IGI Logo

Gold

Gold yesterday settled down by -1.28% at 60244 after U.S. central bank officials indicated they expect interest rates to stay high, while investors looked ahead to a key meeting for the outcome of debt-ceiling negotiations in Washington. Several Fed policymakers signalled they see interest rates staying high, with Richmond Fed President Thomas Barkin saying he is not convinced inflation is on a steady decline back to the U.S. central bank’s 2% target. US retail sales coming in short of market expectations in April, which showed consumers slowing their activity. U.S. retail sales rose 0.4% last month following a downwardly revised drop of 0.7% in March, according to the latest data from the U.S. Commerce Department. Physical gold demand in India improved slightly as domestic prices eased from recent record highs, while demand was weak in other Asian centres with some dealers offering discounts in top bullion consumer China to attract buyers. Indian dealers were offering a discount of up to $11 an ounce over official domestic prices down from last week's discount of $23. Indian gold demand in the March-quarter fell 17% to the lowest level in 10 quarters and is likely to remain subdued even during June and September quarters on record-high prices, the World Gold Council said. Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.17% to settle at 11780 while prices are down -783 rupees, now Gold is getting support at 59790 and below same could see a test of 59336 levels, and resistance is now likely to be seen at 61098, a move above could see prices testing 61952.

Trading Ideas:
* Gold trading range for the day is 59336-61952.
* Gold fell after U.S. officials indicated they expect interest rates to stay high
* Investors looked ahead to a key meeting for the outcome of debt-ceiling negotiations in Washington
* US retail sales coming in short of market expectations in April, which showed consumers slowing their activity.

Silver

Silver yesterday settled down by -1.11% at 72585 as investors digested hawkish comments from Federal Reserve officials and awaited the outcome of debt-ceiling negotiations in Washington. President Joe Biden announced that he would meet with congressional leaders to discuss a plan for raising the nation's debt limit. In the meantime, traders continue to bet the Federal Reserve will pause rate hikes during its upcoming meeting next month. Chicago Fed President Austan Goolsbee said in interview that the U.S. central bank is trying to slow inflation without sending the economy into a recession. Goolsbee's comments followed those of Fed Governor Michelle Bowman who warned there is no 'consistent evidence' that inflation is under control. U.S. President Joe Biden said he remains "optimistic" about finding an agreement with his Republican opponents to raise the U.S. debt limit and avoid a default. This week's trading may be impacted by reaction to the latest U.S. economic data, including reports on retail sales, industrial production, housing starts and existing home sales. Traders also await speeches from several Fed officials, including Fed Chair Jerome Powell's speech on Friday, heading to the Fed's June meeting. Chinese data on industrial production, retail sales and fixed asset investment are due on Tuesday. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.75% to settle at 15225 while prices are down -817 rupees, now Silver is getting support at 72169 and below same could see a test of 71752 levels, and resistance is now likely to be seen at 73168, a move above could see prices testing 73750.

Trading Ideas:
* Silver trading range for the day is 71752-73750.
* Silver dropped as investors digested hawkish comments from Fed officials
* U.S. central bank is trying to slow inflation without sending the economy into a recession.
* Eurozone economic growth will be faster than previous forecast this year and next.

Crude oil

Crude oil yesterday settled down by -0.49% at 5834 as weaker-than-expected economic data from the US and China hurt the demand outlook in the world’s two biggest oil consumers. The International Energy Agency raised its forecasts for global demand on oil by 200 thousand bpd this year to a record 102 million bpd. The EIA pointed to Chinese economy's recovery after lifting Covid 19 restrictions, with demand there surging to a record 16 million bpd in March. "The current market pessimism ... stands in stark contrast to the tighter market balances we anticipate in the second half of the year, when demand is expected to eclipse supply by almost. 2 million barrels per day (bpd)." Iraq does not expect OPEC+ to make further cuts to oil output at its next meeting in June, its oil minister Hayan Abdel-Ghani said, in the first indication from an OPEC minister about a potential decision as oil prices slide. "At the next meeting, which will be held on the 3rd and 4th (of June), there will be no additional reduction, and as for Iraq, we cannot reduce further," Abdel-Ghani said in an interview, his first to foreign media since taking office last year. Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.64% to settle at 10244 while prices are down -29 rupees, now Crude oil is getting support at 5794 and below same could see a test of 5754 levels, and resistance is now likely to be seen at 5888, a move above could see prices testing 5942.

Trading Ideas:
* Crude oil trading range for the day is 5754-5942.
* Crude oil dropped as weak economic data from China hurt the demand.
* IEA raised its forecasts for global demand on oil by 200 thousand bpd this year to a record 102 million bpd.
* IEA says oil price downturn ignores looming supply crunch

Natural Gas

Nat.Gas yesterday settled up by 1.39% at 196.9 on concerns over a decline in future production after data last week showed energy companies had cut down on the number of rigs for drilling gas. Baker Hughes Co said the gas rig count, an early indicator of future output, fell by 16 to 141 in the week to May 12, the lowest since April 2022. Weekly gas rig decline was the most since February 2016. Data provider Refinitiv said average gas output in the U.S. Lower 48 states was 101.4 billion cubic feet per day (bcfd) so far in May, matching the monthly record high in April. Refinitiv forecasts that U.S. gas demand, including exports, would fall from 91.7 billion cubic feet per day (bcfd) this week to 89.0 bcfd next week. Meteorologists projected the weather in the U.S. Lower 48 states would switch from warmer-than-normal levels from May 12-17 to near-normal from May 18-27. Gas flows to the seven big U.S. LNG export plants fell to an average of 13.1 bcfd so far in May, down from a record 14.0 bcfd in April. The decline was due mostly to reductions at Cameron LNG's terminal in Louisiana and Cheniere Energy Inc's Sabine Pass in Louisiana. Technically market is under short covering as the market has witnessed a drop in open interest by -12.1% to settle at 27013 while prices are up 2.7 rupees, now Natural gas is getting support at 192.2 and below same could see a test of 187.6 levels, and resistance is now likely to be seen at 202.2, a move above could see prices testing 207.6.

Trading Ideas:
* Natural gas trading range for the day is 187.6-207.6.
* Natural gas climbed on concerns over a decline in future production
* Data showed energy companies had cut down on the number of rigs for drilling gas.
* Average gas output in the U.S. Lower 48 states was 101.4 bcfd so far in May.*

Copper

Copper yesterday settled down by -1.74% at 715.45 as data from China suggested that its economic recovery is losing momentum, worsening the outlook for metals demand. China's April industrial output and retail sales growth undershot forecasts, the latest in a run of weak figures, with property investment and sales weakening and the metals-intensive manufacturing sector shrinking in April. Chinese copper import premiums are trending lower, suggesting slack appetite for metal held overseas, and the yuan is weakening against the dollar. Copper inventories are still falling in Chinese exchange warehouses, but stocks in the LME system have swelled to 83,825 tonnes, the most since January. Unusually, almost none of that LME copper – a mere 125 tonnes – is earmarked for delivery. Cash copper now trades at close to a $50 a tonne discount to the three-month contract, implying ample supply. Speculators in U.S. copper futures have taken note, building their most bearish position since last August. China's retail sales increased by 18.4% from the prior year in April 2023, sharply accelerating from a 10.6% gain in the prior month and compared with market forecasts of 21.0%. This was the third straight month of growth in retail trade and the strongest pace since March 2021. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.45% to settle at 4942 while prices are down -12.65 rupees, now Copper is getting support at 710.6 and below same could see a test of 705.7 levels, and resistance is now likely to be seen at 723.9, a move above could see prices testing 732.3.

Trading Ideas:
* Copper trading range for the day is 705.7-732.3.
* Copper fell as China’s economic recovery is losing momentum
* Chinese copper import premiums are trending lower, suggesting slack appetite for metal held overseas.
* Stocks in the LME system have swelled to 83,825 tonnes, the most since January.

Zinc

Zinc yesterday settled down by -1.62% at 225.35 as after China's April industrial output and retail sales growth missed forecasts, underscoring signs of an uneven economic recovery for the world's top metals consumer. China's industrial production expanded by 5.6% year-on-year in April 2023, below market forecasts of 10.9%, but faster than a 3.9% rise in March. It was the fastest growth in industrial production since last September. Considering the first four months of the year, industrial production advanced by 3.6% from the same period in 2022. In 2022, industrial production grew by 3.6%. China's fixed-asset investment grew by 4.7 percent year-on-year to CNY 10.73 trillion in the first four months of 2023, missing market forecasts of 5.5 percent and easing from a 5.1 percent rise in the prior period. China's surveyed urban unemployment rate declined to a 16-month low of 5.2% in April 2023 from 5.3% in the previous month. For 2023, the government has targeted a jobless rate of around 5.5%, with the creation of about 12 million new urban jobs. China's retail sales increased by 18.4% from the prior year in April 2023, sharply accelerating from a 10.6% gain in the prior month and compared with market forecasts of 21.0%. Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.23% to settle at 3771 while prices are down -3.7 rupees, now Zinc is getting support at 224.1 and below same could see a test of 222.7 levels, and resistance is now likely to be seen at 227.8, a move above could see prices testing 230.1.

Trading Ideas:
* Zinc trading range for the day is 222.7-230.1.
* Zinc dropped as China activity data highlights patchy recovery
* China's manufacturing recovery falls short of expectations and growth slows in the rest of the world.
* China's industrial production expanded by 5.6% year-on-year in April 2023, below market forecasts of 10.9%

Aluminium

Aluminium yesterday settled down by -0.51% at 206.65 as China's primary aluminium production rose 0.8%% to 3.33 million tonnes in April from the same month a year earlier, data from the National Bureau of Statistics showed. For the first four months of the year, China produced 13.3 million tonnes, up 3.9% from the corresponding period in 2022, the data showed. China's aluminium output in April fell 1.2% from March, data showed, as power curbs in the southwest limited production of the metal. China produced 3.33 million tonnes of aluminium last month, down from 3.37 million tonnes in March, though that was up 0.8% compared with a year ago, according to data from the National Bureau of Statistics. Output growth is being capped by ongoing issues in Yunnan province, China's fourth biggest aluminium-producing province, with about 12% of the country's total capacity. Yunnan relies heavily on hydropower for power generation but has asked aluminium producers to cut production since last September amid low rainfall and water levels. Average daily output for April of 111,000 tonnes was slightly higher than March levels of 108,710 tonnes, according to calculations. China's industrial production expanded by 5.6% year-on-year in April 2023, below market forecasts of 10.9%, but faster than a 3.9% rise in March. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.77% to settle at 2976 while prices are down -1.05 rupees, now Aluminium is getting support at 206 and below same could see a test of 205.1 levels, and resistance is now likely to be seen at 207.8, a move above could see prices testing 208.7.

Trading Ideas:
* Aluminium trading range for the day is 205.1-208.7.
* Aluminium dropped as China Jan – April aluminium output up 3.9% y/y
* China April aluminium output down 1.2% on prior month on power curbs
* China's industrial production expanded by 5.6% year-on-year in April 2023

Mentha oil

Mentha oil yesterday settled down by -0.26% at 952.8 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-Feb 2023, dropped by 10.67 percent to 2,227.55 tonnes as compared to 2,493.53 tonnes exported during Apr-Feb 2022. In February 2023 around 210.78 tonnes of Mentha was exported as against 233.21 tonnes in January 2023 showing a drop of 9.62%. In February 2023 around 210.78 tonnes of Mentha was exported as against 157.90 tonnes in February 2022 showing a rise of 33.49%. 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 -3.1 Rupees to end at 1127.3 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.43% to settle at 591 while prices are down -2.5 rupees, now Mentha oil is getting support at 948.6 and below same could see a test of 944.3 levels, and resistance is now likely to be seen at 958.1, a move above could see prices testing 963.3.

Trading Ideas:
* Mentha oil trading range for the day is 944.3-963.3.
* In Sambhal spot market, Mentha oil dropped  by -3.1 Rupees to end at 1127.3 Rupees per 360 kgs.
* Mentha oil prices dropped on better sowing conditions
* 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 up by 3.19% at 8532 as there were report of some fall in crop yields in the Marathwada region of Maharashtra due to rain in the last week. Support also seen as the untimely rains that occurred in various places in the Andhra Pradesh damaged turmeric crops causing huge loss to the farmers. Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall. Arrivals of new crop has improved as about 7-8 lakh bags touched the Nizamabad market so far wherein about 7 lakh bags were reported in Sangli. Market is running with huge stocks and stockists are trying to release their stocks on every rise in prices. Turmeric exports during Apr-Feb 2023, rose by 10.42 percent at 151,298.89 tonnes as compared to 137,017.23 tonnes exported during Apr- Feb 2022. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 12,484.25 tonnes in January 2023 showing a rise of 18.60%. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 10,358.22 tonnes in February 2022 showing a rise of 42.94%. 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 7459.45 Rupees dropped -6.05 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.64% to settle at 15950 while prices are up 264 rupees, now Turmeric is getting support at 8230 and below same could see a test of 7930 levels, and resistance is now likely to be seen at 8710, a move above could see prices testing 8890.

Trading Ideas:
* Turmeric trading range for the day is 7930-8890.
* Turmeric prices rose on report of fall in yields
* Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall.
* Turmeric exports during Apr-Jan 2023, rose by 7.76 percent at 1,36,492.59 tonnes
* In Nizamabad, a major spot market in AP, the price ended at 7459.45 Rupees dropped -6.05 Rupees.

Jeera

Jeera yesterday settled down by -0.99% at 45915 on profit booking after prices rose 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. 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 -863.15 Rupees to end at 46408.05 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.63% to settle at 9477 while prices are down -460 rupees, now Jeera is getting support at 44775 and below same could see a test of 43640 levels, and resistance is now likely to be seen at 46575, a move above could see prices testing 47240.

Trading Ideas:
* Jeera trading range for the day is 43640-47240.
* Jeera dropped on profit booking after rose 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 -863.15 Rupees to end at 46408.05 Rupees per 100 kg.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer