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Gold

Gold yesterday settled down by -0.8% at 59503 as investors looked ahead to key central bank meetings in the U.S., Europe and Japan next week. Traders remained reluctant to make significant moves ahead of next week's Federal Reserve meeting. As the inflation situation improves, the Fed is widely expected to pause its recent series of interest rate hikes. China increased its gold reserves for a seventh straight month, signaling ongoing strong demand for the precious metal from the world’s central banks. China raised its gold holdings by about 16 tons in May, according to data from the People’s Bank of China. Total stockpiles now sit at about 2,092 tons, after adding a total of 144 tons from November through last month. Demand for gold will drop 9% to 4,375 metric tons this year with central banks' appetite falling from last year's all-time high, adding that gold prices would be under pressure in the second half of 2023. The net official sector purchases jumped 141% to a record high of 1,083 metric tons in 2022 amid de-dollarisation activity, inflated by western sanctions on Russia after its invasion of Ukraine. Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.58% to settle at 14372 while prices are down -482 rupees, now Gold is getting support at 59236 and below same could see a test of 58970 levels, and resistance is now likely to be seen at 59933, a move above could see prices testing 60364.
 

Trading Ideas:
* Gold trading range for the day is 58970-60364.
* Gold dropped as investors looked ahead to key central bank meetings
* Traders remained reluctant to make significant moves ahead of next week's Federal Reserve meeting.
* China increased its gold reserves for a seventh straight month


Silver

Silver yesterday settled down by -0.32% at 71725 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 long liquidation as the market has witnessed a drop in open interest by -0.82% to settle at 13506 while prices are down -231 rupees, now Silver is getting support at 71129 and below same could see a test of 70532 levels, and resistance is now likely to be seen at 72724, a move above could see prices testing 73722.
 

Trading Ideas:
* Silver trading range for the day is 70532-73722.
* Silver dropped 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 up by 1.09% at 6004 amid fears of tighter global supply following Saudi Arabia's pledge to deepen output cuts. The Organisation for Economic Cooperation and Development (OECD) said that the world economy is set to grow 2.7% this year, up from its previous forecast of 2.6% in March. U.S crude oil production this year will rise faster and demand increases will cool compared to prior expectations, the U.S. Energy Information Administration (EIA) said. EIA issued the new outlook after the Organization of the Petroleum Exporting Countries (OPEC) and allies extended output cuts through 2024. Saudi Arabia will pare 1 million barrels per day (bpd) from its July output to stabilize oil markets, it said. The production cuts by the group known as OPEC+ will slightly reduce global oil inventories in each of the next five quarters and boost global oil prices in late-2023 and early-2024, the agency predicted in its Short-Term Energy Outlook. 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 short covering as the market has witnessed a drop in open interest by -12.35% to settle at 9833 while prices are up 65 rupees, now Crude oil is getting support at 5902 and below same could see a test of 5799 levels, and resistance is now likely to be seen at 6077, a move above could see prices testing 6149.
 

Trading Ideas:
* Crude oil trading range for the day is 5799-6149.
* Crude oil gains amid fears of tighter global supply following Saudi Arabia's pledge to deepen output cuts.
* IEA Executive Director Birol: OPEC+ output cut might put upward pressure on oil price.
* IEA Executive Director Birol: IEA sees tight second half of the year in the oil market.


Nat.Gas

Nat.Gas yesterday settled up by 2.95% at 191.8 as low amounts of wind power keeps forcing generators to burn more gas to produce electricity, a drop in U.S. daily output, rising exports to Mexico and forecasts for hotter than normal weather in mid- to late June. The price increase came despite 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. 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 short covering as the market has witnessed a drop in open interest by -12.4% to settle at 36872 while prices are up 5.5 rupees, now Natural gas is getting support at 187.6 and below same could see a test of 183.3 levels, and resistance is now likely to be seen at 195.1, a move above could see prices testing 198.3.
 

Trading Ideas:
* Natural gas trading range for the day is 183.3-198.3.
* Natural gas gains amid a drop in U.S. daily output, rising exports to Mexico
* However, downside seen limited on lower gas flows to LNG plants, forecasts for less demand.
* U.S. natgas output and demand to hit record highs in 2023



Copper

Copper yesterday settled down by -0.19% at 721.05 on profit booking after prices gained 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 fresh selling as the market has witnessed a gain in open interest by 1.29% to settle at 6132 while prices are down -1.4 rupees, now Copper is getting support at 717.3 and below same could see a test of 713.5 levels, and resistance is now likely to be seen at 726.6, a move above could see prices testing 732.1.
 

Trading Ideas:
* Copper trading range for the day is 713.5-732.1.
* Copper dropped on profit booking after prices gained as SHFE inventories fell
* 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 1.73% at 214.4 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 -5.76% to settle at 3466 while prices are up 3.65 rupees, now Zinc is getting support at 211.4 and below same could see a test of 208.3 levels, and resistance is now likely to be seen at 216.5, a move above could see prices testing 218.5.
 

Trading Ideas:
* Zinc trading range for the day is 208.3-218.5.
* 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 up by 0.02% at 204.15 supported by hopes of stimulus from China to revive its embattled property sector and bolster economic growth. Investors also bet China to further cut banks' reserve ratio and interest rates in the second half of this year to support the economy, following a report by state-owned media. 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. Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.27% to settle at 3430 while prices are up 0.05 rupees, now Aluminium is getting support at 203.6 and below same could see a test of 203.1 levels, and resistance is now likely to be seen at 204.8, a move above could see prices testing 205.5.
 

Trading Ideas:
* Aluminium trading range for the day is 203.1-205.5.
* Aluminum gains supported by hopes of stimulus from China.
* 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 -2.68% at 902 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 fresh selling as the market has witnessed a gain in open interest by 0.57% to settle at 701 while prices are down -24.8 rupees, now Mentha oil is getting support at 891.4 and below same could see a test of 880.8 levels, and resistance is now likely to be seen at 917.2, a move above could see prices testing 932.4.
 

Trading Ideas:
* Mentha oil trading range for the day is 880.8-932.4.
* In Sambhal spot market, Mentha oil dropped  by -13.3 Rupees to end at 1057.3 Rupees per 360 kgs.
* Mentha oil settled down 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 up by 2.9% at 8022 due to weaker production prospects supported by delayed monsoon forecast. However, 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. 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 7385.1 Rupees gained 28.05 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 25.02% to settle at while prices are up 226 rupees, now Turmeric is getting support at 7818 and below same could see a test of 7614 levels, and resistance is now likely to be seen at 8150, a move above could see prices testing 8278.
 

Trading Ideas:
* Turmeric trading range for the day is 7614-8278.
* Turmeric gained due to weaker production prospects supported by delayed monsoon forecast.
* 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 gained 28.05 Rupees.


Jeera

Jeera yesterday settled up by 2.12% at 47385 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 672.8 Rupees to end at 47017.3 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 17.76% to settle at while prices are up 985 rupees, now Jeera is getting support at 46585 and below same could see a test of 45785 levels, and resistance is now likely to be seen at 47860, a move above could see prices testing 48335.
 

Trading Ideas:
* Jeera trading range for the day is 45785-48335.
* 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 672.8 Rupees to end at 47017.3 Rupees per 100 kg.

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