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Gold
Gold yesterday settled up by 1.09% at 50986 as the dollar and Treasury yields retreated following a large but widely expected interest rate hike announcement from the Federal Reserve. The Fed delivered a 75 basis point rate increase, the largest since 1994, but indicated that moves of that scale likely wouldn’t become common. Fed Chair Jerome Powell also said that a 50 or 75 basis point increase “seems most likely” at the next meeting in July, indicating the central bank’s commitment to fighting inflation. Risk assets rallied in relief as the markets were very prepared for the Fed’s aggressive move, putting some pressure on the dollar and Treasury yields while supporting gold. The Perth Mint's sales of gold products rose in May about 21.7% from the previous month, while silver sales were highest since January, the refiner said. Monthly sales of gold coins and minted bars rose to 98,515 ounces from 80,941 ounces in April. Sales of silver products stood at 2,217,582 ounces in May, up 4.6% on a monthly basis. Demand for gold coins was strong, "boosted by the U.S. market where we fulfilled some large orders for fractionals (1/2oz or smaller) during the month". Technically market is under fresh buying as market has witnessed gain in open interest by 1.81% to settled at 13121 while prices up 548 rupees, now Gold is getting support at 50490 and below same could see a test of 49994 levels, and resistance is now likely to be seen at 51287, a move above could see prices testing 51588.
Trading Ideas:
* Gold trading range for the day is 49994-51588.
* Gold gains as the dollar and Treasury yields retreated following a large but widely expected interest rate hike announcement from the Federal Reserve.
* The Fed delivered a 75 basis point rate increase, the largest since 1994, but indicated that moves of that scale likely wouldn’t become common.
* Fed Chair Jerome Powell also said that a 50 or 75 basis point increase “seems most likely” at the next meeting in July

Silver
Silver yesterday settled up by 1.37% at 61527 buoyed by another dip in the dollar as investors assessed the implications of policy tightening by central banks to fight inflation. The Federal Reserve announced the biggest rate hike since 1994 and flagged economic risks. The number of Americans filing new claims for unemployment benefits fell less than expected last week, hinting at some cooling in the labor market, though conditions remain tight. Initial claims for state unemployment benefits slipped 3,000 to a seasonally adjusted 229,000 for the week ended June 11, the Labor Department said. The decline partially reversed the prior week's jump, which had lifted filings close to a five-month high, and was blamed on seasonal fluctuations around moving holidays like Memorial Day. Housing starts in the US sank 14.4% mom to an annualized 1.549 million units in May of 2022, the lowest reading since April last year and compared to market forecasts of 1.701 million. Still, figures for April were revised higher to 1.81 million starts, the strongest reading since May of 2006. Single-family housing starts dropped 9.2% to 1.051 million and starts for units in buildings with five units or more plunged 26.8% to 0.469 million. Technically market is under short covering as market has witnessed drop in open interest by -15.35% to settled at 10598 while prices up 830 rupees, now Silver is getting support at 60663 and below same could see a test of 59798 levels, and resistance is now likely to be seen at 62019, a move above could see prices testing 62510.
Trading Ideas:
* Silver trading range for the day is 59798-62510.
* Silver prices gains buoyed by another dip in the dollar as investors assessed the implications of policy tightening by central banks to fight inflation.
* The Federal Reserve announced the biggest rate hike since 1994 and flagged economic risks.
* The number of Americans filing new claims for unemployment benefits fell less than expected last week

Crude oil
Crude oil yesterday settled up by 0.18% at 9002 as tight supply levels outweighed concerns about the outlook for energy demand. Libyan oil output has reportedly collapsed to 100,000-150,000 barrels per day (bpd), a fraction of the 1.2 million bpd seen last year. Russia could continue cooperating within the OPEC+ oil production agreement beyond 2022, Deputy Prime Minister Alexander Novak said. Novak said details on the formulation of Russia's future agreement with OPEC would be clearer by the end of the year. "We will work to ensure the energy security of the oil market," Novak said in remarks at Russia's flagship annual economic forum in St. Petersburg. He added Russia saw the current situation on the global oil market as balanced. Russia's crude oil production rose to 9.273 million barrels per day (bpd) in May from 9.159 million bpd in April, an OPEC+ document showed. Meanwhile, data released by the Energy Information Administration (EIA) showed oil inventories in the U.S. rose by 2 million barrels last week to 418.7 million barrels, against expectations for a 1.3 million-barrel drop. Gasoline stockpiles dropped by 0.7 million barrels last week, against expectations for a 1.1 million-barrel rise, while distillate stockpiles rose by 0.7 million barrels, more than twice the expected increase. Technically market is under fresh buying as market has witnessed gain in open interest by 14.04% to settled at 4727 while prices up 16 rupees, now Crude oil is getting support at 8752 and below same could see a test of 8503 levels, and resistance is now likely to be seen at 9138, a move above could see prices testing 9275.
Trading Ideas:
* Crude oil trading range for the day is 8503-9275.
* Crude oil gains as tight supply levels outweighed concerns about the outlook for energy demand.
* Russia’s Deputy PM Novak: Russia can increase oil production in July.
* Russia’s Deputy PM Novak: Russian oil production is restoring as oil flows are redirected.

Natural Gas
Nat.Gas yesterday settled down by -2.01% at 580.6 amid bigger-than-usual stockpile build, a revised increase in the amount of gas in storage from the prior week and a decline in forecast U.S. gas demand this week due in part to the shutdown of the Freeport liquefied natural gas (LNG) export plant in Texas. The U.S. Energy Information Administration (EIA) said U.S. utilities added 92 billion cubic feet (bcf) of gas to storage during the week ended June 10. Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 94.8 bcfd so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 92.8 bcfd this week to 94.1 bcfd next week. The forecast for this week was lower than Refinitiv's outlook on Wednesday. Power demand in Texas will likely set new all-time highs on Thursday and Monday after breaking the prior record on June 12 as economic growth boosts overall use and homes and businesses keep air conditioners cranked up to escape a lingering heatwave. Technically market is under fresh selling as market has witnessed gain in open interest by 9.35% to settled at 3391 while prices down -11.9 rupees, now Natural gas is getting support at 559.6 and below same could see a test of 538.6 levels, and resistance is now likely to be seen at 614.1, a move above could see prices testing 647.6.
Trading Ideas:
* Natural gas trading range for the day is 538.6-647.6.
* Natural gas dropped amid bigger-than-usual stockpile build, a revised increase in the amount of gas in storage and a decline in forecast U.S. gas demand
* EIA said U.S. utilities added 92 billion cubic feet (bcf) of gas to storage during the week ended June 10.
* U.S. storage is currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019.

Copper
Copper yesterday settled down by -0.64% at 750.7 amid renewed concerns about slowing demand as top consumer China re-imposed COVID-19 lockdowns in Shanghai. Prices were already under pressure following disappointing Chinese services PMI figures released earlier this month, which, in turn, sparked concerns about slowing economic growth in the world's second-largest economy. At 121,525 tonnes, copper stocks in LME-registered warehouses have dropped more than 30% since the middle of May. China's economy showed signs of recovery in May after slumping in the prior month as industrial production rose unexpectedly. The U.S. central bank on Wednesday approved its biggest interest rate hike since 1994, lifting the target federal funds rate by 75 basis points to a range of between 1.5% and 1.75%.The world refined copper market showed a 25,000 tonne deficit in March, compared with a 95,000 tonnes surplus in February, the International Copper Study Group (ICSG) said in its latest monthly bulletin. In 2021 the market was in a deficit of 439,000 tonnes, against a 415,000 tonne shortfall a year earlier, the ICSG said. World refined copper output in March was 2.206 million tonnes while consumption was 2.231 million tonnes Technically market is under fresh selling as market has witnessed gain in open interest by 2.53% to settled at 4005 while prices down -4.8 rupees, now Copper is getting support at 739.6 and below same could see a test of 728.3 levels, and resistance is now likely to be seen at 762.1, a move above could see prices testing 773.3.
Trading Ideas:
* Copper trading range for the day is 728.3-773.3.
* Copper dropped amid renewed concerns about slowing demand as top consumer China re-imposed COVID-19 lockdowns in Shanghai.
* Prices were already under pressure following disappointing Chinese services PMI, sparked concerns about slowing economic growth.
* China's NDRC: Demand and supply recovery continue to pose challenges

Zinc
Zinc yesterday settled down by -0.36% at 316.05 as renewed COVID-19 restrictions in top consumer China rekindled demand worries. Risky assets also fell as the European Central Bank's rate-hike outlook unnerved investors amid heightened concerns about global slowdown. Total zinc inventories across seven major markets in China stood at 231,800 mt as of June 10, down 3,100 mt from June 6 and 6,800 mt from June 2. Overall, the inventory in the seven markets continued to decrease. China’s refined zinc output was 515,200 mt in May, an increase of 19,700 mt or 3.97% MoM and an increase of 4.16% YoY, SMM data showed. From January to May 2022, the combined refined zinc output is estimated to be 2.483 million mt, a decrease of 1.09% year on year. Survey showed that China's refined zinc output in May basically has met expectations. The output increased mainly because a large smelter in Yunnan resumed the production after maintenance. Meanwhile, some smelters in Shaanxi and Sichuan and a smelter in Inner Mongolia raised their operating rates, and some small smelters in Guangxi returned to normal production. China's annual inflation rate was at 2.1% in May 2022, unchanged from April's five month high figure and compared with market forecasts of 2.2%. Technically market is under fresh selling as market has witnessed gain in open interest by 8.63% to settled at 1209 while prices down -1.15 rupees, now Zinc is getting support at 309.7 and below same could see a test of 303.1 levels, and resistance is now likely to be seen at 322.9, a move above could see prices testing 329.5.
Trading Ideas:
* Zinc trading range for the day is 303.1-329.5.
* Zinc prices dropped as renewed COVID-19 restrictions in top consumer China rekindled demand worries.
* Risky assets also fell as the European Central Bank's rate-hike outlook unnerved investors amid heightened concerns about global slowdown.
* Goldman Sachs lowered its 2022 growth forecast to 4% from 4.5%, below China's official target of around 5.5%.

Aluminium
Aluminium yesterday settled down by -2.92% at 215.8 as China's monthly production of aluminium reached a record high in May following easing in power consumption curbs and as COVID-19-induced lockdowns had little impact on output. Aluminium stocks in LME-registered warehouses fell to a fresh 21-year low of 416,125 tonnes, compared with nearly 2 million tonnes in March 2021. Aluminium social inventory totalled 785,000 mt as of June 16, down 68,000 mt from last Thursday and down 138,000 mt from the end of May. Market transactions were active this week with falling aluminium prices. The inventory dropped the most in Wuxi, Foshan and Shanghai. Some sources were moved out of the social warehouses with the influences of the previous aluminium pledge scandal, and the downstream also purchased actively after aluminium prices dropped below 20,000 yuan/mt. The warehouses in Gongyi were less affected, and the local inventory fell slightly by 4,000 mt with the release of downstream demand. Aluminium billet social inventory dropped 21,100 mt on a weekly basis to 118,900 mt as of June 16. The inventory in Foshan and Nanchang fell 13,300 mt and 5,000 mt respectively, a weekly fall of 16.58% and 54.35% partly due to strong risk aversion demand with some goods transferred to private warehouses. Technically market is under fresh selling as market has witnessed gain in open interest by 8.06% to settled at 3203 while prices down -6.5 rupees, now Aluminium is getting support at 210.6 and below same could see a test of 205.2 levels, and resistance is now likely to be seen at 222.7, a move above could see prices testing 229.4.
Trading Ideas:
* Aluminium trading range for the day is 205.2-229.4.
* Aluminium stocks in LME-registered warehouses fell to a fresh 21-year low of 416,125 tonnes
* Aluminium social inventory totalled 785,000 mt as of June 16, down 68,000 mt from last Thursday and down 138,000 mt from the end of May.
* China May aluminium output up 3.1% y/y at 3.42 mln T – stats bureau

Mentha oil
Mentha oil yesterday settled up by 0.18% at 1049.8 on profit booking as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. However, downside seen limited amid low production this season and improving demand post-pandemic. 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. 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 we forecast 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. 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. In Sambhal spot market, Mentha oil dropped by -37.5 Rupees to end at 1156.4 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.63% to settled at 724 while prices up 1.9 rupees, now Mentha oil is getting support at 1044.5 and below same could see a test of 1039.1 levels, and resistance is now likely to be seen at 1053.9, a move above could see prices testing 1057.9.
Trading Ideas:
* Mentha oil trading range for the day is 1039.1-1057.9.
* In Sambhal spot market, Mentha oil dropped  by -37.5 Rupees to end at 1156.4 Rupees per 360 kgs.
* Mentha oil settled flat as Synthetic Mentha supply remains uninterrupted.
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.
* However, downside seen limited amid low production this season and improving demand post-pandemic.

Turmeric
Turmeric yesterday settled down by -1.47% at 7906 amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes while for the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average. 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. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. 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 8217.1 Rupees gained 113.1 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 0.48% to settled at 16800 while prices down -118 rupees, now Turmeric is getting support at 7812 and below same could see a test of 7718 levels, and resistance is now likely to be seen at 8028, a move above could see prices testing 8150.
Trading Ideas:
* Turmeric trading range for the day is 7718-8150.
* Turmeric dropped amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes
* For the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes.
* In Nizamabad, a major spot market in AP, the price ended at 8217.1 Rupees gained 113.1 Rupees.

Jeera
Jeera yesterday settled down by -0.54% at 21225 as Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021. However downside seen limited because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. 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. In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year. The arrival of cumin in Rajasthan has been only 50% in the peak season in the current year as compared to the previous years as the crop was less. There was a drought in Turkey and Syria and due to state tensions, the sowing of cumin seeds has been reported to be very low. Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan. In Unjha, a key spot market in Gujarat, jeera edged up by 6.7 Rupees to end at 21533.1 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -0.06% to settled at 14328 while prices down -115 rupees, now Jeera is getting support at 21070 and below same could see a test of 20920 levels, and resistance is now likely to be seen at 21400, a move above could see prices testing 21580.
Trading Ideas:
* Jeera trading range for the day is 20920-21580.
* Jeera dropped as Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021.
* In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year.
* Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan.
* In Unjha, a key spot market in Gujarat, jeera edged up by 6.7 Rupees to end at 21533.1 Rupees per 100 kg.

Cotton
Cotton yesterday settled up by 0.85% at 47220 as there were reports of 18 per cent less area under cotton sown than last year in Punjab. Despite the Punjab government setting a target to have 4 lakh hectares under cotton to reduce land under paddy, the state has witnessed an 18 per cent decrease from last year, when about 3.03 lakh hectares of the then targeted 3.25 lakh hectares were under cotton. Till now, cotton was sown on only 2.48 lakh hectares of land; the cotton sowing is almost over. USDA for 2022/23 raised its global production estimates. The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections compared with the previous month, and ending stocks are virtually unchanged. Global consumption is 450,000 bales lower, with the largest declines in Mexico, Bangladesh, and Vietnam. Beginning stocks for 2022/23 are also lower this month as a 1.5-million-bale decline in 2021/22 global production more than offsets a 1.25-million-bale decline in projected consumption. A 1.0- million-bale drop in India’s crop accounts for most of the production change, with lower yield expectations in Brazil accounting for the remainder. Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam. In spot market, Cotton dropped by -130 Rupees to end at 47560 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.46% to settled at 2300 while prices up 400 rupees, now Cotton is getting support at 46890 and below same could see a test of 46550 levels, and resistance is now likely to be seen at 47570, a move above could see prices testing 47910.
Trading Ideas:
* Cotton trading range for the day is 46550-47910.
* Cotton gained as there were reports of 18 per cent less area under cotton sown than last year in Punjab.
* The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections
* Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam.
* In spot market, Cotton dropped  by -130 Rupees to end at 47560 Rupees.

-www.kediaadvisory.com

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