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Gold

Gold yesterday settled down by -0.18% at 59353 as the dollar index held near two-month highs above 104 lifted by growing expectations that US interest rates could stay elevated for longer than previously anticipated. The most recent PCE inflation data exceeded market expectations, leading to speculations that the Federal Reserve will maintain its hawkish stance and keep rates elevated for an extended period. Moreover, personal spending rose more than expected, and durable goods orders unexpectedly increased. Meanwhile, it looked like the White House and Republicans narrowed the differences and it is likely that the debt deal will be concluded before the deadline. Physical gold flipped to premiums in India for the first time in nearly three months, as retreating domestic prices along with the central bank's move to withdraw the country's highest value currency notes boosted buying. Indian dealers were charging a premium of up to $3 an ounce over official domestic prices, up from last week's discount of $5. In top bullion consumer China, gold changed hands between premiums of $2 and $6.50 to global prices, which were set for a third straight weekly drop. After buying more gold than any other central bank in 2022, Turkey went on a selling spree, offloading 81 tonnes in April and 15 tonnes in March. Technically market is under long liquidation as the market has witnessed a drop in open interest by -39.45% to settle at 3805 while prices are down -107 rupees, now Gold is getting support at 59166 and below same could see a test of 58978 levels, and resistance is now likely to be seen at 59601, a move above could see prices testing 59848.
Trading Ideas:
* Gold trading range for the day is 58978-59848.
* Gold dropped as the dollar index held near two-month highs above 104
* Dollar seen supported as growing expectations that US interest rates could stay elevated for longer than previously anticipated.
* Physical gold flipped to premiums in India for the first time in nearly three months

Silver

Silver yesterday settled up by 1.41% at 71229 as traders continue to follow the debt ceiling standoff. The White House and Republican negotiators were nearing a consensus on a compromise agreement to extend the debt ceiling for a duration of two years. Uncertainty prevails over the future course of interest rates, with Fed member Christopher Waller saying that the decision on interest rates next month will depend on data released in the next three weeks. Minneapolis Fed President Neil Kashkari said interest rates have to rise above 6 percent to bring inflation below the 2 percent target. Saint Louis Fed President James Bullard indicated the U.S. central bank might need to raised interest rates by another half a percentage point this year. The US trade deficit in goods widened to USD 96.8 billion in April of 2023 from the upwardly revised USD 84.6 billion in the previous month, compared to market expectations of a USD 85.7 billion gap, an advance estimate showed. The personal consumption expenditure prices in the US rose more than expected in April, reinforcing bets that the Federal Reserve will commit to its hawkish stance and leave rates elevated for a prolonged period. Personal spending in the United States jumped 0.8% mom in April of 2023, the most in three months. Technically market is under short covering as the market has witnessed a drop in open interest by -7.49% to settle at 13610 while prices are up 987 rupees, now Silver is getting support at 70593 and below same could see a test of 69956 levels, and resistance is now likely to be seen at 71648, a move above could see prices testing 72066.
Trading Ideas:
* Silver trading range for the day is 69956-72066.
* Silver prices gains as traders continue to follow the debt ceiling standoff.
* Fed’s Waller saying that the decision on interest rates next month will depend on data released in the next three weeks
* Fed’s Kashkari said interest rates have to rise above 6 percent to bring inflation below the 2 percent target

Crude oil

Crude oil yesterday settled up by 0.98% at 6004 as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting. A deal to raise the U.S. debt ceiling, which appears in sight, would likely boost oil prices. Russian President Vladimir Putin said on Wednesday that energy prices were approaching "economically justified" levels, also indicating there could be no immediate change to OPEC+'s production policy. The Russian remarks contrasted with comments this week from Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, the de-facto leader of the Organization of Petroleum Exporting Countries (OPEC), warning short sellers to "watch out". Russian Deputy Prime Minister Alexander Novak said he expected no new steps from OPEC+ at its meeting in Vienna on June 4. Saudi Arabia and other OPEC+ oil producers announced further oil output cuts of more than one million barrels per day in April after crude prices in March fell towards $70 a barrel, the lowest in 15 months. Novak also said he expected Brent to be above $80 a barrel by the end of the year, the state-owned news agency RIA reported. He noted that current prices of $75-76 are due to the market's assessment of the global macroeconomic situation. Technically market is under short covering as the market has witnessed a drop in open interest by -5.65% to settle at 10567 while prices are up 58 rupees, now Crude oil is getting support at 5947 and below same could see a test of 5889 levels, and resistance is now likely to be seen at 6056, a move above could see prices testing 6107.
Trading Ideas:
* Crude oil trading range for the day is 5889-6107.
* Crude oil gains on OPEC+ supply cut uncertainty
* A deal to raise the U.S. debt ceiling, which appears in sight, would likely boost oil prices.
* Russia's Novak does not expect new steps from OPEC+ meeting

Natural gas
Nat.Gas yesterday settled down by -1.68% at 199.3 on a collapse in global gas prices, record U.S. output, rising Canadian exports and forecasts for milder U.S. weather and lower than previously expected demand next week. Prices declined despite a lack of wind power in recent weeks that forced power generators to burn more gas to produce electricity, reducing the amount of gas left over to go into storage. Average gas output in the U.S. Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in May, which would top April's monthly record of 101.4 bcfd. Meteorologists projected the weather in the Lower 48 states would switch from cooler than normal from May 26-29 to mostly near normal from May 30-June 10. Refinitiv forecast U.S. gas demand, including exports, would ease from 90.8 bcfd this week to 89.7 bcfd next week with the coming of milder weather and the Memorial Day holiday on Monday before rising to 93.8 bcfd in two weeks as the weather turns seasonally warmer. US utilities added 96 billion cubic feet (bcf) of gas into storage during the week ended May 19, 2023, below market expectations of a 100 bcf increase. Technically market is under fresh selling as the market has witnessed a gain in open interest by 11.61% to settle at 29797 while prices are down -3.4 rupees, now Natural gas is getting support at 196.1 and below same could see a test of 192.9 levels, and resistance is now likely to be seen at 204.2, a move above could see prices testing 209.1.
Trading Ideas:
* Natural gas trading range for the day is 192.9-209.1.
* Natural gas fell on a collapse in global gas prices, record U.S. output
* Pressure also seen amid forecasts for milder U.S. weather and lower than previously expected demand next week.
* Prices declined despite a lack of wind power in recent weeks that forced power generators to burn more gas

Copper

Copper yesterday settled up by 1.4% at 712.45 boosted by better than expected U.S. economic data and signs that a deal to raise the U.S. debt ceiling is close, which eased worries of a default and weakened. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 15.9 % from last Friday, the exchange said. Speculators have amassed their biggest short positions in U.S. copper futures in 10 months as China's economic recovery falls short of expectations and rising interest rates slow growth in other countries, weakening demand for metal. Demand for the metal has been affected by the lackluster economic recovery, particularly in China. Unlike in previous slowdowns, the Chinese government has not implemented substantial infrastructure or property spending, depriving copper and other metals of a safety net. Moreover, copper inventories in the London Metal Exchange nearly doubled since mid-April, indicating weakness in demand on a global scale. This increase in supply relative to demand is evident in the wide contango spread between copper's spot price and three-month futures on the LME, the widest since 1994. Also, the global refined copper market registered a surplus in March, the International Copper Study Group said. Technically market is under short covering as the market has witnessed a drop in open interest by -9.45% to settle at 6543 while prices are up 9.85 rupees, now Copper is getting support at 706.4 and below same could see a test of 700.2 levels, and resistance is now likely to be seen at 716.4, a move above could see prices testing 720.2.
Trading Ideas:
* Copper trading range for the day is 700.2-720.2.
* Copper gains boosted by better than expected U.S. economic data
* Copper inventories in warehouses monitored by the SHFE fell 15.9 % from last Friday
* BofA reinforces copper 4Q23 forecast at $10,000/t ($4.54/lb)

Zinc

Zinc yesterday settled up by 2.52% at 211.45 as the market sentiment eased after substantial progress had been made on the US debt ceiling issue. Zinc ingot inventories across seven major Chinese markets totalled 103,700 mt as of May 26, down 10,300 mt from May 22 and 13,200 mt from May 19. Inventories in Shanghai, Guangdong and Tianjin dipped 11,200 mt in total. Zinc inventories in London Metal Exchange-registered warehouses jumped by 11,100 tonnes in Singapore, data published by the exchange showed, bringing growth over the last two reported days to 64%. These deliveries, signalling that there are surpluses of the metal used to galvanise steel due to weak demand from the construction sector and low prices, pushed the amount of zinc deposited in the LME-registered warehouses to 74,550 tonnes, the highest level in eight months. The LME, which publishes stock data with a two-day lag, said that deliveries of 11,125 tonnes of zinc were made to warehouses in Singapore and 25 tonnes were taken out, bringing total zinc stocks in that location to 62,975 tonnes. The discount closed at $13 a tonne compared with a premium of about $35 a tonne in early February. Technically market is under short covering as the market has witnessed a drop in open interest by -13.22% to settle at 3828 while prices are up 5.2 rupees, now Zinc is getting support at 209.2 and below same could see a test of 206.9 levels, and resistance is now likely to be seen at 213.1, a move above could see prices testing 214.7.
Trading Ideas:
* Zinc trading range for the day is 206.9-214.7.
* Zinc gains after substantial progress had been made on the US debt ceiling issue
* Zinc ingot inventories across seven major Chinese markets totalled 103,700 mt, down 10,300 mt
* Zinc inventories in LME warehouses jump 64% in two days

Aluminium

Aluminium yesterday settled up by 0.56% at 207.85 as the aluminium ingot social inventories across China’s eight major markets stood at 657,000 mt as of May 25, down 49,000 mt from a week ago and 273,000 mt from the same period last year. Cargo arrivals in south China fell sharply in the middle of this week and were less than 1,000 mt on Thursday May 25, while cargo outflows from local warehouses picked up slightly, driving down local stocks. Smelters stepped up shipments to east China after local aluminium prices exceeded those in south China. London Metal Exchange (LME) inventories of aluminium jumped by over 20,000 tonnes in Gwangyang, South Korea, a location that has seen large gains in recent months, data showed on Tuesday. The LME said its daily inventory report failed to show a delivery of 16,125 tonnes of aluminium T-bars into warehouses in Gwangyang, due to an error, but the totals were correct. The total showed aluminium inventories in Gwangyang in warehouses certified by the LME surged by 20,875 tonnes, bring the total in all global LME storage facilities to 575,875 tonnes. Gwangyang is a key location for aluminium storage, making up 41% of total LME inventories. Since March 1, aluminium stored in the port has jumped by 38%. Technically market is under short covering as the market has witnessed a drop in open interest by -2.29% to settle at 2727 while prices are up 1.15 rupees, now Aluminium is getting support at 207 and below same could see a test of 206 levels, and resistance is now likely to be seen at 208.8, a move above could see prices testing 209.6.
Trading Ideas:
* Aluminium trading range for the day is 206-209.6.
* Aluminum gains as China’s ingot inventories dropped 49,000 mt from last week
* China’s Aluminium billet social inventory stood at 141,300 mt, down 20,700 mt from a week ago.
* LME aluminium stocks climb by over 20,000 T in South Korea

Mentha oil

Mentha oil yesterday settled up by 0.15% at 963 due to short covering due to shrinking supplies in the market. However, upside seen limited on better sowing conditions in UP and Bihar and weak export demand. 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 -4 Rupees to end at 1128 Rupees per 360 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.35% to settle at 570 while prices are up 1.4 rupees, now Mentha oil is getting support at 959.9 and below same could see a test of 956.7 levels, and resistance is now likely to be seen at 965.9, a move above could see prices testing 968.7.
Trading Ideas:
* Mentha oil trading range for the day is 956.7-968.7.
* In Sambhal spot market, Mentha oil dropped  by -4 Rupees to end at 1128 Rupees per 360 kgs.
* Menthaoil gains due to short covering due to shrinking supplies in the market.
* 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 -1.2% at 8050 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 7482.45 Rupees gained 28.65 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.01% to settle at 12690 while prices are down -98 rupees, now Turmeric is getting support at 7960 and below same could see a test of 7870 levels, and resistance is now likely to be seen at 8180, a move above could see prices testing 8310.
Trading Ideas:
* Turmeric trading range for the day is 7870-8310.
* Turmeric dropped 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.
* In Nizamabad, a major spot market in AP, the price ended at 7482.45 Rupees gained 28.65 Rupees.

Jeera

Jeera yesterday settled up by 0.7% at 44015 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. Marginal traders are avoiding bulk buying in anticipation of rise in seasonal supply of jeera in Gujarat and Rajasthan. 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 -534.95 Rupees to end at 45681.4 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -2.58% to settle at 7599 while prices are up 305 rupees, now Jeera is getting support at 43200 and below same could see a test of 42385 levels, and resistance is now likely to be seen at 44510, a move above could see prices testing 45005.
Trading Ideas:
* Jeera trading range for the day is 42385-45005.
* Jeera gains due to good export demand and expectations of lower stocks
* Prices rose on crop worries grow due to unseasonal rains and hailstorms in Rajasthan
* The market is expecting a lower yield and quality of jeera this season
* In Unjha, a key spot market in Gujarat, jeera edged down by -534.95 Rupees to end at 45681.4 Rupees per 100 kg.

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