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Gold

Gold yesterday settled down by -0.01% at 60887 as the dollar stood tall amid an uncertain outlook for rates and economic growth. A batch of new economic data underscored current trends of lower inflation and a slower labor market in the United States, strengthening expectations that the Federal Reserve will pause its tightening cycle in its next meeting. Physical gold demand in India improved slightly as domestic prices eased from recent record highs, while demand was weak in other Asian centres with some dealers offering discounts in top bullion consumer China to attract buyers. Indian dealers were offering a discount of up to $11 an ounce over official domestic prices down from last week's discount of $23. Indian gold demand in the March-quarter fell 17% to the lowest level in 10 quarters and is likely to remain subdued even during June and September quarters on record-high prices, the World Gold Council said. Investment demand in the gold market continued to improve in April; however, the sector still has a hill to climb to undo the significant selling pressure seen last year and in the early months of 2023. The WGC said that global gold-backed exchange-traded products saw inflows of 15 tonnes in April, valued at $824 million. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.33% to settle at 12830 while prices are down -5 rupees, now Gold is getting support at 60582 and below same could see a test of 60276 levels, and resistance is now likely to be seen at 61137, a move above could see prices testing 61386.

Trading Ideas:

* Gold trading range for the day is 60276-61386.
* Gold seen pressured amid uncertain outlook for rates and economic growth.
* Gold ETF investment demand improved in April, but the market remains negative year-to-date
* Physical gold demand in India improved slightly as domestic prices eased from recent record highs

Silver

Silver yesterday settled down by -1.02% at 73054 amid a rebound for the US dollar and concerns of lower industrial demand. Indices tracking the performance of solar panel companies sank to seven-month lows amid a batch of weak corporate earnings, limiting demand for the technology’s key input metal. Still, dovish expectations for the Federal Reserve’s policy outlook pressured the dollar and supported bullion prices. Consumer inflation was lower than expected in April amid a considerable deceleration for the core services subsector, strengthening bets that the US central bank will pause its tightening cycle in its next meeting. Data showed U.S. consumer inflation fell below 5 percent for the first time in two years. So-called core inflation also eased, giving the Federal Reserve room to pause interest-rate increases soon. Elsewhere, a measure of China's consumer price inflation reached its lowest level in more than two years in April and factory gate deflation deepened, raising fresh worries about weak demand in the country. Data showed China's consumer price inflation rose an annual 0.1 percent in April, marking the lowest rate since February 2021. Producer prices declined 3.6 percent from a year earlier, marking the fastest rate since May 2020. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.26% to settle at 15489 while prices are down -754 rupees, now Silver is getting support at 72453 and below same could see a test of 71851 levels, and resistance is now likely to be seen at 73710, a move above could see prices testing 74365.

Trading Ideas:

* Silver trading range for the day is 71851-74365.
* Silver fell amid concerns of lower industrial demand.
* The dollar stood tall amid an uncertain outlook for rates and economic growth.
* Fed’s Bowman said that policy rate will need to remain sufficiently restrictive for some time to bring inflation down.


Crude oil

Crude oil yesterday settled down by -1.2% at 5773 as fears of a US economic slowdown and a slower-than-expected recovery in China weighed on the demand outlook. However, speculation that the U.S. could repurchase oil for the Strategic Petroleum Reserve (SPR) if WTI falls to around $70 a barrel will support prices. OPEC further raised its forecast for Chinese oil demand growth in 2023 following the relaxation of the country's COVID-19 curbs, although it left the global total steady citing potential downside risks for growth in other regions. World oil demand in 2023 will rise by 2.33 million barrels per day (bpd), or 2.3%, the Organization of the Petroleum Exporting Countries said in a monthly report. This was virtually unchanged from 2.32 million bpd forecast last month. U.S. crude oil stockpiles rose unexpectedly last week due to another release from national reserves and a drop in exports, while gasoline inventories fell more than forecast as demand jumped. Crude inventories rose by 3 million barrels in the week to May 5 to 462.6 million barrels. The Strategic Petroleum Reserve drew down for a sixth straight week, falling 2.9 million barrels last week to 362 million barrels, their lowest since October 1983. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.48% to settle at 15906 while prices are down -70 rupees, now Crude oil is getting support at 5722 and below same could see a test of 5671 levels, and resistance is now likely to be seen at 5865, a move above could see prices testing 5957.

Trading Ideas:

* Crude oil trading range for the day is 5671-5957.
* Crude oil dropped amid fears of a US economic slowdown
* U.S. could repurchase oil for the SPR if WTI falls to around $70 a barrel will support prices.
* OPEC raises Chinese oil demand growth forecast further

Natural Gas

Nat.Gas yesterday settled up by 5.4% at 189.3 due to a decrease in output and projections of higher demand over the next two weeks. Preliminary data showed gas output fell to a three-week low of 100.8 billion cubic feet per day. At the same time, gas demand is expected to increase from 91.3 bcfd this week to 91.6 bcfd next week as warmer weather is making more people turn on their air conditioners. On the other hand, gas flows to US LNG export plants decreased so far in May, primarily due to reductions at some terminals in Louisiana and Texas. Meanwhile, the latest EIA report showed a slightly larger-than-expected storage build last week, which was still smaller than usual for this time of year because cold weather kept heating demand for the fuel high. Meteorologists projected the weather in the U.S. Lower 48 states would switch from warmer-than-normal levels from May 12-17 to near-normal from May 18-27. Refinitiv forecast U.S. gas demand, including exports, would rise from 91.2 bcfd this week to 91.9 bcfd next week as some homes and businesses turn on their air conditioners before sliding to 90.1 bcfd in two weeks when the weather turns milder. Technically market is under short covering as the market has witnessed a drop in open interest by -20.9% to settle at 32273 while prices are up 9.7 rupees, now Natural gas is getting support at 181.1 and below same could see a test of 172.9 levels, and resistance is now likely to be seen at 193.9, a move above could see prices testing 198.5.

Trading Ideas:

* Natural gas trading range for the day is 172.9-198.5.
* Natural gas rose due to a decrease in output and projections of higher demand.
* Preliminary data showed gas output fell to a three-week low of 100.8 billion cubic feet per day.
* Gas demand is expected to increase from 91.3 bcfd this week to 91.6 bcfd next week


Copper

Copper yesterday settled down by -0.03% at 729 as market's worries about overseas economic recession, the possible US debt default and the overall poor domestic economic data weighed. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 12.3 % from last Friday. Consumption for industrial metals in China has remained subdued in the second quarter which traditionally a peak demand season due to a slow economic recovery and sluggish export market. China's inflation data added to concerns over the strength of the country's economic recovery. Data showed that China’s copper cathode output stood at 970,000 mt in April 2023, up 18,600 mt or 2% from the previous month and 17.2% from the same period in 2022. The actual output was 16,100 mt higher than the expected 953,900 mt. The output totalled 3.68 million mt in January-April, an increase of 352,900 mt or 10.6% year on year. According to statistics, six smelters carried out maintenance in April, which led to an output cut of 29,500 mt. However, the output in April still increased 35,400 month-on-month due to the shorter statistical cycle of some large smelters in March. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.21% to settle at 5396 while prices are down -0.2 rupees, now Copper is getting support at 724.9 and below same could see a test of 720.9 levels, and resistance is now likely to be seen at 733.4, a move above could see prices testing 737.9.

Trading Ideas:

* Copper trading range for the day is 720.9-737.9.
* Copper dropped as signs of increasingly low demand outweighed tight supply.
* Copper inventories in LME warehouses climbed to a near two-month high.
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 12.3 % from last Friday.

Zinc

Zinc yesterday settled down by -0.35% at 229.8 dropped weighed down by expectations for a strong rebound in supply this year after a protracted smelter bottleneck in 2022. The International Lead and Zinc Study Group (ILZSG) still thinks the global refined zinc market will be in supply shortfall this year but it's slashed its deficit forecast to a modest 45,000 tonnes from 150,000 tonnes at the time of its last statistical update in October. It's a fine margin in a 14-million-tonne global market but the shift captures the current bear narrative in zinc, which is down by 15% so far this year, the second-weakest price performance after nickel among the LME-traded metals. Global demand fell by 3.9% in 2022, led by an estimated 4.9%fall in China, according to ILZSG's April forecasts. Around 60% of zinc usage is in the form of galvanised steel, which is widely used in the construction and automotive sectors, both of which were hit hard by China's rolling lockdowns last year. The country's demand is expected to recover by 2.1% this year, matching that in the rest of the world, ILZSG said. Refined zinc production also fell last year to the tune of 3.8% but it will bounce back by a robust 3.1% this year. Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.5% to settle at 3687 while prices are down -0.8 rupees, now Zinc is getting support at 228 and below same could see a test of 226.1 levels, and resistance is now likely to be seen at 231.4, a move above could see prices testing 232.9.

Trading Ideas:

* Zinc trading range for the day is 226.1-232.9.
* Zinc prices dropped weighed down by expectations for a strong rebound in supply
* London Metal Exchange (LME) three-month metal hitting a two-and-a-half year low.
* China's post-lockdown bounce-back continues to disappoint.


Aluminium

Aluminium yesterday settled up by 0.19% at 206.35 as aluminium ingot inventory may remain low and continue to drop in May. Expectations of US interest rate hikes, the banking crisis, and debt ceiling negotiations all sent out negative signals, exacerbating the panic in the aluminium market. Driven by production resumption, the domestic operating aluminium capacity and output are expected to increase further in May. Data shows that China's aluminium output increased 1.5% year-on-year to 3.35 million mt in April (30 days) as aluminium enterprises in Guangxi and Guizhou continued to resume production, with daily output rising 1,533 mt from to about 111,600 mt. Aluminium output totalled 13.27 million mt from January to April, up 3.9% year on year. The output of aluminium semis in south-west China rose in April and the ratio of aluminium liquid increased 2.4 percentage points month-on-month to 73.4%. Changes in production capacity: In April, enterprises in Guangxi, Guizhou and Sichuan resumed a total capacity of 430,000 mt, and enterprises in Guizhou also put a new capacity of nearly 100,000 mt into production. In Yunnan, aluminium enterprises maintained stable production and the operating capacity remained stable. Technically market is under fresh buying as the market has witnessed a gain in open interest by 2% to settle at 3359 while prices are up 0.4 rupees, now Aluminium is getting support at 204.9 and below same could see a test of 203.5 levels, and resistance is now likely to be seen at 207.2, a move above could see prices testing 208.1.

Trading Ideas:

* Aluminium trading range for the day is 203.5-208.1.
* Aluminum recovers as ingot inventory may remain low and continue to drop in May
* However, expectations of US interest rate hikes, the banking crisis, and debt ceiling negotiations all sent out negative signals.
* Driven by production resumption, the domestic operating aluminium capacity and output are expected to increase.

Mentha Oil

Mentha oil yesterday settled down by -0.64% at 949.7 as a result of better sowing conditions in UP and Bihar. 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-Feb 2023, dropped by 10.67 percent to 2,227.55 tonnes as compared to 2,493.53 tonnes exported during Apr-Feb 2022. In February 2023 around 210.78 tonnes of Mentha was exported as against 233.21 tonnes in January 2023 showing a drop of 9.62%. In February 2023 around 210.78 tonnes of Mentha was exported as against 157.90 tonnes in February 2022 showing a rise of 33.49%. 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 -2.4 Rupees to end at 1119.5 Rupees per 360 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.12% to settle at 633 while prices are down -6.1 rupees, now Mentha oil is getting support at 943.7 and below same could see a test of 937.6 levels, and resistance is now likely to be seen at 956.7, a move above could see prices testing 963.6.

Trading Ideas:

* Mentha oil trading range for the day is 937.6-963.6.
* In Sambhal spot market, Mentha oil dropped  by -2.4 Rupees to end at 1119.5 Rupees per 360 kgs.
* Mentha oil prices settled down as a result of better sowing conditions in UP and Bihar.
* 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 up by 6% at 8024 as there were report of some fall in crop yields in the Marathwada region of Maharashtra due to rain in the last week. Support also seen as the untimely rains that occurred in various places in the Andhra Pradesh damaged turmeric crops causing huge loss to the farmers. Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall. Arrivals of new crop has improved as about 7-8 lakh bags touched the Nizamabad market so far wherein about 7 lakh bags were reported in Sangli. Market is running with huge stocks and stockists are trying to release their stocks on every rise in prices. Turmeric exports during Apr-Feb 2023, rose by 10.42 percent at 151,298.89 tonnes as compared to 137,017.23 tonnes exported during Apr- Feb 2022. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 12,484.25 tonnes in January 2023 showing a rise of 18.60%. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 10,358.22 tonnes in February 2022 showing a rise of 42.94%. 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 7229.95 Rupees gained 59.85 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 6.97% to settle at 15345 while prices are up 454 rupees, now Turmeric is getting support at 7704 and below same could see a test of 7382 levels, and resistance is now likely to be seen at 8186, a move above could see prices testing 8346.

Trading Ideas:

* Turmeric trading range for the day is 7382-8346.
* Turmeric rose on report of fall in yields
* Turmeric stocks were soaked in rain water in Guntur, Krishna and NTR Districts due to the rainfall.
* Turmeric exports during Apr-Jan 2023, rose by 7.76 percent at 1,36,492.59 tonnes
* In Nizamabad, a major spot market in AP, the price ended at 7229.95 Rupees gained 59.85 Rupees.


Jeera

Jeera yesterday settled down by -1.36% at 47510 on profit booking after prices rose 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. 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 181.35 Rupees to end at 48425.55 Rupees per 100 kg.Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.01% to settle at 9684 while prices are down -655 rupees, now Jeera is getting support at 46940 and below same could see a test of 46375 levels, and resistance is now likely to be seen at 48285, a move above could see prices testing 49065.

Trading Ideas:

* Jeera trading range for the day is 46375-49065.
* Jeera dropped on profit booking after rose due to good export demand.
* The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers.
* Cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags.
* In Unjha, a key spot market in Gujarat, jeera edged up by 181.35 Rupees to end at 48425.55 Rupees per 100 kg.

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