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Gold

Gold yesterday settled up by 0.23% at 59985 following a modest weakening of the US dollar and a minor decline in US Treasury yields, after weak economic data in the US reinforced the view that the Fed will pause the tightening cycle next week. ISM Services PMI pointed to sluggish growth in the US services sector during May while new orders for manufactured goods increased less than expected and only because of a rise in defense spending. Still, gold prices remain significantly below the near-record-high of $2,050 reached on May 5th, as traders are anticipating that interest rates will need to remain elevated for an extended period in the US, Europe, and the UK due to persistent inflationary pressures. Russia's central bank sold four tonnes of gold from the National Wealth Fund (NWF) accounts to raise additional money to finance the budget deficit, according to the Finance Ministry. The World Bank raised its 2023 global growth forecast as the U.S. and other major economies have proven more resilient than forecast, but said higher interest rates would cause a larger-than-expected drag next year. Real global GDP is set to climb 2.1% this year, the World Bank said in its latest Global Economic Prospects report. Technically market is under short covering as the market has witnessed a drop in open interest by -0.16% to settle at 14603 while prices are up 137 rupees, now Gold is getting support at 59810 and below same could see a test of 59634 levels, and resistance is now likely to be seen at 60118, a move above could see prices testing 60250.

Trading Ideas:
* Gold trading range for the day is 59634-60250.
* Gold steadied following weakening of US dollar and US Treasury yields
* Weak economic data in the US reinforced the view that the Fed will pause the tightening cycle next week.
* ISM Services PMI pointed to sluggish growth in the US services sector during May


Silver
Silver yesterday settled up by 0.12% at 71956 as markets reassessed the outlook for monetary policy by the Federal Reserve. Recent speeches from Fed officials indicated some favor for a skip in the central bank’s tightening for the June meeting, but a stronger-than-expected payroll report drove investors to pile bets of a 25bps hike in July. The World Bank raised its 2023 global growth forecast as the U.S. and other major economies have proven more resilient than forecast, but said higher interest rates would cause a larger-than-expected drag next year. Real global GDP is set to climb 2.1% this year, the World Bank said in its latest Global Economic Prospects report. "Growth over the rest of 2023 is set to slow substantially as it is weighed down by the lagged and ongoing effects of monetary tightening, and more restrictive credit conditions," it said. "These factors are envisaged to continue to affect activity heading into next year, leaving global growth below previous projections." The bank predicted global growth rebounding to 3.0% in 2025. Data showed that the U.S. services sector barely grew in May and new orders for manufactured goods rose by slightly less than expected in April, rekindling concerns about inflation and a potential recession. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.13% to settle at 13618 while prices are up 84 rupees, now Silver is getting support at 71390 and below same could see a test of 70825 levels, and resistance is now likely to be seen at 72510, a move above could see prices testing 73065.

Trading Ideas:
* Silver trading range for the day is 70825-73065.
* Silver steadied as markets reassessed the outlook for monetary policy by Fed.
* Fed officials indicated some favor for a skip in the central bank’s tightening for the June meeting
* The World Bank raised its 2023 global growth forecast as U.S. and other major economies have proven more resilient than forecast.


Crude oil
Crude oil yesterday settled down by -1.08% at 5939 as worries over global economic growth outweighed Saudi Arabia's pledge to deepen output cuts. The mood was further dented by data showing that German industrial orders fell unexpectedly in April. Saudi Arabia pledged to reduce output by another 1 million barrels per day from July at an OPEC+ meeting held over the weekend. That would bring the country’s production level to around 9 million bpd, the lowest in years, with Saudi Energy Minister Prince Abdulaziz bin Salman saying he “will do whatever is necessary to bring stability to this market.” Moreover, Russia made no commitment to reduce output further, while the United Arab Emirates was allowed to raise output targets for next year. The U.S. services sector barely growth in May and new orders for manufactured goods rose by slightly less than expected in April, rekindling concerns about inflation and a potential recession. U.S. crude oil exports, already running close to a record level hit in March, should get a further boost next month from deep production cuts in Saudi Arabia, noting that this will also further deplete U.S. crude inventories, which have been hovering near historic lows. Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.33% to settle at 11218 while prices are down -65 rupees, now Crude oil is getting support at 5840 and below same could see a test of 5742 levels, and resistance is now likely to be seen at 6007, a move above could see prices testing 6076.

Trading Ideas:
* Crude oil trading range for the day is 5742-6076.
* Crude oil dropped as worries over global economic growth weighed
* Saudi Arabia pledged to reduce output by another 1 million barrels per day from July
* Russia made no commitment to reduce output further, while UAE was allowed to raise output targets for next year.


Natural Gas
Nat.Gas yesterday settled down by -0.96% at 186.3 on lower gas flows to liquefied natural gas (LNG) plants due to maintenance, forecasts for milder weather and less demand over the next two weeks than previously expected and a drop in global gas prices. That U.S. price decline came even as low amounts of wind power keeps forcing power generators to burn more gas to produce electricity, a drop in U.S. daily output, rising exports to Mexico and forecasts for hot weather in mid- to late June. Average gas output in the U.S. Lower 48 states eased to 102.3 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May. On a daily basis, however, output was on track to drop about 1.7 bcfd to a preliminary six-week low of 101.3 bcfd on Tuesday. That would be the biggest daily output drop since January, but analysts noted preliminary data is often revised later in the day. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 14 before turning hotter than normal from June 15-21. U.S. exports to Mexico rose to an average of 7.5 bcfd so far in June, up from 5.9 bcfd in May. Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.43% to settle at 42092 while prices are down -1.8 rupees, now Natural gas is getting support at 181.4 and below same could see a test of 176.6 levels, and resistance is now likely to be seen at 190.3, a move above could see prices testing 194.4.

Trading Ideas:
* Natural gas trading range for the day is 176.6-194.4.
* Natural gas fell on lower gas flows to LNG plants, forecasts for less demand.
* However, upside seen limited amid a drop in U.S. daily output, rising exports to Mexico.
* Average gas output in the U.S. Lower 48 states eased to 102.3 billion cubic feet per day (bcfd) so far in June



Copper
Copper yesterday settled up by 0.18% at 722.45 as SHFE copper inventories were at 86,648 tonnes, 66% lower than late February. global manufacturing purchasing managers' index for May continued to fall month-on-month, falling to a new low since June 2020 in May, as the global economy continued to move downward. The manufacturing trends of major countries in Asia and Africa were relatively stable, which were the main force for stabilising the manufacturing industries. LME on-warrant copper inventory dropped 19.9%, the biggest daily slump since October 2022, latest data showed. Chile’s copper output in April decreased by 1.1% year-on-year to 417,279 mt. It was still the lowest in the same period in recent years, and also dropped significantly on the month. In April, the disruptions to mines weakened, but the commissioning of new production capacity was also very limited. Codelco, the world's largest copper producer, closed its Ventanas copper smelter on Chile's central coast in a bid to reduce pollution and move towards more sustainable mining. The copper smelting capacity of the Ventanas smelter is 150,000 mt/year with metal content. Peru's copper production soared by 30.5% in April versus the same month a year earlier, due to the good performance of mines including Las Bambas and Cerro Verde, the Ministry of Energy and Mines said in a statement. Technically market is under short covering as the market has witnessed a drop in open interest by -1.8% to settle at 6054 while prices are up 1.3 rupees, now Copper is getting support at 717.6 and below same could see a test of 712.7 levels, and resistance is now likely to be seen at 726.4, a move above could see prices testing 730.3.

Trading Ideas:
* Copper trading range for the day is 712.7-730.3.
* Copper gains as SHFE inventories were 66% lower than late February.
* LME on-warrant copper inventory dropped 19.9%, the biggest daily slump since October 2022
* Global manufacturing PMI for May continued to fall MoM


Zinc
Zinc yesterday settled up by 1.27% at 210.75 on hopes of stimulus measures from top metals consumer China. China will likely further cut banks' reserve ratio and interest rates in the second half of this year to support the economy. Investors also hoped that Beijing would roll out supportive measures soon to bolster the embattled property sector, which consumes a vast amount of metals. Some smelters in Henan reduced production due to high sulphuric acid inventories. 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 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. The discount closed at $14.73 a tonne on Tuesday compared with a premium of about $35 a tonne in late March. Technically market is under short covering as the market has witnessed a drop in open interest by -2.36% to settle at 3678 while prices are up 2.65 rupees, now Zinc is getting support at 209.1 and below same could see a test of 207.2 levels, and resistance is now likely to be seen at 212, a move above could see prices testing 213.

Trading Ideas:
* Zinc trading range for the day is 207.2-213.
* Zinc gains on hopes of stimulus measures from top metals consumer China.
* China will likely further cut banks' reserve ratio and interest rates in the second half of this year to support the economy.
* Some smelters in Henan reduced production due to high sulphuric acid inventories.



Aluminium
Aluminium yesterday settled down by -1.04% at 204.1 as China’s operating aluminium capacity rose to 40.92 million mt at the end of May, and the domestic aluminium output rose 1% year-on-year to around 3.47 million mt in May, mainly driven by production resumption in Guizhou and Sichuan. Smelters maintained high proportion of molten aluminium output last month. The Caixin China General Composite PMI rose to 55.6 in May 2023 from 53.6 in the prior month. This was the fifth straight month of growth in private sector activity and the steepest pace since December 2020, supported by a faster rise in output across both the manufacturing and service sectors, with the latter seeing a quicker rate of rise. The Caixin China General Services PMI increased to 57.1 in May 2023 from 56.4 in the previous month. Still, it was the fifth straight month of expansion in services activity and the second-fastest since November 2020 as the post-COVID recovery continued. New orders grew faster and sustained a rise in new export business amid reports of stronger market conditions and increased customer turnout while employment climbed modestly with backlogs rising further. Technically market is under fresh selling as the market has witnessed a gain in open interest by 17.12% to settle at 3387 while prices are down -2.15 rupees, now Aluminium is getting support at 203.4 and below same could see a test of 202.5 levels, and resistance is now likely to be seen at 205.8, a move above could see prices testing 207.3.

Trading Ideas:
* Aluminium trading range for the day is 202.5-207.3.
* Aluminium dropped driven by production resumption in Guizhou and Sichuan
* China’s operating aluminium capacity rose to 40.92 million mt at the end of May
* China’s aluminium output rose 1% year-on-year to around 3.47 million mt in May


Mentha oil
Mentha oil yesterday settled down by -1.14% at 926.8 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 -8.6 Rupees to end at 1070.6 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.75% to settle at 697 while prices are down -10.7 rupees, now Mentha oil is getting support at 920.9 and below same could see a test of 915.1 levels, and resistance is now likely to be seen at 935.6, a move above could see prices testing 944.5.
 

Trading Ideas:
* Mentha oil trading range for the day is 915.1-944.5.
* In Sambhal spot market, Mentha oil dropped  by -8.6 Rupees to end at 1070.6 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 -0.89% at 7796 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 7357.05 Rupees gained 14.2 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 19.24% to settle at while prices are down -70 rupees, now Turmeric is getting support at 7742 and below same could see a test of 7690 levels, and resistance is now likely to be seen at 7856, a move above could see prices testing 7918.

Trading Ideas:
* Turmeric trading range for the day is 7690-7918.
* 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 7357.05 Rupees gained 14.2 Rupees.


Jeera
Jeera yesterday settled up by 1.47% at 46400 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 down by -96.95 Rupees to end at 46344.5 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 12.71% to settle at while prices are up 670 rupees, now Jeera is getting support at 45685 and below same could see a test of 44965 levels, and resistance is now likely to be seen at 46940, a move above could see prices testing 47475.

Trading Ideas:
* Jeera trading range for the day is 44965-47475.
* 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 down by -96.95 Rupees to end at 46344.5 Rupees per 100 kg.

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