showed China's copper imports fell 4% from a year earlier in April, as lockdowns hurt manufacturing activity and consumption. Pressuring prices further was the continued appreciation of the US dollar, making the metal more expensive for holders of other currencies, and lingering concerns about global economic growth on a backdrop of high inflation, coupled with an aggressive tightening monetary policy. China's state planner will strengthen support for manufacturers, the service sector and small firms, it said, as strict COVID-19 lockdowns rattled economic activity. China produced 827,300 mt of copper cathode in April, down 2.5% MoM and down 5.7% YoY. Overall, the output of domestic smelters in April was basically in line with market expectations, but some smelters moved the maintenance plan to May due to certain obstacles to the maintenance of equipment. Two smelters in Shandong also have not resumed the production in May. Technically market is under short covering as market has witnessed drop in open interest by -1.93% to settled at 3610 while prices up 5.55 rupees, now Copper is getting support at 761.4 and below same could see a test of 757.1 levels, and resistance is now likely to be seen at 770.4, a move above could see prices testing 775.1.

Trading Ideas:
# Copper trading range for the day is 757.1-775.1.
# Copper bounced back expectations that China would ease its COVID-19 restrictions.
# China's state planner will strengthen support for manufacturers, the service sector and small firms, it said, as strict COVID-19 lockdowns rattled economic activity.
# China's copper imports fell 4% from a year earlier in April, as lockdowns hurt manufacturing activity and consumption.

Zinc

Zinc yesterday settled up by 1.36% at 315.7 as top metals consumer China's decision to ease some COVID-19 restrictions fuelled expectations of a recovery in demand. The global refined zinc market is expected to register a supply shortfall of 292,000 tonnes this year, according to the International Lead and Zinc Study Group (ILZSG). It will be the second consecutive year of deficit after global production fell short of demand to the tune of 193,000 tonnes in 2021. The Group's latest twice-yearly analysis of the statistical landscape marks a major reassessment of zinc market dynamics. In October last year it forecast a cumulative surplus of 261,000 tonnes over 2021 and 2022. Both mined zinc production and usage enjoyed a strong post-COVID recovery last year, rising by 4.1% and 5.7% respectively, according to ILZSG. In April 2022, China refined zinc output stood at 495,500mt, with a decrease of 400 mt MoM or 0.08% and a decrease of 1.89% YoY. From January to April 2022, the combined refined zinc output was 1.967 million mt, a decrease of 1.89% year on year. In addition, the output in March was revised to 495,900 mt, an increase of 8.19% MoM and a decrease of 0.19% YoY. Survey showed that the output of domestic refined zinc decreased slightly month-on-month in April and was less than expected. Technically market is under fresh buying as market has witnessed gain in open interest by 0.36% to settled at 1127 while prices up 4.25 rupees, now Zinc is getting support at 311.3 and below same could see a test of 306.8 levels, and resistance is now likely to be seen at 321.3, a move above could see prices testing 326.8.

Trading Ideas:
# Zinc trading range for the day is 306.8-326.8.
# Zinc rose as top metals consumer China's decision to ease some COVID-19 restrictions fuelled expectations of a recovery in demand.
# The global refined zinc market is expected to register a supply shortfall of 292,000 tonnes this year
# China refined zinc output stood at 495,500mt, with a decrease of 400 mt MoM or 0.08% and a decrease of 1.89% YoY


Aluminium

Aluminium yesterday settled up by 1.22% at 240.3 as the easing of the pandemic and the news that Shanghai will gradually open weakened the dollar risk aversion. Aluminium inventories in LME warehouses, already at their lowest in nearly 17 years, are likely to fall further over the coming days and weeks, as more metal leaves the LME system and heads for Europe where supplies are scarce. China produced 3.36 million mt of primary aluminium in April, up 0.3% from a year earlier, setting a record high, as power rationing eased, allowing smelters to expand operations, according to data from the National Bureau of Statistics (NBS). Average daily production of primary aluminium was 112,000 mt, up from 106,453 mt in March and also a record high. Entering May, the domestic operating aluminium capacity is expected to continue to rise slightly. According to data released by the London Metal Exchange (LME), since mid-February, LME aluminium inventories have started a relatively smooth road to destocking. Last week, inventories continued to decline. The latest inventory level was 532,500 mt as of May 16, which fell to a new low in nearly 17 years. SHFE aluminium inventories fell 16.33% on a weekly basis to 246,931 mt as of May 13, a seven-month low. Technically market is under short covering as market has witnessed drop in open interest by -0.15% to settled at 2677 while prices up 2.9 rupees, now Aluminium is getting support at 237.3 and below same could see a test of 234.3 levels, and resistance is now likely to be seen at 242.1, a move above could see prices testing 243.9.

Trading Ideas:
# Aluminium trading range for the day is 234.3-243.9.
# Aluminium rose as the easing of the pandemic and the news that Shanghai will gradually open weakened the dollar risk aversion
# Aluminium inventories in LME warehouses, already at their lowest in nearly 17 years, are likely to fall further over the coming days and weeks
# China produced 3.36 million mt of primary aluminium in April, up 0.3% from a year earlier, setting a record high, as power rationing eased

Mentha oil

Mentha oil yesterday settled up by 0.56% at 1099.4 as 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. Prices gains amid loss in production and improvement in demand while monsoon is yet to be seen as last year heavy rains in the pre-monsoon season came like a disaster for farmer. FMCG industry reels under extraordinary inflationary pressures, experts believe it will continue to grow in both volume and value, but margins will get squeezed. In Sambhal spot market, Mentha oil gained by 8.1 Rupees to end at 1209.8 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -4.95% to settled at 825 while prices up 6.1 rupees, now Mentha oil is getting support at 1092.2 and below same could see a test of 1085.1 levels, and resistance is now likely to be seen at 1104.2, a move above could see prices testing 1109.1.

Trading Ideas:
# Mentha oil trading range for the day is 1085.1-1109.1.
# In Sambhal spot market, Mentha oil gained  by 8.1 Rupees to end at 1209.8 Rupees per 360 kgs.
# Mentha oil prices seen supported as the harvest 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.

Turmeric

Turmeric yesterday settled up by 0.15% at 8216 on some short covering after pressure seen as the production of turmeric is pegged at 11.76 lakh tonnes in 2021-22 against 11.24 lt in 2020-21. As per govt data, turmeric exports in Jan 2022 is down by 25% m/m at 10,600 tonnes Vs 14275 tonnes in Dec 2021. However, the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. In Feb, turmeric exports recorded lower by 17% on year 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. Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones. The farmers, who incurred losses during this period due to low price, are hoping to get good price this year, so that they could clear their dues to some extent. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In Nizamabad, a major spot market in AP, the price ended at 8397.1 Rupees dropped -4.9 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.5% to settled at while prices up 12 rupees, now Turmeric is getting support at 8164 and below same could see a test of 8114 levels, and resistance is now likely to be seen at 8270, a move above could see prices testing 8326.
Trading Ideas:
# Turmeric trading range for the day is 8114-8326.
# Turmeric recovered on some short covering after pressure seen as the production of turmeric is pegged at 11.76 lakh tonnes in 2021-22 against 11.24 lt in 2020-21.
# New season turmeric are diminishing and exports demand is improving as season progresses.
# 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.
# In Nizamabad, a major spot market in AP, the price ended at 8397.1 Rupees dropped -4.9 Rupees.

Jeera

Jeera yesterday settled up by 0.02% at 22220 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. The low yield in India will affect the global prices as the country is the largest producer of jeera or cumin in the world. Total cumin output is estimated to have declined about 35% year-on-year to 558 million tonnes in 2022. The main reason for the low yield and low acreage under cultivation is that during the cumin sowing period (October-December 2021) farmers shifted to gram and mustard whose prices were higher than that of cumin. Secondly, excess rainfall in the key cumin belts of Dwarka, Banaskantha and Kutch in Gujarat, and Jodhpur and Nagaur in Rajasthan increased the probability of wilt attack, preventing farmers from sowing the crop. Cumin exports declined ~24% on-year in fiscal 2022 (April 2021- February 2022), owing to 51% drop in exports to China (accounts for one-third of exports) following a pesticide residue issue in Indian consignments. Given that production has likely declined by a significant ~35%, exports too are expected to fall this fiscal. In Unjha, a key spot market in Gujarat, jeera edged up by 243.75 Rupees to end at 22026.95 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -0.87% to settled at while prices up 5 rupees, now Jeera is getting support at 22050 and below same could see a test of 21880 levels, and resistance is now likely to be seen at 22365, a move above could see prices testing 22510.
Trading Ideas:
# Jeera trading range for the day is 21880-22510.
# Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
# The low yield in India will affect the global prices as the country is the largest producer of jeera or cumin in the world.
# Total cumin output is estimated to have declined about 35% year-on-year to 558 million tonnes in 2022.
# In Unjha, a key spot market in Gujarat, jeera edged up by 243.75 Rupees to end at 22026.95 Rupees per 100 kg.

Cotton
Cotton yesterday settled down by -1.24% at 49350 on profit booking after reports Union Textiles Minister Piyush Goyal is going to hold a meeting with the stakeholders of the cotton industry to give relief to the textile industry. Cotton, textile and yarn industries and other stakeholders of the industry will be present in this meeting. According to the information, in this meeting, the Textile Minister will discuss many issues including giving relief to the textile industry, controlling the ever-increasing prices and reducing the duty. However earlier in the day, prices rallied to all time high amid rising demand and possibly lower supplies. The USDA in its latest report lowered U.S. production by one million bales as the drought situation in Texas is predicted to reduce harvested acres. At the same time, global supplies in 2022/23 are projected below a year earlier, as smaller beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower. Global supplies in 2022/23 are projected below a year earlier, as lower beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower, the USDA said. Global production is lowered 1.8 million bales from last month, largely due to a drop of 1.0 million bales from India. In spot market, Cotton gained by 790 Rupees to end at 50280 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -15.83% to settled at 2271 while prices down -620 rupees, now Cotton is getting support at 48730 and below same could see a test of 48100 levels, and resistance is now likely to be seen at 50160, a move above could see prices testing 50960.

Trading Ideas:
# Cotton trading range for the day is 48100-50960.
# Cotton dropped on profit booking after reports that Union Minister Piyush Goyal to meet stakeholders on rising cotton prices
# However earlier in the day, prices rallied to all time high amid rising demand and possibly lower supplies.
# USDA in its latest report lowered U.S. production by one million bales as the drought situation in Texas is predicted to reduce harvested acres
# In spot market, Cotton gained  by 790 Rupees to end at 50280 Rupees.

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