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Gold

Gold yesterday settled down by -0.66% at 50819 pressured by a firmer dollar as investors look to minutes from the U.S. Federal Reserve's May policy meeting due later in the day for cues on its policy tightening path. While markets expect 50-basis-point rate hikes over the next several months, there are also concerns that aggressive policy tightening could weigh on economic recovery. Atlanta Fed President Raphael Bostic warned headlong rate hikes could create "significant economic dislocation". New orders for U.S.-made capital goods rose less than expected in April, pointing to some moderation in business spending on equipment early in the second quarter, and headwinds are growing from rising interest rates and tightening financial conditions. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.3% last month, the Commerce Department said. These so-called core capital goods orders advanced 1.1% in March. They were up 18.0% on a year-on-year basis. Robust business investment in equipment helped to keep domestic demand strong in the first quarter even as the economy contracted, burdened by a record trade deficit. But the Federal Reserve has adopted an aggressive monetary policy stance to cool demand and tame inflation, sparking a stock market sell-off and boosting U.S. Treasury yields and the dollar, which could slow capital expenditure growth. Technically market is under long liquidation as market has witnessed drop in open interest by -12.4% to settled at 4197 while prices down -338 rupees, now Gold is getting support at 50638 and below same could see a test of 50458 levels, and resistance is now likely to be seen at 51065, a move above could see prices testing 51312.

Trading Ideas:

# Gold trading range for the day is 50458-51312.
# Gold prices slipped pressured by a firmer dollar as investors look to minutes from the U.S. Federal Reserve's May policy meeting
# Atlanta Fed President Raphael Bostic warned headlong rate hikes could create "significant economic dislocation"
# US Core capital goods orders increase 0.3% in April

Silver

Silver yesterday settled down by -0.71% at 61534 as the dollar gained some ground, but inflationary and growth concerns kept safe-haven bullion away from further losses. With the Federal Reserve aggressively raising interest rates to fight against 40-year high inflation, analysts warned of the growing risk of recession in the US. The Fed has raised its benchmark policy rate by an aggregate of 75 basis points this year, and is on track to increase it again in 50-basis point increments at each of the next two meetings in June and July. German 10-year Bund was below 1%, amid concerns about the economic outlook and its impact on policy tightening. The latest PMIs showed the Eurozone manufacturing sector expanded the least since November 2020 in May and the services sector slowed to a 2-month low, below analyst's estimates. The market currently expects a 25bps rate hike in July, after ECB President Christine Lagarde said the central bank is likely to exit negative interest rates by the end of the third quarter. New orders for US manufactured durable goods increased 0.4% month-over-month to $265.3 billion in April of 2022, following a downwardly revised 0.6% rise in March and below forecasts of 0.6%, in a sign business spending moderated. Technically market is under fresh selling as market has witnessed gain in open interest by 6.94% to settled at 13692 while prices down -442 rupees, now Silver is getting support at 61152 and below same could see a test of 60771 levels, and resistance is now likely to be seen at 61992, a move above could see prices testing 62451.

Trading Ideas:

# Silver trading range for the day is 60771-62451.
# Silver dropped as the dollar gained some ground, but inflationary and growth concerns kept safe-haven bullion away from further losses.
# Fed is on track to increase it again in 50-basis point increments at each of the next two meetings in June and July.
# German 10-year Bund was below 1%, amid concerns about the economic outlook and its impact on policy tightening.

Crude oil

Crude oil yesterday settled up by 0.43% at 8549 amid signs of tight supplies and expectations for firmer demand during the summer. The U.S. Department of Energy said it was selling up to 40.1 million barrels of crude oil from the U.S. Strategic Petroleum Reserve as part of a previous announcement by the administration. The sale is part of President Joe Biden's March 31 announcement to release crude oil from the reserve to combat rising energy prices, the department said in a statement. The American Petroleum Institute reported that U.S. crude stocks unexpectedly rose by 567,000 barrels last week. However, gasoline inventories fell by 4.2 million barrels and distillate stocks declined by about 949,000 barrels - raising optimism that demand will rise in the U.S. summer driving season. Saudi Arabia does not expect an immediate shortage of oil and only a certain shortage of oil products, the country's foreign minister Prince Faisal bin Farhan Al Saud said when asked why Riyadh has rebuffed U.S. calls to raise production. Crude inventories fell by 1 million barrels in the week to May 20 to 419.8 million barrels, compared with expectations for a 737,000-barrel drop. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels in the last week, EIA said. Refinery crude runs rose by 334,000 barrels per day in the last week, EIA said. Technically market is under fresh buying as market has witnessed gain in open interest by 1.72% to settled at 6608 while prices up 37 rupees, now Crude oil is getting support at 8470 and below same could see a test of 8390 levels, and resistance is now likely to be seen at 8650, a move above could see prices testing 8750.

Trading Ideas:
# Crude oil trading range for the day is 8390-8750.
# Crude oil prices climbed amid signs of tight supplies and expectations for firmer demand during the summer.
# Saudi foreign minister does not expect immediate global oil shortage
# U.S. to sell up to 40.1 mln bbls crude oil from SPR

Nat.Gas

Nat.Gas yesterday settled up by 2.21% at 701.7 as power generators and liquefied natural gas (LNG) export plants consumed more of the fuel. Power companies burned more gas to generate electricity due to a lack of wind in recent weeks. Wind was on track to produce just 10% of U.S. power generation this week, down from a recent high of 16%, while gas was on track to generate about 36% this week, up from a recent low of 33% a few weeks ago. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 95.0 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April, off the monthly record of 96.1 bcfd in November 2021. Refinitiv projected average U.S. gas demand, including exports, would slide from 89.4 bcfd this week to 88.3 bcfd next week. The forecast for this week was higher than Refinitiv forecast on Tuesday, while its outlook for next week was lower. The average amount of gas flowing to U.S. LNG export plants rose to 12.4 bcfd so far in May from 12.2 bcfd in April. It hit a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. Since the United States cannot produce much more LNG anytime soon, it has worked with allies to divert cargoes from elsewhere to Europe to help break the region's dependence on Russian gas. Technically market is under fresh buying as market has witnessed gain in open interest by 19.2% to settled at 8933 while prices up 15.2 rupees, now Natural gas is getting support at 680.4 and below same could see a test of 659.1 levels, and resistance is now likely to be seen at 725.3, a move above could see prices testing 748.9.

Trading Ideas:
# Natural gas trading range for the day is 659.1-748.9.
# Natural gas jumped as power generators and liquefied natural gas (LNG) export plants consumed more of the fuel.
# Power companies burned more gas to generate electricity due to a lack of wind in recent weeks.
# Speculators increased their net long futures and options positions for the first time in five weeks to their highest since early May
 

Copper

Copper yesterday settled down by -0.72% at 771.85 on concerns that slowing economic growth and COVID-19 lockdowns in top consumer China would depress demand. Weak U.S. economic data and Chinese efforts to control coronavirus outbreaks have fuelled fears that a global slowdown could be more severe than many had thought. The Fed and the European Central bank are expected to raise interest rates in the coming months. Higher rates typically restrain economic growth. Chinese metals demand was weak across the board in March and April but is expected to pick up in the second half of 2022 as China eases COVID restrictions and stimulates growth. The global copper market is expected to see a surplus of 142,000 tonnes this year and of 352,000 tonnes in 2023, the International Copper Study Group (ICSG) said. "World mine production this year is expected to benefit from additional output from new and expanded mines as well as an improvement in the general situation regarding the pandemic," the ICSG said in a release. Global refined copper production is expected to rise by about 4.3% in 2022 and 3.6% in 2023, mainly supported by the continued expansion of Chinese electrolytic capacity and new and expanded operations in the Democratic Republic of Congo (DRC). Technically market is under fresh selling as market has witnessed gain in open interest by 15.91% to settled at 3935 while prices down -5.6 rupees, now Copper is getting support at 766.7 and below same could see a test of 761.5 levels, and resistance is now likely to be seen at 777.6, a move above could see prices testing 783.3.

Trading Ideas:
# Copper trading range for the day is 761.5-783.3.
# Copper fell on concerns that slowing economic growth and COVID-19 lockdowns in top consumer China would depress demand.
# Weak U.S. economic data and Chinese efforts to control coronavirus outbreaks have fuelled fears that a global slowdown could be more severe
# Chinese metals demand was weak across the board in March and April but is expected to pick up in the second half of 2022

Zinc

Zinc yesterday settled down by -0.36% at 322.05 on concerns about the global economy's health and a firm U.S. dollar. Latest key indicators reinforce concerns about how supply chain bottlenecks, high inflation, and rising interest will impact global growth. New U.S. home sales fell 16.6% month-on-month in April, the largest decline in nine years. In top metals consumer China, COVID-19 lockdowns kept markets on edge, largely unexcited about Beijing's attempts to shore up the domestic economy through additional stimulus measures. The global zinc market moved to a deficit of 6,300 tonnes in March from a revised surplus of 26,500 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a surplus of 14,300 tonnes in February. During the first three months of 2022, ILZSG data showed a surplus of 11,000 tonnes versus a surplus of 108,000 tonnes in the same period of 2021. Around 13.5 million tonnes of zinc is produced and consumed each year. New orders for U.S.-made capital goods rose less than expected in April, pointing to some moderation in business spending on equipment early in the second quarter, and headwinds are growing from rising interest rates and tightening financial conditions. Technically market is under fresh selling as market has witnessed gain in open interest by 22.84% to settled at 1011 while prices down -1.15 rupees, now Zinc is getting support at 319 and below same could see a test of 315.9 levels, and resistance is now likely to be seen at 325.3, a move above could see prices testing 328.5.

Trading Ideas:
# Zinc trading range for the day is 315.9-328.5.
# Zinc dropped on concerns about the global economy's health and a firm U.S. dollar.
# New U.S. home sales fell 16.6% month-on-month in April, the largest decline in nine years.
# Global zinc market flips to deficit of 6,300 T in March – ILZSG

Aluminium

Aluminium yesterday settled down by -0.25% at 241.95 as the market worried about economic recession as the latest home sales data in the US indicated contracting demand. The US dollar index also pressured the futures market. The US April new home sales fell to a two-year low, while home prices rose sharply by nearly 20% year-on-year to a record high, suggesting that the housing market demand is cooling, and the market worries about weakening economic momentum. Aluminium capacity is resuming steadily and the output has grown palpably, but the pace may slow down. The demand side has not improved substantially yet though downstream production resumption is progressing smoothly. According to the General Administration of Customs, China exported 32,034 mt in April 2022, of which the exports with tariff number 76011010 stood at 333.8 mt and imports with tariff number 76011090 stood at 31,700.3 mt. China’s primary aluminium exports in April fell 24.2% on the month, up 64 times on the year. China exported 105,005.3 mt of primary aluminium from January to April in 2022, up 3611.6% on the year. Technically market is under fresh selling as market has witnessed gain in open interest by 13.18% to settled at 2499 while prices down -0.6 rupees, now Aluminium is getting support at 238.7 and below same could see a test of 235.4 levels, and resistance is now likely to be seen at 244.2, a move above could see prices testing 246.4.

Trading Ideas:
# Aluminium trading range for the day is 235.4-246.4.
# Aluminium dropped as the market worried about economic recession as the latest home sales data in the US indicated contracting demand.
# Aluminium capacity is resuming steadily and the output has grown palpably, but the pace may slow down.
# The demand side has not improved substantially yet though downstream production resumption is progressing smoothly.

Mentha oil

Mentha oil yesterday settled down by -0.35% at 1078.8 on profit booking after prices seen supported 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 gained by 9.4 Rupees to end at 1200.4 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.08% to settled at 1031 while prices down -3.8 rupees, now Mentha oil is getting support at 1072.1 and below same could see a test of 1065.4 levels, and resistance is now likely to be seen at 1088.7, a move above could see prices testing 1098.6.

Trading Ideas:
# Mentha oil trading range for the day is 1065.4-1098.6.
# In Sambhal spot market, Mentha oil gained  by 9.4 Rupees to end at 1200.4 Rupees per 360 kgs.
# Mentha oil dropped on profit booking after 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 down by -3.53% at 7916 due to good arrivals from new crop and less demand. 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 8304.4 Rupees dropped -124.65 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -2.86% to settled at while prices down -290 rupees, now Turmeric is getting support at 7792 and below same could see a test of 7666 levels, and resistance is now likely to be seen at 8130, a move above could see prices testing 8342.

Trading Ideas:
# Turmeric trading range for the day is 7666-8342.
# Turmeric remained under pressure due to good arrivals from new crop and less demand.
# 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 8304.4 Rupees dropped -124.65 Rupees.

Jeera

Jeera yesterday settled down by -2.14% at 21280 as the selling of cumin by the farmers increases after the onset of monsoon. Due to this, there is a perception that the arrival of cumin seeds will increase after the onset of monsoon. The demand for cumin seed for exports have improve after easing of supply chain disruption due to covid restrictions in China. Traders expect jeera production in 2021/22 sharply lower at 5.0-6.0 mln bags (1 bag = 55 kg) from 8.0-8.5 mln bags the previous year. As per govt data, jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes compared to 18300 tonnes while exports for FY 2021/22 (Apr-Feb) period is also down by 23% Y/Y at 2.02 lt compared to 2.62 lt last year. The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags. Considering the present arrivals, the production of cumin will be the same as the earlier estimate. So far 15 to 15.50 lakh bags have arrived in Rajasthan. 50% of the total cumin crop has arrived and 50% of cumin seeds are yet to arrive. Production of 15 lakh bags of cumin is estimated in Gujarat and 12 to 13 lakh tonnes of old carry forward stock is estimated. In Unjha, a key spot market in Gujarat, jeera edged down by -132.1 Rupees to end at 21468.4 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.5% to settled at while prices down -465 rupees, now Jeera is getting support at 21030 and below same could see a test of 20775 levels, and resistance is now likely to be seen at 21620, a move above could see prices testing 21955.

Trading Ideas:
# Jeera trading range for the day is 20775-21955.
# Jeera dropped as jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes
# The selling of cumin by the farmers increases after the onset of monsoon.
# The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags.
# In Unjha, a key spot market in Gujarat, jeera edged down by -132.1 Rupees to end at 21468.4 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.46% at 47830 as 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. The area under cotton is seen expanding in North India during the current kharif season, mainly in Haryana and Rajasthan. The trade expects the area to increase by 10-15 per cent. Seed firms say acreage may not rise as growers face water, weather problems. Indian traders and spinning mills should first meet demand from the local textile industry and only then export surplus raw cotton and yarn, Textile Minister Piyush Goyal told industry officials in a meeting. The minister's comments came after textile mills in the southern state of Tamil Nadu, a leading exporter of garments, went on a two-day strike earlier this week demanding a ban on exports. Goyal asked all stakeholders to resolve cotton and yarn price issues through collaboration rather than competition, without pushing the government to intervene as it may have long term impact on the cotton value chain. The USDA in its monthly report projected lower global supplies, consumption and ending stocks in 2022/23, while export sales data showed net sales of cotton for 2021/2022 fell 88% from the previous week and 76% from the prior 4-week average. In spot market, Cotton dropped by -360 Rupees to end at 48750 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 13.1% to settled at 2893 while prices up 220 rupees, now Cotton is getting support at 47110 and below same could see a test of 46380 levels, and resistance is now likely to be seen at 48280, a move above could see prices testing 48720.

Trading Ideas:
# Cotton trading range for the day is 46380-48720.
# Cotton gains as Global supplies in 2022/23 are projected below a year earlier
# Seed firms say acreage may not rise as growers face water, weather problems
# The area to increase by 10-15 per cent in North India.
# In spot market, Cotton dropped  by -360 Rupees to end at 48750 Rupees.

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