IGI Logo

Gold

Gold yesterday settled down by -1.41% at 60628 after a stronger-than-expected US nonfarm payrolls report tempered the recession fears. The US economy added 253K jobs in April, above market expectations of 180K while wages grew the most in 9 months. Indian gold demand in the March quarter fell 17% to the lowest level in 10 quarters and is likely to remain subdued even during June and September quarters on record-high prices, the World Gold Council (WGC) said. The lower purchases in the world's second-biggest gold consumer could limit a rally in global prices, with bullion trading near all-time highs. Demand during the March quarter fell to 112.5 tonnes as both jewellery and investment demand dropped due to a rally in local prices. Global gold demand fell in the first three months of 2023 as large purchases by central banks and Chinese consumers were offset by reduced investor buying, the World Gold Council (WGC) said. Total demand amounted to 1,081 tonnes, down 13% from the first quarter of 2022, the WGC said in its latest quarterly demand trends report. Physical gold dealers in major trading centre China offered discounts for the first time in more than a month as elevated prices kept retail buyers away. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.18% to settle at 14400 while prices are down -865 rupees, now Gold is getting support at 60043 and below same could see a test of 59457 levels, and resistance is now likely to be seen at 61422, a move above could see prices testing 62215.

Trading Ideas:

* Gold trading range for the day is 59457-62215.
* Gold fell after a stronger-than-expected US nonfarm payrolls report
* Indian gold demand in the March quarter fell 17% to the lowest level in 10 quarters
* Global gold demand fell in the first three months of 2023

Silver

Silver yesterday settled down by -1.27% at 77047 after the US jobs report showed the labor market remained strong throwing cold water into expectations that the Federal Reserve rate-hike cycle was over. The US economy unexpectedly added 253K jobs in April, well above forecasts of 180K while wages grew the most in 9 months. Average hourly earnings for all employees on US private nonfarm payrolls rose by 16 cents, or 0.5%, to $33.36 in April 2023. Investors fled out of regional banking shares after a group of lenders sought outside investment and raised fears of a second round of banking collapses, triggering a fresh flight to safe assets. Besides concerns of financial instability, recent signs of a slowing job market prompted investors to bet on multiple rate cuts by the Fed this year, which pressure the dollar and decrease the opportunity cost of holding non-interest-bearing assets. The central bank hiked its funds rate by 25bps this month and refrained from signaling further tightening. 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. Monthly Silver sales, rose 6.8% on a monthly basis to 1,947,743 ounces. Technically market is under long liquidation as the market has witnessed a drop in open interest by -13.57% to settle at 18623 while prices are down -991 rupees, now Silver is getting support at 75894 and below same could see a test of 74740 levels, and resistance is now likely to be seen at 78247, a move above could see prices testing 79446.

Trading Ideas:
* Silver trading range for the day is 74740-79446.
* Silver dropped after US jobs report showed the labor market remained strong.
* The US economy unexpectedly added 253K jobs in April
* Fed hiked its funds rate by 25bps this month and refrained from signaling further tightening.

Crude oil

Crude oil yesterday settled up by 2.67% at 5841 after reports of a drone attack on the Ilsky oil refinery in southern Russia, has caused a fire. However, expectations of potential supply cuts at the next meeting of the OPEC+ producer group in June have provided some price support. U.S. crude oil stockpiles in the Strategic Petroleum Reserve last week declined by about 2 million barrels to 364.9 million barrels, their lowest since October 1983 for the third week in a row, according to the Energy Information Administration. U.S. data showed employers boosted hiring in April while raising wages for workers, pointing to sustained labour market strength that could see the Federal Reserve keeping interest rates higher for some time. Kazakhstan's April daily crude oil output excluding gas condensate rose by 4% from March to 1.6 million barrels. That's slightly below Kazakhstan's 1.628 million barrel per day (bpd) April quota agreed within the OPEC+ group of oil producers. OPEC+ agreed to a further reduction in production from May, with Kazakhstan set to cut its oil output by 78,000 bpd to 1.550 million bpd. According to official data, Kazakhstan's combined oil and gas condensate output edged up by 0.2% from March to 7.58 million tonnes (1.844 million bpd). Technically market is under short covering as the market has witnessed a drop in open interest by -15.7% to settle at 16725 while prices are up 152 rupees, now Crude oil is getting support at 5701 and below same could see a test of 5561 levels, and resistance is now likely to be seen at 5933, a move above could see prices testing 6025.

Trading Ideas:
* Crude oil trading range for the day is 5561-6025.
* Crude oil gains after reports of a drone attack on Ilsky oil refinery in Russia
* Kazakhstan's crude oil output in April up 4% from March
* OPEC output rises 120,000 bpd from November – survey


Nat.Gas

Nat.Gas yesterday settled up by 1.21% at 176.3 amid forecasts for more gas demand in the week than previously expected. However, upside seen limited as the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants declined due to spring maintenance. Average gas output in the U.S. Lower 48 states rose to 101.7 billion cubic feet per day (bcfd) so far in May, up from a record 101.4 bcfd in April. Meteorologists projected the weather would remain mostly warmer than normal from May 5-16, with cooling degree days (CDD) exceeding heating degree days (HDD) over the next two weeks for the first time this year. With the weather turning warmer, Refinitiv forecast U.S. gas demand, including exports, would slide from 96.3 bcfd this week to 92.1 bcfd next week and 91.7 bcfd in two weeks. The forecasts for this week and next were higher than Refinitiv's outlook on Thursday. The U.S. Energy Information Administration (EIA) said utilities added 54 billion cubic feet (bcf) of gas into storage during the week ended April 28. That was close to the 52-bcf build compared with an increase of 72 bcf in the same week last year and a five-year (2018-2022) average increase of 78 bcf. Technically market is under short covering as the market has witnessed a drop in open interest by -5.57% to settle at 44122 while prices are up 2.1 rupees, now Natural gas is getting support at 170.1 and below same could see a test of 163.9 levels, and resistance is now likely to be seen at 180.4, a move above could see prices testing 184.5.

Trading Ideas:
* Natural gas trading range for the day is 163.9-184.5.
* Natural gas gains amid forecasts for more gas demand in the week than previously expected.
* EIA said utilities added 54 billion cubic feet (bcf) of gas into storage
* The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants declined due to spring maintenance.



Copper

Copper yesterday settled up by 0.68% at 743.6 as data from the London Metal Exchange showed inventories decreased to 56,000 tonnes, the least since 2005, and Chile's state-owned Codelco said the output in 2023 was estimated to sink as much as 7% after the 10.6% decline in 2022. China’s manufacturing sector unexpectedly contracted in April, magnifying concerns over the country's economic slowdown despite its reopening. Consequently, the Yanghsan copper premium has more than halved since mid-March to $23 per tonne, indicating excess availability for physical deliveries. In the meantime, weak growth in the United States and persistent concerns of financial instability dampened the mood for infrastructure investment. 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. "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. Technically market is under short covering as the market has witnessed a drop in open interest by -6.36% to settle at 5053 while prices are up 5.05 rupees, now Copper is getting support at 737.5 and below same could see a test of 731.3 levels, and resistance is now likely to be seen at 748.7, a move above could see prices testing 753.7.

Trading Ideas:
* Copper trading range for the day is 731.3-753.7.
* Copper gains as LME inventories decreased to 56,000 tonnes, the least since 2005
* Codelco said the output in 2023 was estimated to sink as much as 7% after the 10.6% decline in 2022.
* The Yanghsan copper premium has more than halved since mid-March to $23 per tonne
 

Zinc

Zinc yesterday settled up by 1.3% at 238.15 as global refined zinc market is likely be in a deficit in 2023, the International Lead and Zinc Study Group (ILZSG) said. Global demand for refined zinc metal will exceed supply in 2023 with the extent of the deficit currently forecast at a modest 45,000 tonnes, the ILZSG said. Data shows that social inventories of zinc ingots across seven major markets in China totalled 118,000 mt as of May 5, down 18,500 mt from last Monday April 24 and 3,100 mt higher compared with the prior week. In Shanghai, the market arrivals were low, but downstream buyers only purchased in a small amount due to unsatisfactory orders. As a result, the inventory in Shanghai climbed. In Guangdong, the downstream enterprises had been active in restocking before the Labour Day holiday when zinc prices declined. The Caixin China General Composite PMI declined to a three-month low of 53.6 in April 2023 from March’s nine-month high of 54.5. It was the fourth straight period of growth in private sector activity as services activity maintained momentum following the removal of strict pandemic measures. The Caixin China General Services PMI declined to 56.4 in April 2023 from March’s 28-month high of 57.8. Technically market is under short covering as the market has witnessed a drop in open interest by -3.8% to settle at 3370 while prices are up 3.05 rupees, now Zinc is getting support at 235.9 and below same could see a test of 233.5 levels, and resistance is now likely to be seen at 239.8, a move above could see prices testing 241.3.

Trading Ideas:
* Zinc trading range for the day is 233.5-241.3.
* Zinc gains as global refined zinc market is likely be in a deficit in 2023
* Zinc social inventories in China totalled 118,000 mt, down 18,500 mt
* LME zinc inventories remained close to levels not seen since 1989.



Aluminium

Aluminium yesterday settled up by 0.7% at 208.05 as aluminium ingot social inventories across China’s eight major markets stood at 835,000 mt as of May 4, down 18,000 mt from a week ago and 197,000 mt from the same period last year. The Caixin China General Composite PMI declined to a three-month low of 53.6 in April 2023 from March’s nine-month high of 54.5. It was the fourth straight period of growth in private sector activity as services activity maintained momentum following the removal of strict pandemic measures. The Caixin China General Services PMI declined to 56.4 in April 2023 from March’s 28-month high of 57.8, as both output and new orders growth eased slightly while the job creation moderated. On the price front, input cost inflation accelerated to a 12-month, while output charges rose only slightly as firms south to boost competitiveness and attract sales. The Caixin China General Manufacturing PMI unexpectedly fell to 49.5 in April 2022 from 50 in the previous month, missing market forecasts of 50.3. The latest result marked the first contraction in factory activity since January, amid an ongoing property downturn and global economic slowdown. New orders fell after rising in March, employment decline the most in three months, while output growth slowed for the second straight month. Technically market is under short covering as the market has witnessed a drop in open interest by -3.38% to settle at 2972 while prices are up 1.45 rupees, now Aluminium is getting support at 206.4 and below same could see a test of 204.5 levels, and resistance is now likely to be seen at 209.3, a move above could see prices testing 210.3.

Trading Ideas:
* Aluminium trading range for the day is 204.5-210.3.
* Aluminum gains as inventories across China’s stood at 835,000 mt, down 18,000 mt
* China composite PMI falls to 3-month low
* China services sector growth stays robust

Mentha oil

Mentha oil yesterday settled up by 0.28% at 970.1 as prices seen supported in wake of weaker production outlook. Forecast of above normal temperature during Apr-May is likely to affect the sowing activities adversely that will support the firmness in prices. Mentha exports during Apr-Feb 2023, dropped by 10.67 percent to 2,227.55 tonnes as compared to 2,493.53 tonnes exported during Apr-Feb 2022. In February 2023 around 210.78 tonnes of Mentha was exported as against 233.21 tonnes in January 2023 showing a drop of 9.62%. In February 2023 around 210.78 tonnes of Mentha was exported as against 157.90 tonnes in February 2022 showing a rise of 33.49%. 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 gained by 1152.7 Rupees to end at 1136.3 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -0.71% to settle at 699 while prices are up 2.7 rupees, now Mentha oil is getting support at 967.1 and below same could see a test of 964.1 levels, and resistance is now likely to be seen at 973, a move above could see prices testing 975.9.

Trading Ideas:
* Mentha oil trading range for the day is 964.1-975.9.
* In Sambhal spot market, Mentha oil gained  by 1152.7 Rupees to end at 1136.3 Rupees per 360 kgs.
* Mentha oil prices seen supported in wake of weaker production outlook.
* Forecast of above normal temperature during Apr-May is likely to affect the sowing activities adversely that will support the prices
* In February 2023 around 210.78 tonnes of Mentha was exported as against 157.90 tonnes in February 2022 showing a rise of 33.49%.



Turmeric

yesterday settled up by 0.03% at 7430 on profit booking after prices rose as the untimely rains that occurred in various places in the Andhra Pradesh damaged turmeric crops causing huge loss to the farmers. Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall. Arrivals of new crop has improved as about 7-8 lakh bags touched the Nizamabad market so far wherein about 7 lakh bags were reported in Sangli. Market is running with huge stocks and stockists are trying to release their stocks on every rise in prices. Turmeric exports during Apr-Feb 2023, rose by 10.42 percent at 151,298.89 tonnes as compared to 137,017.23 tonnes exported during Apr- Feb 2022. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 12,484.25 tonnes in January 2023 showing a rise of 18.60%. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 10,358.22 tonnes in February 2022 showing a rise of 42.94%. 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 7041.9 Rupees gained 56.35 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -18.38% to settle at 5860 while prices are up 2 rupees, now Turmeric is getting support at 7322 and below same could see a test of 7212 levels, and resistance is now likely to be seen at 7566, a move above could see prices testing 7700.

Trading Ideas:
* Turmeric trading range for the day is 7212-7700.
* Turmeric settled flat on profit booking after prices rose as crops got damaged due to untimely rains in Andhra Pradesh.
* Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall.
* Turmeric exports during Apr-Jan 2023, rose by 7.76 percent at 1,36,492.59 tonnes
 In Nizamabad, a major spot market in AP, the price ended at 7041.9 Rupees gained 56.35 Rupees.


Jeera

Jeera yesterday settled up by 2.8% at 46560 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 up by 332.65 Rupees to end at 45359.2 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -10.32% to settle at 4380 while prices are up 1270 rupees, now Jeera is getting support at 45250 and below same could see a test of 43935 levels, and resistance is now likely to be seen at 47490, a move above could see prices testing 48415.

Trading Ideas:
* Jeera trading range for the day is 43935-48415.
* Jeera gains due to good export demand and expectations of lower stocks
* 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 up by 332.65 Rupees to end at 45359.2 Rupees per 100 kg.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer