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Gold

Gold yesterday settled down by -0.1% at 59499 as the dollar edged down after U.S. president Joe Biden and House speaker Republican Kevin McCarthy have reached an agreement to suspend the $31.4 trillion debt ceiling until Jan. 1, 2025. The deal is now ready to move to Congress for a vote. As debt default worries recede, investors have shifted their focus to this week's U.S. jobs report for May and the upcoming FOMC meeting in June. U.S. consumer spending also increased more than expected in April, raising market expectations for another 25-bps rate hike from the Federal Reserve next month. China's net gold imports via Hong Kong rose by about 5% in April from the previous month, Hong Kong Census and Statistics Department data showed. Net imports into the world's top gold consumer stood at 49.906 tonnes in April, compared with 47.527 tonnes in March, the data showed. Total gold imports via Hong Kong were up 4.4% at 53.581 tonnes. 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. The country's official gold reserves fell by 80.8 tonnes in April to 491.2 tonnes, said World Gold Council's (WGC). Technically market is under fresh selling as the market has witnessed a gain in open interest by 11.52% to settle at 13736 while prices are down -61 rupees, now Gold is getting support at 59422 and below same could see a test of 59345 levels, and resistance is now likely to be seen at 59618, a move above could see prices testing 59737.
 

Trading Ideas:
* Gold trading range for the day is 59345-59737.
* Gold steadied as the dollar edged down
* China's net gold imports via Hong Kong rose 5% in April
* Investors have shifted their focus to this week's U.S. jobs report for May and the upcoming FOMC meeting in June

Silver

Silver yesterday settled down by -0.15% at 71125 weighed down by hawkish US Federal Reserve bets and news that a tentative US debt ceiling deal was reached over the weekend. President Joe Biden and House Speaker Kevin McCarthy reached an agreement in principle over the weekend to suspend the $31.4 trillion debt limit and expressed confidence that both Democrats and Republicans will support the deal. Meanwhile, stronger-than-expected US economic data bolstered expectations of further interest rate hikes from the Fed. Markets are now pricing in a higher chance that the Fed will deliver another 25 basis point rate hike in June, a shift from previous expectations for a pause in the tightening cycle. 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. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.59% to settle at 13826 while prices are down -104 rupees, now Silver is getting support at 70934 and below same could see a test of 70743 levels, and resistance is now likely to be seen at 71436, a move above could see prices testing 71747.
 

Trading Ideas:
* Silver trading range for the day is 70743-71747.
* Silver remained in range weighed down by hawkish US Federal Reserve bets
* Tentative US debt ceiling deal was reached over the weekend.
* Stronger-than-expected US economic data bolstered expectations of further interest rate hikes from the Fed.

Crude oil

Crude oil yesterday settled up by 0.53% at 6036 after the US government reached a tentative debt ceiling deal, alleviating market concerns about a possible default in the world’s largest economy and oil consumer. However concerns lingered regarding the impact on demand due to a sluggish economic recovery in China and the prospect of higher interest rates, particularly in the US. Investors are also preparing for an upcoming OPEC+ meeting later this week, following a warning from Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman, to "watch out" for potential consequences for short sellers. Meanwhile, Russian Deputy Prime Minister Alexander Novak stated that he anticipated no new measures from OPEC+ as the group recently implemented production cuts this month. An attack by two drones caused an explosion in Russia's Pskov region near the border with Belarus that left an oil pipeline's administrative building damaged, local Governor Mikhail Vedernikov said. Vedernikov did not point the finger at Ukraine, but Moscow has previously blamed Kyiv for similar incidents, some of which have caused damage to people and property hundreds of kilometres from its border with Ukraine. Ukraine has not publicly acknowledged launching attacks against targets inside Russia, but senior officials in Kyiv have on occasion appeared to welcome the news of successful drone attacks on Russian soil. Technically market is under short covering as the market has witnessed a drop in open interest by -3.18% to settle at 10231 while prices are up 32 rupees, now Crude oil is getting support at 5978 and below same could see a test of 5921 levels, and resistance is now likely to be seen at 6084, a move above could see prices testing 6133.
 

Trading Ideas:
* Crude oil trading range for the day is 5921-6133.
* Crude oil gains after the US government reached a tentative debt ceiling deal
* Investors welcomed a tentative deal on the US debt ceiling.
* Drone attack damages Russian oil pipeline building - governor

Natural gas
Nat.Gas yesterday settled down by -2.01% at 195.3 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 13.91% to settle at 33941 while prices are down -4 rupees, now Natural gas is getting support at 191.9 and below same could see a test of 188.6 levels, and resistance is now likely to be seen at 200.9, a move above could see prices testing 206.6.
 

Trading Ideas:
* Natural gas trading range for the day is 188.6-206.6.
* 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 0.26% at 714.3 as mounting supply concerns and expectations of government stimulus outweighed evidence of low purchasing activity. Major market players continued to flag concerns that copper supply cannot keep up with expectations of long-term demand, as the metal is a key raw material for the transition to renewable resources. Copper inventories at the Shanghai Futures Exchange fell to under 135 thousand tonnes in May, the lowest this year, and those at the London Metal Exchange were under 60 thousand tonnes, the lowest since 2005. Also, Chile said this year's output is estimated to sink as much as 7% after the 10.6% decline in 2022. In the meantime, concerning manufacturing activity and industrial growth figures in China ramped up bets of incoming stimulus measures from the Chinese government. The global refined copper market had a 2,000 tonne surplus in March, compared with a 196,000 tonne surplus the previous month, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output was 2.310 million tonnes and consumption was 2.308 million tonnes, the ICSG said. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.27% to settle at 6626 while prices are up 1.85 rupees, now Copper is getting support at 711.9 and below same could see a test of 709.3 levels, and resistance is now likely to be seen at 717.3, a move above could see prices testing 720.1.
 

Trading Ideas:
* Copper trading range for the day is 709.3-720.1.
* Copper gains on mounting supply concerns and expectations of stimulus
* Copper supply cannot keep up with expectations of long-term demand
* Copper inventories at the Shanghai Futures Exchange fell to under 135 thousand tonnes in May, the lowest this year

Zinc

Zinc yesterday settled up by 0.59% at 212.7 as market jitters eased as the debt ceiling agreement was basically reached. In addition, the US GDP and employment data in the first quarter showed that the US economy was relatively resilient, thus macro sentiment improved. Data last Thursday showed zinc stocks in LME-registered warehouses jumped 40% to 63,450 mt. Rising inventories suggest that excess supply is being stored in LME warehouses. LME zinc inventories have climbed more than 300% since early February. LME zinc cash-to-three-month contango was $7/mt last Wednesday, compared with a backwardation of $30/mt at the end of March. Three-month LME zinc prices had fallen more than 30% since January. 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 International Monetary Fund (IMF) raised its global growth outlook for 2023 on May 26. The IMF said it expects the global economy to grow 2.9% in 2023, an improvement from the 2.7% it forecast in October last year. Technically market is under short covering as the market has witnessed a drop in open interest by -2.01% to settle at 3751 while prices are up 1.25 rupees, now Zinc is getting support at 211.5 and below same could see a test of 210.3 levels, and resistance is now likely to be seen at 213.6, a move above could see prices testing 214.5.

Trading Ideas:
* Zinc trading range for the day is 210.3-214.5.
* Zinc rose as market jitters eased as debt ceiling agreement was basically reached
* The US GDP and employment data in the first quarter showed that the US economy was relatively resilient.
* LME zinc stocks jump 40% as excess supply is being stored in LME warehouses

Aluminium

Aluminium yesterday settled down by -0.05% at 207.75 as the simplified version of the US debt ceiling agreement was initially formed. In addition, the US GDP and employment data in the first quarter showed that the US economy was relatively resilient, thus macro sentiment improved. Low aluminium ingot inventory and little hope of smelters in Yunnan resuming production soon will support aluminium prices. However, poor consumption in the off-season will keep aluminium prices in check. The International Monetary Fund (IMF) raised its global growth outlook for 2023 on May 26. The IMF said it expects the global economy to grow 2.9% in 2023, an improvement from the 2.7% it forecast in October last year. The People’s Bank of China conducted a 7-day reverse repurchase operation of 25 billion yuan today, and the winning bid rate was 2.00%, which was the same as before. Maintenance and output cuts in some regions slowed down the decline in alumina prices, but are insufficient to reverse the downward trend. Some refineries with poor profit margins in Shanxi and Henan intend to expand capacity so as to dilute their production costs, but this could compound oversupply and weigh on alumina prices. Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.77% to settle at 2748 while prices are down -0.1 rupees, now Aluminium is getting support at 207.4 and below same could see a test of 206.9 levels, and resistance is now likely to be seen at 208.4, a move above could see prices testing 208.9.
 

Trading Ideas:
* Aluminium trading range for the day is 206.9-208.9.
* Aluminum steadied as the US debt ceiling agreement was initially formed.
* The People’s Bank of China conducted a 7-day reverse repurchase operation of 25 billion yuan
* IMF said it expects the global economy to grow 2.9% in 2023, an improvement from the 2.7% it forecast

Mentha oil

Mentha oil yesterday settled up by 0.43% at 967.1 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 gained by 12 Rupees to end at 1133.4 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 572 while prices are up 4.1 rupees, now Mentha oil is getting support at 961.8 and below same could see a test of 956.4 levels, and resistance is now likely to be seen at 970.8, a move above could see prices testing 974.4.
 

Trading Ideas:
* Mentha oil trading range for the day is 956.4-974.4.
* In Sambhal spot market, Mentha oil gained  by 12 Rupees to end at 1133.4 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 -0.2% at 8034 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 7473.05 Rupees dropped -11.8 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.91% to settle at 12575 while prices are down -16 rupees, now Turmeric is getting support at 7968 and below same could see a test of 7904 levels, and resistance is now likely to be seen at 8118, a move above could see prices testing 8204.

Trading Ideas:
* Turmeric trading range for the day is 7904-8204.
* 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 7473.05 Rupees dropped -11.8 Rupees

Jeera

Jeera yesterday settled up by 2.93% at 45305 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 up by 421.9 Rupees to end at 45918.35 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -1.93% to settle at 7452 while prices are up 1290 rupees, now Jeera is getting support at 44015 and below same could see a test of 42720 levels, and resistance is now likely to be seen at 46190, a move above could see prices testing 47070.

Trading Ideas:
* Jeera trading range for the day is 42720-47070.
* 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 up by 421.9 Rupees to end at 45918.35 Rupees per 100 kg.

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