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Gold

Gold yesterday settled up by 0.65% at 59891 after higher-than-anticipated weekly claims reduced expectations of an imminent interest rate hike by the Federal Reserve. Momentum in the U.S. labor market continues to slow, with the number of American workers applying for first-time unemployment benefits pushing back to its highest level since Oct. 2021. The U.S. Labor Department said that weekly jobless claims rose by 28,000 to 242,000, up from the previous week's revised estimate of 233,000 claims. The latest labor market data significantly missed expectations. 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. This is the third consecutive month that investment demand for gold has increased. 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. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.03% to settle at 14377 while prices are up 388 rupees, now Gold is getting support at 59528 and below same could see a test of 59165 levels, and resistance is now likely to be seen at 60151, a move above could see prices testing 60411.

Trading Ideas:
* Gold trading range for the day is 59165-60411.
* Gold gains after higher-than-anticipated weekly claims
* Momentum in the U.S. labor market continues to slow
* Gold ETF demand turns positive in May as investors look for safe-haven assets


Silver

Silver yesterday settled up by 2.71% at 73670 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 fresh buying as the market has witnessed a gain in open interest by 27.8% to settle at 17260 while prices are up 1945 rupees, now Silver is getting support at 72350 and below same could see a test of 71029 levels, and resistance is now likely to be seen at 74432, a move above could see prices testing 75193.

Trading Ideas:
* Silver trading range for the day is 71029-75193.
* Silver rose benefitting from a slightly weaker dollar
* 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 -1.68% at 5903 as U.S. crude oil field production rose last week to its highest since April 2020, Energy Information Administration data showed. recent concerns about China's slowing economy and potential recessions in the US and Europe have put pressure on oil markets. Meanwhile, U.S. refiner utilization rose to 95.8%, highest since August 2019, EIA said. Refinery crude runs rose by 482,000 barrels per day (bpd), while refinery utilization rates increased by 2.7 percentage points in the week. Gasoline stocks rose by 2.7 million barrels in the week, the EIA said, compared with expectations for an 880,000-barrel rise. Distillate stockpiles, which include diesel and heating oil, rose by nearly 5.1 million barrels in the week, versus expectations for a 1.3 million barrel rise, the EIA said. 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. Technically market is under fresh selling as the market has witnessed a gain in open interest by 54.98% to settle at 15239 while prices are down -101 rupees, now Crude oil is getting support at 5727 and below same could see a test of 5551 levels, and resistance is now likely to be seen at 6066, a move above could see prices testing 6229.

Trading Ideas:
* Crude oil trading range for the day is 5551-6229.
* Crude oil dropped as US crude output rises to highest since April 2020
* US crude inventories draw down unexpectedly, fuel stocks rise – EIA
* Gasoline stocks rose by 2.7 million barrels in the week, the EIA said


Natural gas

Nat.Gas yesterday settled up by 0.57% at 192.9 as mild weather kept demand for the fuel low. 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. The latest projections for 2023 were higher than the EIA's May forecast of 101.09 bcfd for supply and 87.54 bcfd for demand. The agency forecast average U.S. liquefied natural gas (LNG) exports would reach 12.07 bcfd in 2023 and 12.73 bcfd in 2024, up from a record 10.59 bcfd in 2022. US utilities added 118 billion cubic feet of gas into storage during the week ended June 2, 2023, slightly more than market expectations of a 113 bcf increase as mild weather limited demand for the fuel for both heating and cooling. Technically market is under short covering as the market has witnessed a drop in open interest by -3.2% to settle at 35692 while prices are up 1.1 rupees, now Natural gas is getting support at 188.9 and below same could see a test of 184.8 levels, and resistance is now likely to be seen at 196.9, a move above could see prices testing 200.8.

Trading Ideas:
* Natural gas trading range for the day is 184.8-200.8.
* Natural gas dropped as mild weather kept demand for the fuel low.
* US natural gas stocks rise more than expected: EIA
* U.S. natural gas production and demand will rise to record highs in 2023.


Copper

Copper yesterday settled up by 0.55% at 725 on hopes of China’s stimulus measures for the troubled property sector have been supporting metals prices in recent sessions, although the wait for official announcements have deflated the hype in metals prices. 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. Technically market is under short covering as the market has witnessed a drop in open interest by -4.24% to settle at 5872 while prices are up 3.95 rupees, now Copper is getting support at 719.8 and below same could see a test of 714.6 levels, and resistance is now likely to be seen at 728.1, a move above could see prices testing 731.2.

Trading Ideas:
* Copper trading range for the day is 714.6-731.2.
* Copper gains on hopes of China’s stimulus measures
* 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 0.61% at 215.7 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 -4.67% to settle at 3304 while prices are up 1.3 rupees, now Zinc is getting support at 213.6 and below same could see a test of 211.5 levels, and resistance is now likely to be seen at 217.1, a move above could see prices testing 218.5.

Trading Ideas:
* Zinc trading range for the day is 211.5-218.5.
* 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 0.73% at 205.65 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 short covering as the market has witnessed a drop in open interest by -6.36% to settle at 3212 while prices are up 1.5 rupees, now Aluminium is getting support at 204.2 and below same could see a test of 202.6 levels, and resistance is now likely to be seen at 207.2, a move above could see prices testing 208.6.

Trading Ideas:
* Aluminium trading range for the day is 202.6-208.6.
* 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 up by 1.24% at 913.2 on low level recovery after 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. 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 gained by 10.1 Rupees to end at 1067.4 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -2.43% to settle at 684 while prices are up 11.2 rupees, now Mentha oil is getting support at 905.4 and below same could see a test of 897.6 levels, and resistance is now likely to be seen at 919.6, a move above could see prices testing 926.

Trading Ideas:
* Mentha oil trading range for the day is 897.6-926.
* In Sambhal spot market, Mentha oil gained  by 10.1 Rupees to end at 1067.4 Rupees per 360 kgs.
* Mentha oil gains on low level recovery after 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 -0.55% at 7978 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 7420 Rupees gained 34.9 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 8.12% to settle at while prices are down -44 rupees, now Turmeric is getting support at 7882 and below same could see a test of 7788 levels, and resistance is now likely to be seen at 8104, a move above could see prices testing 8232.

Trading Ideas:
* Turmeric trading range for the day is 7788-8232.
* 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 7420 Rupees gained 34.9 Rupees.

Jeera

Jeera yesterday settled up by 1.26% at 47980 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 buying as the market has witnessed a gain in open interest by 9.25% to settle at while prices are up 595 rupees, now Jeera is getting support at 47090 and below same could see a test of 46200 levels, and resistance is now likely to be seen at 48605, a move above could see prices testing 49230.

Trading Ideas:
* Jeera trading range for the day is 46200-49230.
* 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 369.4 Rupees to end at 47386.7 Rupees per 100 kg

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