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Gold

Gold yesterday settled down by -0.07% at 60197 as the dollar index edged higher to 103.5 as comments from several Fed officials raised expectations of prolonged higher interest rates. Fed’s Bullard suggested the possibility of raising rates by another half-point this year, while Fed's Kashkari described the decision to pause or hike rates in June as a close call. Traders are currently assigning a nearly 77% probability of a pause in the rate hike cycle next month while the likelihood of a 25bps hike rose to 23% from 20% last week. While the bullion market in top hub China experienced muted activity, a drop in local gold prices from record highs enticed some buyers back to India and forced dealers to cut discounts to a 10-week low. Compared to the $11 reduction from last week, Indian merchants offered discounts of up to $5 per ounce off of official domestic rates. India's imports of gold in April fell by 45% from a year ago to 16 tonnes as the rise in domestic prices reduced demand during a significant holiday. Premiums of $2 to $4 were imposed in China. While some Japanese dealers offered bullion at the same price as the rest of the world, others charged a $0.50 premium. Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.49% to settle at 8296 while prices are down -44 rupees, now Gold is getting support at 59875 and below same could see a test of 59554 levels, and resistance is now likely to be seen at 60381, a move above could see prices testing 60566.

Trading Ideas:
* Gold trading range for the day is 59554-60566.
* Gold dropped as the dollar index edged higher to 103.5
* Comments from several Fed officials raised expectations of prolonged higher interest rates.
* Fed’s Bullard suggested the possibility of raising rates by another half-point this year

Silver

Silver yesterday settled down by -0.78% at 72164 amid a stronger dollar as expectations grew that the Federal Reserve will keep interest rates higher for longer on stronger US data. Improved risk sentiment amid optimism about a U.S. debt ceiling deal also weighed on prices. Meanwhile, the Silver Institute predicts another substantial deficit in the market for 2023, following a record shortfall in 2022. Supply is expected to increase only slightly while demand is set to remain high, with industrial fabrication reaching another all-time high. Federal Reserve Bank of St. Louis President James Bullard backed two more interest-rate increases in 2023 and his Minneapolis colleague Neel Kashkari cautioned against reading too much into a June pause. The S&P Global Flash US Manufacturing PMI declined to 48.5 in May of 2023 from 50.2 in April, well below forecasts of 50, preliminary estimates showed. The reading pointed to the biggest contraction in the manufacturing sector in three months and a renewed deterioration in operating conditions. The S&P Global US Services PMI increased to 55.1 in May 2023, up from 53.6 the month before and well above market expectations of 52.6, a preliminary estimate showed. The rate of growth in activity was the fastest for just over a year, with firms linking the upturn to greater demand from new and existing clients. Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.36% to settle at 13678 while prices are down -569 rupees, now Silver is getting support at 71364 and below same could see a test of 70564 levels, and resistance is now likely to be seen at 72709, a move above could see prices testing 73254.

Trading Ideas:
* Silver trading range for the day is 70564-73254.
* Silver dropped as expectations grew that the Federal Reserve will keep interest rates higher
* Improved risk sentiment amid optimism about a U.S. debt ceiling deal also weighed on prices.
* Silver Institute predicts another substantial deficit in the market for 2023, following a record shortfall in 2022.

Crude oil

Crude oil yesterday settled up by 1.25% at 6092 supported by optimism the U.S. would avoid a debt default, a tighter market outlook and a warning from the Saudi energy minister to speculators that raised the prospect of further OPEC+ cuts to support the market. The gains added to a rally, when crude gained a tailwind from a 2.8% increase in U.S. gasoline futures ahead of the Memorial Day holiday on May 29 which traditionally marks the start of the peak summer demand season. On the U.S. debt ceiling, White House and congressional Republican negotiators will meet again to resolve an impasse over raising the $31.4 trillion debt limit, with the nation facing the risk of default in as little as nine days. Several members of the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, in May began voluntary production cuts which as well as higher U.S. gasoline demand are also expected to tighten supply. OPEC+ meets again on June 4, and Saudi Arabia's energy minister said he would keep short sellers - those betting that prices will fall - "ouching" and told them to "watch out". U.S. commercial crude oil stockpiles soared unexpectedly last week due to another release from the Strategic Petroleum Reserve, while gasoline inventories dropped as demand soared to its highest since 2021. Technically market is under short covering as the market has witnessed a drop in open interest by -7.1% to settle at 8069 while prices are up 75 rupees, now Crude oil is getting support at 5996 and below same could see a test of 5899 levels, and resistance is now likely to be seen at 6155, a move above could see prices testing 6217.

Trading Ideas:
* Crude oil trading range for the day is 5899-6217.
* Crude oil rose amid a tighter market outlook and a warning from the Saudi.
* Saudi Arabia warns speculators ahead of OPEC+ meeting
* Biden and McCarthy aides hunt for bipartisan debt ceiling deal

Natural gas

Nat.Gas yesterday settled down by -2.62% at 193.3 with U.S. output on track to hit a monthly record high and as exports from Canada increase as some producers in Alberta return to the wellpad after wildfires. The price decline came even though U.S. power generators have burned more gas in recent weeks to produce electricity due to low wind power, and as gas exports from Canada remain lower than normal due to wildfires in Alberta. Data provider Refinitiv said 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. Over the past few weeks, the average amount of gas flowing from Canada to the U.S. averaged just 7.0 bcfd as wildfires in Alberta and other western provinces caused some producers to shut oil and gas output, according to Refinitiv. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 6. Refinitiv forecast U.S. gas demand, including exports, would slide from 90.2 bcfd this week to 89.5 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Friday, while its forecast for next week was lower. Technically market is under long liquidation as the market has witnessed a drop in open interest by -24.18% to settle at 13145 while prices are down -5.2 rupees, now Natural gas is getting support at 190.9 and below same could see a test of 188.6 levels, and resistance is now likely to be seen at 197.4, a move above could see prices testing 201.6.

Trading Ideas:
* Natural gas trading range for the day is 188.6-201.6.
* Natural gas fell with U.S. output on track to hit a monthly record high
* The price decline came even though U.S. power generators have burned more gas in recent weeks
* Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 6.

Copper

Copper yesterday settled down by -0.67% at 712.6 as the dollar gains as expectations grew that U.S. interest rates will remain higher for longer and as the debt-ceiling impasse kept risk sentiment fragile. Rising copper inventories in LME exchange warehouses weighed on London prices, while declining stockpiles in SHFE warehouses provided some support to China prices. The mine supervisor union for Chile's Centinela mine, operated by mining company Antofagasta, decided to extend negotiations to avoid a strike, the union said. China's refined copper production in April jumped 14.1% year-on-year to 1.06 million tonnes, a record monthly high, data from the National Bureau of Statistics showed. On a daily basis, average copper output stood at 35,300 tonnes over the April period, according to Reuters calculations based on the official data. The People's Bank of China (PBoC) maintained its key lending rates steady for the ninth straight month at May fixing, as widely expected. The one-year loan prime rate (LPR), which the medium-term lending facility uses for corporate and household loans, was left unchanged at 3.65%; while the five-year rate, a reference for mortgages, was kept at 4.3%. The move came after the central bank held its medium-term policy rate at 2.75% last week Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.78% to settle at 2205 while prices are down -4.8 rupees, now Copper is getting support at 706.4 and below same could see a test of 700.1 levels, and resistance is now likely to be seen at 718.2, a move above could see prices testing 723.7.

Trading Ideas:
* Copper trading range for the day is 700.1-723.7.
* Copper fell as expectations grew that interest rates will remain higher
* Concerns about China metals demand also weighed on sentiment
* BofA reinforces copper 4Q23 forecast at $10,000/t ($4.54/lb)

Zinc

Zinc yesterday settled down by -2.92% at 214.75 as the global zinc market surplus climbed to 26,700 tonnes in March, from a surplus of 22,800 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. During the first three months of 2023, ILZSG data showed a surplus of 49,000 tonnes, versus a surplus of 116,000 tonnes in the same period of 2022. The refined zinc output in China declined 16,700 mt or 3.01% month-on-month, but rose 8.97% year-on-year to 540,000 mt. The output totalled 2.11 million mt from January to April, up 7.22% year-on-year. The alloy output registered 87,385 mt in April, up 4,775 mt on the month. Zinc ingot inventories across seven major Chinese markets totalled 116,900 mt as of May 19, down 5,500 mt from May 15 and 7,200 mt from May 12. Survey showed that the inventory in Shanghai, Guangdong and Tianjin declined 3,500 mt. In Guangdong and Shanghai markets, the downstream companies purchased some goods when zinc prices dropped, and the spot arrivals were not high. The inventory in the Tianjin market also decreased, which was contributed by the decline in spot shipments from smelters and the average downstream demand. Technically market is under long liquidation as the market has witnessed a drop in open interest by -10.84% to settle at 2557 while prices are down -6.45 rupees, now Zinc is getting support at 212.4 and below same could see a test of 210 levels, and resistance is now likely to be seen at 219.1, a move above could see prices testing 223.4.

Trading Ideas:
* Zinc trading range for the day is 210-223.4.
* Zinc dropped as the global zinc market surplus climbed to 26,700 tonnes in March
* During the first three months of 2023, ILZSG data showed a surplus of 49,000 tonnes
* The refined zinc output in China rose 8.97% year-on-year to 540,000 mt.

Aluminium

Aluminium yesterday settled down by -0.1% at 208.8 as recent economic data from China indicated a continued downward trend and a fragile recovery. The aluminium ingot social inventories across China’s eight major markets stood at 706,000 mt as of May 18, down 81,000 mt from a week ago and 259,000 mt from the same period last year. The inventories maintain a downward trend and remain at a low level. Judging from cargoes in transit and share of ingot output at smelters, the social inventory is on track to fall below 700,000 mt soon. The pace of cooling of US inflation is not enough for the Federal Reserve to suspend interest rate hikes, and the debt ceiling agreement has not yet been reached, thus there are many macro uncertainties. China's aluminium imports in April rose 27.1% from a year earlier, customs data showed, with domestic supply constrained by lingering power issues in the southwest. The world's biggest aluminium producer and consumer brought in 222,851 tonnes of unwrought aluminium and products – including primary metal and unwrought, alloyed aluminium – last month, according to data from the General Administration of Customs. Global primary aluminium output rose by 0.3% year on year in April to 5.628 million tonnes, data from the International Aluminium Institute (IAI) showed. Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.79% to settle at 2400 while prices are down -0.2 rupees, now Aluminium is getting support at 207.5 and below same could see a test of 206.1 levels, and resistance is now likely to be seen at 209.9, a move above could see prices testing 210.9.

Trading Ideas:
* Aluminium trading range for the day is 206.1-210.9.
* Aluminium dropped as data from China indicated a continued downward trend.
* Global aluminium output up 0.3% y/y to 5.6 mln T in April – IAI
* China exported 73,115 tonnes of alumina last month, down 56.4% on an annual basis

Mentha oil

Mentha oil yesterday settled up by 0.37% at 959.4 on low level buying after prices dropped on better sowing conditions in UP and Bihar. 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 -1.9 Rupees to end at 1131 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -35.83% to settle at 206 while prices are up 3.5 rupees, now Mentha oil is getting support at 956.5 and below same could see a test of 953.6 levels, and resistance is now likely to be seen at 962.1, a move above could see prices testing 964.8.

Trading Ideas:
* Mentha oil trading range for the day is 953.6-964.8.
* In Sambhal spot market, Mentha oil dropped  by -1.9 Rupees to end at 1131 Rupees per 360 kgs.
* Menthaoil gains on low level buying after prices dropped on better sowing conditions in UP and Bihar.
* 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 -1.03% at 7846 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 7401.7 Rupees dropped -85.25 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.11% to settle at 13905 while prices are down -82 rupees, now Turmeric is getting support at 7684 and below same could see a test of 7520 levels, and resistance is now likely to be seen at 7954, a move above could see prices testing 8060.

Trading Ideas:
* Turmeric trading range for the day is 7520-8060.
* Jeera dropped amid profit booking with increase in seasonal supply.
* Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce.
* India Meteorological Department projected onset of monsoon is likely to be delayed by three days.
* In Nizamabad, a major spot market in AP, the price ended at 7401.7 Rupees dropped -85.25 Rupees.

Jeera

Jeera yesterday settled down by -1.22% at 44100 amid profit booking with increase in seasonal supply. Surging imports of jeera at cheaper rate is also keeping market sentiments down. 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 -87.7 Rupees to end at 45918.95 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.47% to settle at 8454 while prices are down -545 rupees, now Jeera is getting support at 43255 and below same could see a test of 42405 levels, and resistance is now likely to be seen at 44900, a move above could see prices testing 45695.

Trading Ideas:
* Jeera trading range for the day is 42405-45695.
* Jeera dropped on profit booking due to good export demand
* 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 down by -87.7 Rupees to end at 45918.95 Rupees per 100 kg.

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