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Gold

Gold yesterday settled up by 0.84% at 59998 as U.S. Treasury yields eased due to the tentative deal on raising the United States debt ceiling over the weekend. A cautious undertone prevails in financial markets as the U.S. debt ceiling deal readies for vote. Amid much uncertainty over U.S. monetary policy, investors now await U.S. manufacturing readings, the nonfarm payrolls data due later in the week and the upcoming Fed policy meeting in June for directional cues. The central bank of Iraq reported last week that a larger shift into gold is in the works as it increased its gold reserves by 2% in a single day. Iraq increased its total gold holdings to 132.73 tonnes after purchasing 2.5 tonnes of gold. In order to increase reserves with a commodity seen as a safe haven during times of economic adversity and a continuing de-dollarization trend, central banks purchased record amounts of gold last year. Iraq also took advantage of the year's reduced prices to start buying gold again after a four-year hiatus. A year ago, Iraq made a one-time purchase of 34 tonnes of gold, increasing its gold reserves by 35%. Technically market is under fresh buying as the market has witnessed a gain in open interest by 8.76% to settle at 14939 while prices are up 499 rupees, now Gold is getting support at 59482 and below same could see a test of 58965 levels, and resistance is now likely to be seen at 60308, a move above could see prices testing 60617.

Trading Ideas:
* Gold trading range for the day is 58965-60617.
* Gold recovered from lows as U.S. Treasury yields eased.
* A cautious undertone prevails in financial markets as the U.S. debt ceiling deal readies for vote.
* In a single day, Iraq raises its gold holdings by 2%

Silver

Silver yesterday settled down by -0.12% at 71043 amid a hawkish outlook for the Federal Reserve and lower demand for the safety of bullion. US President Biden signaled that the US government is set to agree on terms of raising its debt ceiling, easing recent concerns of a catastrophic default. In the meantime, stubborn inflation and evidence that the US economy has been resilient to higher borrowing costs supported bets that the Federal Reserve may extend its tightening campaign at its June meeting. Consequently, investors reduced positions for non-interest-bearing assets, such as precious metals. In the meantime, indices tracking the performance of solar panel companies hovered at seven-month lows amid a batch of weak corporate earnings, limiting demand for the technology’s key input metal. 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. Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.03% to settle at 14106 while prices are down -82 rupees, now Silver is getting support at 70536 and below same could see a test of 70028 levels, and resistance is now likely to be seen at 71500, a move above could see prices testing 71956.

Trading Ideas:
* Silver trading range for the day is 70028-71956.
* Silver dropped amid a hawkish outlook for the Federal Reserve and lower demand
* 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 down by -4.64% at 5756 as concerns about the U.S. debt ceiling pact cooled the market's risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend. Saudi Arabian Energy Minister Abdulaziz bin Salman last week warned short-sellers betting that oil prices will fall to "watch out" in a possible signal that OPEC+ may cut output. However, comments from Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate the world's third-largest oil producer is leaning toward leaving output unchanged. In April, Saudi Arabia and other members of OPEC+ announced further oil output cuts of around 1.2 million barrels per day (bpd), bringing the total volume of cuts by OPEC+ to 3.66 million bpd. Russian Deputy Prime Minister Alexander Novak stated that he anticipated no new measures from OPEC+ as the group just implemented production cuts this month. U.S. crude oil and distillate inventories fell unexpectedly last week, while gasoline stockpiles rose more than forecast, the Energy Information Administration said. Crude inventories fell by 12.5 million barrels in the week to May 19 to 455.2 million barrels, compared with expectations in a poll for an 800,000-barrel rise. Technically market is under fresh selling as the market has witnessed a gain in open interest by 65.26% to settle at 16908 while prices are down -280 rupees, now Crude oil is getting support at 5653 and below same could see a test of 5550 levels, and resistance is now likely to be seen at 5940, a move above could see prices testing 6124.

Trading Ideas:
* Crude oil trading range for the day is 5550-6124.
* Crude oil falls on US debt deal struggles, OPEC+ talks uncertainty
* OPEC will welcome Iran’s full return to oil market when sanctions lifted -secretary general
* Saudi Arabian Energy Minister warned short-sellers betting that oil prices will fall to "watch out" in a possible signal that OPEC+ may cut output.

Natural Gas

Nat.Gas yesterday settled down by -3.07% at 189.3 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 12.47% to settle at 38173 while prices are down -6 rupees, now Natural gas is getting support at 185.9 and below same could see a test of 182.6 levels, and resistance is now likely to be seen at 194.9, a move above could see prices testing 200.6.

Trading Ideas:
* Natural gas trading range for the day is 182.6-200.6.
* 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 down by -0.5% at 710.75 ahead of Chinese data that is expected to show a further contraction in factory activity. Chinese Yangshan copper import premiums at $37.50 a tonne are stuck well below their long term average, and copper stocks in LME warehouses have almost doubled since mid-April to 100,000 tonnes. 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 selling as the market has witnessed a gain in open interest by 0.32% to settle at 6647 while prices are down -3.55 rupees, now Copper is getting support at 706.7 and below same could see a test of 702.5 levels, and resistance is now likely to be seen at 715.3, a move above could see prices testing 719.7.

Trading Ideas:
* Copper trading range for the day is 702.5-719.7.
* Copper dropped ahead of Chinese data that is expected to show a further contraction in factory activity.
* Chinese Yangshan copper import premiums at $37.50 a tonne are stuck well below their long term average
* Copper stocks in LME warehouses have almost doubled since mid-April to 100,000 tonnes.

Zinc

Zinc yesterday settled down by -1.81% at 208.85 as Zinc inventories in London Metal Exchange (LME) registered warehouses jumped 40% to 61,025 tonnes, data published by the exchange showed. Rising stocks suggest the material isn't needed and surpluses are being deposited in LME warehouses. Deliveries of 18,050 tonnes of the metal used to galvanise steel were made to LME warehouses in Singapore, taking total zinc stocks in that location to 50,250 tonnes. Overall, LME zinc stocks have climbed more than 300% since early February, easing worries about availability on the LME market and creating a discount for the cash contact over the three-month contract. The discount closed at $7 a tonne compared with a premium of about $30 a tonne at the end of March. 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. According to the General Administration of Customs on May 22, China imported 15,676.61 mt of refined zinc in April, an increase of 22.61% month-on-month and a sharp growth of 920.84% year-on-year. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.75% to settle at 3723 while prices are down -3.85 rupees, now Zinc is getting support at 207.4 and below same could see a test of 206 levels, and resistance is now likely to be seen at 210.9, a move above could see prices testing 213.

Trading Ideas:
* Zinc trading range for the day is 206-213.
* Zinc prices dropped as inventories in LME warehouses jump 40%
* Global zinc market surplus rises to 26,700 tonnes in March – ILZSG
* China refined zinc imports soared 921% in April


Aluminium

Aluminium yesterday settled down by -0.72% at 206.25 amid growing concerns over the performance of major economies and a strong U.S. dollar. Demand outlook has darkened for the metal used widely in construction, power and transportation sectors, as China's economic recovery falters. 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%. It was unclear the source of the current arrivals into Gwangyang. Higher stocks of Russian aluminium, produced by Rusal, on the LME are a concern for producers as they could weigh on benchmark aluminium prices used as references in contracts between buyers and sellers. Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.13% to settle at 2889 while prices are down -1.5 rupees, now Aluminium is getting support at 205.3 and below same could see a test of 204.3 levels, and resistance is now likely to be seen at 207.3, a move above could see prices testing 208.3.

Trading Ideas:
* Aluminium trading range for the day is 204.3-208.3.
* Aluminium dropped amid growing concerns over the performance of major economies
* 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 down by -0.82% at 959.2 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 -1 Rupees to end at 1132.4 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.27% to settle at 585 while prices are down -7.9 rupees, now Mentha oil is getting support at 954.2 and below same could see a test of 949.1 levels, and resistance is now likely to be seen at 967.2, a move above could see prices testing 975.1.

Trading Ideas:
* Mentha oil trading range for the day is 949.1-975.1.
* In Sambhal spot market, Mentha oil dropped  by -1 Rupees to end at 1132.4 Rupees per 360 kgs.
* Menthaoil dropped on better sowing conditions 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 -1.39% at 7922 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 7471.75 Rupees dropped -1.3 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.11% to settle at 12310 while prices are down -112 rupees, now Turmeric is getting support at 7802 and below same could see a test of 7682 levels, and resistance is now likely to be seen at 8066, a move above could see prices testing 8210.

Trading Ideas:
* Turmeric trading range for the day is 7682-8210.
* 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 7471.75 Rupees dropped -1.3 Rupees.

Jeera

Jeera yesterday settled down by -0.61% at 45030 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. 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 up by 431.75 Rupees to end at 46350.1 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.76% to settle at 7023 while prices are down -275 rupees, now Jeera is getting support at 44520 and below same could see a test of 44010 levels, and resistance is now likely to be seen at 45910, a move above could see prices testing 46790.

Trading Ideas:
* Jeera trading range for the day is 44010-46790.
* Jeera prices dropped amid profit booking with increase in seasonal supply
* However, downside seen limited 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 431.75 Rupees to end at 46350.1 Rupees per 100 kg.

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