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Gold

Gold yesterday settled down by -1.04% at 59608 in the wake of a stronger-than-expected U.S. employment report for May, which falls into the camp of the U.S. monetary policy hawks. The Labor Department’s just-released employment situation report for May showed the key non-farm payrolls number up a solid 339,000; the number was seen coming in at up 190,000 and compares to the April non-farm jobs number of up a revised 294,000. The overall unemployment rate did up-tick to 3.7% in May from 3.4% in April. Physical gold demand slowed in India this week as a recovery in domestic prices prompted buyers to postpone purchases, while weakening of the Chinese currency underpinned premiums in the top consumer. Indian dealers were charging a premium of up to $4 an ounce over official domestic prices, up from the last week's premium of $3. In China, the top consumer of the precious metal, premiums of $1.50-$9 an ounce were charged over international benchmark spot prices, compared to last week's $2-$6.50 range. In Singapore, premiums between $1.50-$2.50 were charged. People were selling gold bars and jewellery to take profit and for liquidity. Japanese dealers sold bullion on par with global rates to a premium of $0.50. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.73% to settle at 14618 while prices are down -626 rupees, now Gold is getting support at 59341 and below same could see a test of 59074 levels, and resistance is now likely to be seen at 60115, a move above could see prices testing 60622.

Trading Ideas:
* Gold trading range for the day is 59074-60622.
* Gold dropped in the wake of a stronger-than-expected U.S. employment report for May
* The Labor Department’s just-released employment situation report for May showed the key non-farm payrolls number up a solid 339,000
* Physical gold demand slowed in India this week as a recovery in domestic prices prompted buyers to postpone purchases


Silver
Silver yesterday settled down by -0.79% at 72020 after the payrolls report showed a surprise strong job growth in the US. The US economy unexpectedly added 339K jobs, surpassing the forecast of 190K. However, the unemployment rate rose to a 7-month high of 3.7%, higher than the expected 3.5% and wage growth slowed as expected. Earlier, Fed Governor Philip Jefferson and Philadelphia Fed President Patrick Harker indicated that the central bank might skip a rate hike in the next meeting but emphasized that such a decision should not be interpreted as the end of the tightening cycle. Additionally, the House of Representatives approved the Fiscal Responsibility Act of 2023, which is expected to be approved by the Senate before the June 5 default deadline. The US Congress approved the deal to suspend the government's debt ceiling until 2025, erasing concerns of a default. Traders now assign a nearly 66% chance the Fed will leave interest rates steady this month, compared to 75% before the release. About 34% of investors now see the Fed raising rates by another 25bps. Meanwhile, the US Senate approved a bipartisan deal that would increase the federal debt ceiling, allaying fears of a historic default in the US. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.41% to settle at 13288 while prices are down -574 rupees, now Silver is getting support at 71635 and below same could see a test of 71249 levels, and resistance is now likely to be seen at 72703, a move above could see prices testing 73385.

Trading Ideas:
* Silver trading range for the day is 71249-73385.
* Silver dropped after payrolls report showed a surprise strong job growth in US.
* The US economy unexpectedly added 339K jobs, surpassing the forecast of 190K.
* Traders now assign a nearly 66% chance the Fed will leave interest rates steady this month


Crude oil
Crude oil yesterday settled up by 1.51% at 5916 after a U.S. debt ceiling deal averted a default and jobs data indicated a possible rate hike pause, while attention turned to a meeting of OPEC ministers and their allies at the weekend. Markets were reassured by a bipartisan deal to suspend the limit on the U.S. government's $31.4 billion debt ceiling, which staved off a sovereign default that would have rocked global financial markets. U.S. crude oil stockpiles in the Strategic Petroleum Reserve declined last week by about 2.5 million barrels to 355.4 million barrels, their lowest since September 1983, according to the Energy Information Administration. U.S. crude oil stockpiles rose unexpectedly last week, as imports jumped, while distillate inventories gained and gasoline drew down, the Energy Information Administration said. Crude inventories rose by 4.5 million barrels in the week to May 26, the EIA said, compared with expectations in a poll for a 1.4 million-barrel drop. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels last week, the EIA said. Refinery crude runs rose by 96,000 bpd, while refinery utilization rates rose by 1.4 percentage point in the week. Gasoline stocks fell by 200,000 barrels in the week, the EIA said, compared with expectations for a 500,000-barrel drop. Technically market is under short covering as the market has witnessed a drop in open interest by -22.13% to settle at 11426 while prices are up 88 rupees, now Crude oil is getting support at 5830 and below same could see a test of 5743 levels, and resistance is now likely to be seen at 5978, a move above could see prices testing 6039.

Trading Ideas:
* Crude oil trading range for the day is 5743-6039.
* Crude oil rose after a U.S. debt ceiling deal averted a default
* US SPR crude stocks fall to lowest since Sept. 1983 – EIA
* Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels last week, the EIA said.


Natural Gas
Nat.Gas yesterday settled up by 1.06% at 181.9 about on forecasts for more demand over the next two weeks than previously expected and record exports to Mexico. The price jump occurred despite near record U.S. output and continued low amounts of gas flowing to U.S. liquefied natural gas (LNG) export plants due to maintenance. Average gas output in the U.S. Lower 48 states has eased to 102.4 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May. Meteorologists projected the weather in the Lower 48 states would remain mostly near through June 15 before turning warmer than normal from June 16-17. Refinitiv forecast U.S. gas demand, including exports, would rise from 91.0 bcfd this week to 93.9 bcfd next week and 95.0 bcfd in two weeks as the weather turns seasonally warmer, prompting power generators to start burning more gas to meet rising air conditioning use. U.S. exports to Mexico have risen to 7.6 bcfd so far in June, up from 5.9 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021. Technically market is under short covering as the market has witnessed a drop in open interest by -4.36% to settle at 46959 while prices are up 1.9 rupees, now Natural gas is getting support at 177.8 and below same could see a test of 173.8 levels, and resistance is now likely to be seen at 185.3, a move above could see prices testing 188.8.

Trading Ideas:
* Natural gas trading range for the day is 173.8-188.8.
* Natural gas rose about on forecasts for more demand over the next two weeks.
* The price jump occurred despite near record U.S. output and continued low amounts of gas flowing to LNG export plants.
* Average gas output in the U.S. Lower 48 states has eased to 102.4 billion cubic feet per day (bcfd) so far in June


Copper
Copper yesterday settled up by 0.03% at 716.1 after a surprise rise in Chinese factory activity lifted hopes for improved demand while a deal to avert a U.S. debt default boosted stock markets and weakened the dollar. The Caixin/S&P Global manufacturing purchasing managers' index (PMI) showed that Chinese manufacturing activity unexpectedly swung to growth in May, contradicting a weaker official PMI reading earlier in the week. With investors also betting that the U.S. Federal Reserve will not raise interest rates further at its next meeting, appetite for riskier, growth-linked assets grew. Copper treatment and refining charges (TC/RCs) have been at a four-year high at $87.50 since last Thursday. Miners pay TC/RCs to smelters to process copper concentrate into refined metal, offsetting the cost of the ore. The charges rise when more concentrate is available. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.5 % from last Friday, the exchange said. Peru's government is optimistic the country can reclaim its status as the world's second-largest copper producer, its mining minister said, after the Democratic Republic of Congo overtook the South American country last year. Mining Minister Oscar Vera said Peru's copper industry can boost output of the key industrial metal as upcoming mining projects worth $6 billion come online over the next two years. Technically market is under short covering as the market has witnessed a drop in open interest by -2% to settle at 6210 while prices are up 0.2 rupees, now Copper is getting support at 712.9 and below same could see a test of 709.6 levels, and resistance is now likely to be seen at 722, a move above could see prices testing 727.8.

Trading Ideas:
* Copper trading range for the day is 709.6-727.8.
* Copper gains after a surprise rise in Chinese factory activity
* China’s PMI showed that Chinese manufacturing activity unexpectedly swung to growth in May
* Copper treatment and refining charges (TC/RCs) have been at a four-year high at $87.50


Zinc
Zinc yesterday settled up by 0.89% at 209.05 as China posted a surprising growth in factory activities, boosting sentiment and hope for better demand for metals. China's factory activity unexpectedly swung to growth in May from decline, a private sector survey showed, driven by improved production and demand, helping struggling firms that have been hit by slumping profits. Zinc inventories in London Metal Exchange-registered warehouses have nearly doubled since last week to a one-year peak after a shipment arrived in Malaysia, data published by the exchange showed. Steady arrivals of metal into storage facilities indicate there are surpluses of the metal used to galvanise steel due rising supply and weak demand from the construction sector. LME data showed that zinc deposited in LME warehouses has surged to 87,500 tonnes, up 92% since Tuesday last week and the strongest level since May 2022. The data showed the latest shipment of 13,175 tonnes arrived at warehouses in Port Klang, Malaysia, while most of the metal that built up last week moved into Singapore. LME zinc stocks have shot up 461% since early February, boosting confidence on the LME market about the availability of the metal for speedy delivery and creating a discount for the cash contract over the three-month contract. Technically market is under short covering as the market has witnessed a drop in open interest by -6.02% to settle at 3608 while prices are up 1.85 rupees, now Zinc is getting support at 207.3 and below same could see a test of 205.6 levels, and resistance is now likely to be seen at 210.9, a move above could see prices testing 212.8.

Trading Ideas:
* Zinc trading range for the day is 205.6-212.8.
* Zinc gains after growth in China’s factory activities, boosting sentiment
* PBoC conducted a 2 billion yuan 7-day reverse repurchase operation today, and the bid rate was 2.00%.
* Zinc inventories in London Metal Exchange-registered warehouses have nearly doubled since last week to a one-year peak.


Aluminium

Aluminium yesterday settled down by -0.43% at 207.6 weighed by weak demand and slowing growth around the world. Aluminium available to the market in London Metal Exchange (LME) approved warehouses fell to near four-month lows after large amounts of inventory were earmarked to leave the LME system, data from the exchange showed. Total stocks of aluminium in LME warehouses stand at 579,025 tonnes. Of that 42% or 243,525 tonnes has been set aside or cancelled for delivering out over coming weeks. LME stock data published with a two-day lag shows fresh cancellation of warrants – documents that confer ownership – of 56,425 tonnes in Port Klang in Malaysia, where cancelled warrants now amount to 79% of the total stock. Cancelling warrants indicates only an intention to take delivery of metal from LME warehouses, it can be rewarranted. Large warrant cancellations can cause concern about supplies on the LME market and influence price differences between contracts along the maturity curve. The price for the cash aluminium contract was $40.50 a tonne higher than that for the three-month future on Wednesday, matching the highs seen in February 2022. The premium flipped into a discount of $16 a tonne on Friday, suggesting no immediate concerns. Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.25% to settle at 2722 while prices are down -0.9 rupees, now Aluminium is getting support at 206.4 and below same could see a test of 205.3 levels, and resistance is now likely to be seen at 209.4, a move above could see prices testing 211.3.

Trading Ideas:
* Aluminium trading range for the day is 205.3-211.3.
* Aluminium prices dropped weighed by weak demand and slowing growth around the world.
* Available LME aluminium stocks fall to 4 – month low
* The price for the cash aluminium contract was $40.50 a tonne higher than that for the three-month future


Mentha oil
Mentha oil yesterday settled down by -0.89% at 950.3 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 -19.1 Rupees to end at 1112.9 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.84% to settle at 601 while prices are down -8.5 rupees, now Mentha oil is getting support at 946.6 and below same could see a test of 942.9 levels, and resistance is now likely to be seen at 954.5, a move above could see prices testing 958.7.

Trading Ideas:
# Mentha oil trading range for the day is 942.9-958.7.
# In Sambhal spot market, Mentha oil dropped  by -19.1 Rupees to end at 1112.9 Rupees per 360 kgs.
# Menthaoil dropped on better sowing and weak export demand.
# 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 -2.63% at 7538 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 7370 Rupees dropped -22.9 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -11.33% to settle at 9670 while prices are down -204 rupees, now Turmeric is getting support at 7472 and below same could see a test of 7406 levels, and resistance is now likely to be seen at 7648, a move above could see prices testing 7758.

Trading Ideas:
* Turmeric trading range for the day is 7406-7758.
* 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 7370 Rupees dropped -22.9 Rupees.


Jeera
Jeera yesterday settled up by 0.82% at 44765 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 245.5 Rupees to end at 46134 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -3.96% to settle at 6036 while prices are up 365 rupees, now Jeera is getting support at 44230 and below same could see a test of 43695 levels, and resistance is now likely to be seen at 45250, a move above could see prices testing 45735.

Trading Ideas:
* Jeera trading range for the day is 43695-45735.
* 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 245.5 Rupees to end at 46134 Rupees per 100 kg.

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