IGI Logo

Gold

Gold yesterday settled down by -0.12% at 59821 amid mixed expectations regarding the Fed's monetary policy decision. Data showed the number of Americans filing for unemployment benefits jumping to 261 thousand in the week ended June 3 versus the previous reading of 233 thousand and expectations of 235 thousand. Physical gold demand slowed in China and India and forced dealers to offer discounts, with volatile prices in India prompting buyers to delay purchases. Indian dealers offered discounts of about $5 an ounce over official domestic prices compared with $4 premiums last week. Top consumer China raised gold holdings for a seventh straight month to 67.27 million fine troy ounces by May-end. In China, gold changed hands between discounts of $3 and $3 premium to global prices. In Hong Kong, gold was sold on par with global prices to $2.50 premiums. Singapore dealers charged $1.50-$2.50 premiums. Investor sentiment continued to improve in the gold market even as prices fell below $2,000 an ounce last month, according to the latest research from the World Gold Council. In a report, the WGC said that 19 tonnes of gold, valued at $1.7 billion, flowed into global gold-backed exchange-traded products in May. Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.45% to settle at 14169 while prices are down -70 rupees, now Gold is getting support at 59660 and below same could see a test of 59499 levels, and resistance is now likely to be seen at 60049, a move above could see prices testing 60277.

Trading Ideas:
* Gold trading range for the day is 59499-60277.
* Gold steadied amid mixed expectations regarding Fed's monetary policy decision.
* The number of Americans filing for unemployment benefits jumping to 261 thousand
* Physical gold demand slowed in China and India and forced dealers to offer discounts


Silver
Silver yesterday settled up by 0.17% at 73796 benefitting from a slightly weaker dollar, after a higher-than-expected initial jobless claims reading raised concerns over the health of the US economy. The number of Americans filing new claims for unemployment benefits surged last week, suggesting that the labor market was slowing amid mounting risks of a recession. Initial claims for state unemployment benefits jumped 28,000 to a seasonally adjusted 261,000 for the week ended June 3, the Labor Department said. Despite the surge in applications, claims remain at levels consistent with a tight labor market. The government reported last week that the economy added 339,000 jobs in May. Although the unemployment rate increased to a seven-month high of 3.7% from 3.4% in April, it remains low by historical standards. Job growth is being driven by the services sector, including the leisure and hospitality category, which is still catching up after businesses struggled to find workers over the last two years. Industries like healthcare and education also experienced accelerated retirements during the COVID-19 pandemic. The CME FedWatch tool currently shows a 70.2 percent probability for a pause and a 29.8 percent probability for a rate hike of 25 basis points in the review due on June 14. Technically market is under short covering as the market has witnessed a drop in open interest by -1.45% to settle at 17009 while prices are up 126 rupees, now Silver is getting support at 73442 and below same could see a test of 73089 levels, and resistance is now likely to be seen at 74236, a move above could see prices testing 74677.

Trading Ideas:
* Silver trading range for the day is 73089-74677.
* Silver rose supported by threats to supply and ahead of Fed meet
* The number of Americans filing new claims for unemployment benefits surged last week
* Wholesale inventories in the US decreased 0.1% month-over-month in April 2023


Crude oil
Crude oil yesterday settled down by -1.34% at 5824 as investors remained concerned about demand. The prospect of further interest rate hikes from major central banks and economic uncertainties in top crude importer China could negatively impact overall demand. The US oil benchmark tumbled as much as 4.8% on Thursday following news that the US and Iran reached a temporary nuclear agreement that would allow Iran to resume oil exports of around 1 million barrels per day. However, both countries denied the report, causing oil prices to recoup most of Thursday's losses. Meanwhile, Saudi Arabia announced over the weekend its intention to reduce output by 1 million barrels per day to 9 million bpd in July, the lowest level in years amid an effort to support crude prices. China's factory gate prices fell at the fastest pace in seven years in May and quicker than forecasts, as faltering demand weighed on a slowing manufacturing sector and cast a cloud over the fragile economic recovery. Saudi Arabia kept under wraps its plan to make a deep cut to its own oil output during a weekend of OPEC+ talks in Vienna, several OPEC+ sources told, with some member states only learning about the reduction from the final news conference. Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.12% to settle at 15562 while prices are down -79 rupees, now Crude oil is getting support at 5780 and below same could see a test of 5736 levels, and resistance is now likely to be seen at 5897, a move above could see prices testing 5970.

Trading Ideas:
* Crude oil trading range for the day is 5736-5970.
* Crudeoil dropped as investors remained concerned about demand.
* Second Saudi surprise for oil market since April
* OPEC+ members had little appetite for joint cut


Natural Gas
Nat.Gas yesterday settled down by -2.95% at 187.2 after mild weather last week kept demand for the fuel low and allowed utilities to inject more gas into storage. The latest EIA report showed US utilities added 118 billion cubic feet of gas into storage, slightly more than market expectations of a 113 bcf increase. Despite this setback, natural gas prices in the US are on course for an over 5% weekly gain, recovering from two consecutive periods of losses, in anticipation of increased demand from air conditioning usage amid forecasts for warmer weather. The number of cooling degree days (CDDs) in the coming two weeks is expected to rise to 167, above the 30-year normal of 149, according to Refinitiv. U.S. natural gas production and demand will rise to record highs in 2023, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO). The EIA projected dry gas production will rise to 102.74 billion cubic feet per day (bcfd) in 2023 and 103.04 bcfd in 2024 from a record 98.13 bcfd in 2022. The agency also projected domestic gas consumption would rise from a record 88.53 bcfd in 2022 to 88.64 bcfd in 2023 before sliding to 86.59 bcfd in 2024. Technically market is under fresh selling as the market has witnessed a gain in open interest by 18.23% to settle at 42200 while prices are down -5.7 rupees, now Natural gas is getting support at 184.6 and below same could see a test of 182.1 levels, and resistance is now likely to be seen at 191.5, a move above could see prices testing 195.9.

Trading Ideas:
* Natural gas trading range for the day is 182.1-195.9.
* Natural gas fell as mild weather kept demand for the fuel low
* EIA report showed US utilities added 118 billion cubic feet of gas into storage
* U.S. natural gas production and demand will rise to record highs in 2023.


Copper

Copper yesterday settled down by -0.15% at 723.9 as investors continue to assess the global economic outlook while awaiting key monetary policy decisions from the Fed and the ECB next week. In the United States, a surge in weekly jobless claims raised hopes that a peak in the Federal Reserve rates was near. Copper stocks on the Shanghai Futures Exchange declined 11.7% this week to a six-month low of 76,473 metric tons. China's economic growth is expected to be "relatively high" in the second quarter compared to the prior year, mainly due a low base of comparison, while consumer inflation is projected to be above 1% by December, the central bank governor said. As rising interests rates and inflation squeeze demand in the United States and Europe, China's core CPI has been soft and factory gate prices fell sharply in May, suggesting the world's second-largest economy is losing steam. At present, China's economy is recovering from the impact of COVID-19, and the balance sheets of its companies are being repaired, the People's Bank of China (PBOC) said. China's economy is facing challenges including rapidly worsening exports, a high youth jobless rate, property distress and weak domestic demand, but Yi said China is confident and capable of meeting the growth goals set earlier this year. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.38% to settle at 5732 while prices are down -1.1 rupees, now Copper is getting support at 720.6 and below same could see a test of 717.4 levels, and resistance is now likely to be seen at 728.9, a move above could see prices testing 734.

Trading Ideas:
* Copper trading range for the day is 717.4-734.
* Copper dropped as investors continue to assess the global economic outlook
* Copper stocks on the SHFE declined 11.7% to a six-month low of 76,473 metric tons
* LME's on-warrant copper stocks resumed decline after Thursday's growth.
 

Zinc

Zinc yesterday settled down by -0.67% at 214.25 as Chinese refined zinc output stood at 564,500 mt in May, an increase of 24,500 mt or 4.54% MoM and 9.56% YoY, slightly exceeding expectations. 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 long liquidation as the market has witnessed a drop in open interest by -6.63% to settle at 3085 while prices are down -1.45 rupees, now Zinc is getting support at 213.1 and below same could see a test of 211.9 levels, and resistance is now likely to be seen at 216.4, a move above could see prices testing 218.5.

Trading Ideas:
* Zinc trading range for the day is 211.9-218.5.
* Zinc dropped as Chinese refined zinc output rose 4.54% MoM and 9.56% YoY
* 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 remain unchangeby 0% at 205.65 as the market kept a close eye on rain forecast in China's main aluminium producing region Yunnan, where reduced hydropower generation kept part of the metal production capacity offline for months. Hydropower generation in Yunnan has improved, and a small amount of aluminium capacity there could resume in late June. Investor sentiment was aided by China's financial boost and its decision to launch a nationwide campaign to promote automobile purchases and shore up demand in the world's largest auto market. China's economic growth is expected to be "relatively high" in the second quarter compared to the prior year, mainly due a low base of comparison, while consumer inflation is projected to be above 1% by December, the central bank governor said. As rising interests rates and inflation squeeze demand in the United States and Europe, China's core CPI has been soft and factory gate prices fell sharply in May, suggesting the world's second-largest economy is losing steam. At present, China's economy is recovering from the impact of COVID-19, and the balance sheets of its companies are being repaired, the People's Bank of China (PBOC) said in a statement, citing Governor Yi Gang. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.79% to settle at 3026 while prices are remain unchanged 0 rupees, now Aluminium is getting support at 205.2 and below same could see a test of 204.6 levels, and resistance is now likely to be seen at 206.4, a move above could see prices testing 207.

Trading Ideas:
* Aluminium trading range for the day is 204.6-207.
* Aluminium settled flat as Yunnan aluminum production is now threatened.
* Investor sentiment was aided by China's financial boost
* China's central bank upbeat on Q2 GDP growth, confident on 2023 targets

Mentha oil

Mentha oil yesterday settled down by -0.87% at 905.3 on better sowing prospects. Reports of increased acreages and sluggish export of menthol will weigh on prices. 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 -13.3 Rupees to end at 1057.3 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.07% to settle at 663 while prices are down -7.9 rupees, now Mentha oil is getting support at 900.4 and below same could see a test of 895.4 levels, and resistance is now likely to be seen at 910.2, a move above could see prices testing 915.

Trading Ideas:
* Mentha oil trading range for the day is 895.4-915.
* In Sambhal spot market, Mentha oil dropped  by -13.3 Rupees to end at 1057.3 Rupees per 360 kgs.
* Mentha oil prices dropped on better sowing prospects
* Reports of increased acreages and sluggish export of menthol will weigh on prices.
* Rising menthol imports, as well as China's limited purchasing, will put pressure on pricing.

Turmeric

Turmeric yesterday settled down by -0.28% at 7956 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. 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 7385.1 Rupees dropped -7.8 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 14.65% to settle at while prices are down -22 rupees, now Turmeric is getting support at 7872 and below same could see a test of 7790 levels, and resistance is now likely to be seen at 8058, a move above could see prices testing 8162.

Trading Ideas:
* Turmeric trading range for the day is 7790-8162.
* Turmeric dropped on profit booking in expectation of rise in domestic supplies.
* India Meteorological Department projected onset of monsoon is likely to be delayed
* 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 7385.1 Rupees dropped -7.8 Rupees.

Jeera

Jeera yesterday settled down by -1.74% at 47145 on profit booking after prices gained 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. Below normal supplies in the market supported firmness in prices. About 508 tonnes of jeera arrived on 6th June at major APMC mandis across India as compared to 653 tonnes of prior day. Tighter carryover stocks and lower production will push up the prices further. 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 369.4 Rupees to end at 47386.7 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.96% to settle at while prices are down -835 rupees, now Jeera is getting support at 46420 and below same could see a test of 45695 levels, and resistance is now likely to be seen at 48335, a move above could see prices testing 49525.

Trading Ideas:
* Jeera trading range for the day is 45695-49525.
* Jeera dropped on profit booking after prices gained due to good export demand
* 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
* In Unjha, a key spot market in Gujarat, jeera edged up by 369.4 Rupees to end at 47386.7 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