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Gold

Gold yesterday settled down by -0.71% at 59218 following the release of the US inflation report that indicated a slowdown in price pressures during May and reinforced the expectation that the Federal Reserve would likely maintain its current policy stance in the upcoming meeting scheduled for this week. In May, the headline inflation rate fell to 4%, slightly below the market consensus of 4.1%, while the core rate met expectations at 5.3%. Investors are eagerly awaiting the central bank's policy announcement on Wednesday, with a high likelihood that interest rates will be held within the 5%-5.25% range. Additionally, the market has priced in an almost 60% chance of a 25-basis-point rate hike in July. 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. These purchases are due to fall but remain at historically strong 600 metric tons in 2023. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.51% to settle at 13916 while prices are down -423 rupees, now Gold is getting support at 58973 and below same could see a test of 58728 levels, and resistance is now likely to be seen at 59674, a move above could see prices testing 60130.
 

Trading Ideas:
* Gold trading range for the day is 58728-60130.
* Gold dropped as US inflation slows
* The annual inflation rate in the US declined to 4% in May, the lowest since March 2021
* Reduced appetite from central banks to bring gold demand down in 2023

Silver

Silver yesterday settled down by -1.21% at 72094 as US inflation rate cooled more than expected in May, supporting the case for a pause in the Fed's tightening cycle this month. U.S. consumer prices barely rose in May and the annual increase in inflation was the smallest in more than two years, though underlying price pressures remained strong, supporting the view that the Federal Reserve would keep interest rates unchanged on Wednesday while adopting a hawkish posture. The smaller-than-expected rise in the Consumer Price Index, reported by the Labor Department, reflected decreases in the costs of energy products and services, including gasoline and electricity. But rents remained sticky and prices of used cars and trucks rose furtherIn the 12 months through May, the CPI climbed 4.0%. That was the smallest year-on-year increase since March 2021 and followed a 4.9% rise in April. The annual CPI peaked at 9.1% in June 2022, which was the biggest increase since November 1981, and is subsiding as last year's large rises drop out of the calculation. China's central bank lowered a short-term lending rate for the first time in 10 months. The European Central Bank announces its rate decision on Thursday, with a 25-basis points hike expected. Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.02% to settle at 13919 while prices are down -880 rupees, now Silver is getting support at 71454 and below same could see a test of 70815 levels, and resistance is now likely to be seen at 73311, a move above could see prices testing 74529.

Trading Ideas:
* Silver trading range for the day is 70815-74529.
* Silver dropped as US inflation rate cooled more than expected in May
* Markets remain divided on whether the US central bank would hold rates steady or resume its policy tightening in July.
* Investors also braced for monetary policy decisions from the European Central Bank and the Bank of Japan.

Crude oil

Crude oil yesterday settled up by 2.87% at 5729 as China's surprise rate cut offered some support as investors fret about the outlook for energy demand. OPEC maintained its projection for the increase of global oil demand in 2023 for a fourth consecutive month, but the producer organisation issued a warning that the second half of the year would likely see slower growth and growing global economic uncertainties. The Organisation of the Petroleum Exporting Countries (OPEC) predicted in its monthly report that global oil consumption will increase by 2.4%, or 2.35 million barrels per day (bpd), in 2023. This was essentially the same as the 2.33 million bpd estimate from the previous month. According to OPEC, its May output decreased by 464,000 bpd to 28.06 million bpd as a result of Saudi Arabia and other members' voluntary curbs going into force. The biggest drop since the COVID-19 pandemic in 2020, OPEC+ agreed to a 2 million bpd reduction in output goal starting in November of last year as prices began to decline. Chinese oil demand is now expected to rise by 840,000 bpd, OPEC said, up from the 800,000-bpd forecast last month, adding to a recovery after strict COVID-19 containment measures were scrapped. OPEC left its 2023 global economic growth forecast at 2.6% and said momentum was slowing. Technically market is under short covering as the market has witnessed a drop in open interest by -58.01% to settle at 7656 while prices are up 160 rupees, now Crude oil is getting support at 5600 and below same could see a test of 5472 levels, and resistance is now likely to be seen at 5805, a move above could see prices testing 5882.
 

Trading Ideas:
* Crude oil trading range for the day is 5472-5882.
* Crude oil gains as China's surprise rate cut offered some support
* OPEC oil demand forecast holds steady as economic clouds gather
* Chinese oil demand growth increased to 840,000 bpd

Natural Gas

Nat.Gas yesterday settled up by 3.38% at 192.6 boosted by higher demand and lower supply. An anticipated heatwave from June 21-28 is likely to boost demand for gas to produce power for air conditioning. Additionally, the domestic output is falling from May's record level of 102.5 bcfd. On the other hand, gas flowing to U.S. LNG export plants dropped to a five-month low due to maintenance at several facilities, including Cheniere Energy Inc's LNG. Data provider Refinitiv said 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. The amount of gas flowing from Canada to the U.S. was on track to rise to 7.5 bcfd on Monday from a near two-week low of 7.2 bcfd on Saturday when wildfires again caused energy firms to shut-in wells and pipelines. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 20 before turning hotter than normal through from June 21-27. With warmer weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 93.1 bcfd this week to 97.9 bcfd next week. Technically market is under short covering as the market has witnessed a drop in open interest by -19.91% to settle at 34119 while prices are up 6.3 rupees, now Natural gas is getting support at 188.4 and below same could see a test of 184.3 levels, and resistance is now likely to be seen at 195.9, a move above could see prices testing 199.3.
 

Trading Ideas:
* Natural gas trading range for the day is 184.3-199.3.
* Natural gas rose boosted by higher demand and lower supply.
* An anticipated heatwave from June 21-28 is likely to boost demand for gas to produce power for air conditioning.
* US output is falling from May's record level of 102.5 bcfd.


Copper

Copper yesterday settled up by 1.31% at 728.45 as the central bank of China lowered a short-term lending rate for the first time in 10 months to prop up its post-pandemic recovery. The cut to the lending rate signals possible easing for longer-term rates over the next week and beyond as demand and investor sentiment weaken, adding to the case for urgent policy stimulus to sustain growth. The People's Bank of China (PBOC) cut its seven-day reverse repo rate by 10 basis points to 1.90% from 2.00%, when it injected 2 billion yuan ($279.97 million) through the short-term bond instrument. China remains an outlier among global central banks as it loosens monetary policy to shore up growth while its major peers raise interest rates to counter surging consumer prices. On-warrant copper stocks in LME-registered warehouses registered a daily fall of 275 metric tons to a two-month low of 41,375 tonnes, LME data showed. Providing support from the supply side, a fire overnight at Sweden's Ronnskar smelter – a major producer of copper, zinc, lead and other metals – has halted output until further notice. Technically market is under short covering as the market has witnessed a drop in open interest by -6.43% to settle at 5503 while prices are up 9.4 rupees, now Copper is getting support at 722.1 and below same could see a test of 715.7 levels, and resistance is now likely to be seen at 733.2, a move above could see prices testing 737.9.
 

Trading Ideas:
* Copper trading range for the day is 715.7-737.9.
* Copper rose the central bank of China lowered a short-term lending rate.
* On-warrant copper stocks in LME-registered warehouses dropped to a two-month low of 41,375 tonnes.
* Providing support, a fire overnight at Sweden's Ronnskar smelter has halted output until further notice.


Zinc

Zinc yesterday settled up by 1.54% at 214.9 as supply will fall due to a growing number of smelters undertaking maintenance. Import window reopened in May, driving rapid inflows of imported zinc ingots. China's central bank lowered its seven-day reverse repo rate for the first time since August, in a move that typically signals potential changes in longer-term rates, to restore market confidence and prop up a stalling post-pandemic recovery. 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. Technically market is under short covering as the market has witnessed a drop in open interest by -8.05% to settle at 2788 while prices are up 3.25 rupees, now Zinc is getting support at 213 and below same could see a test of 211.1 levels, and resistance is now likely to be seen at 216.3, a move above could see prices testing 217.7.
 

Trading Ideas:
* Zinc trading range for the day is 211.1-217.7.
* Zinc rose as a growing number of smelters undertaking maintenance.
* 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 0.29% at 204.05 on China's decision to cut borrowing cost for the first time in 10 months to prop up its economic growth. 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, PBOC said in a statement. Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.88% to settle at 3204 while prices are up 0.6 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 204.5, a move above could see prices testing 204.9.
 

Trading Ideas:
* Aluminium trading range for the day is 203.1-204.9.
* Aluminium gains on China's decision to cut borrowing cost
* 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 up by 1.31% at 924.8 on level buying 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 2023, dropped by 42.52 percent to 97.85 tonnes as compared to 170.22 tonnes exported during Apr 2022. In April 2023 around 97.85 tonnes of Mentha was exported as against 202.95 tonnes in March 2023 showing a drop of 51.78%. 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 37.6 Rupees to end at 1083 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -3.29% to settle at 646 while prices are up 12 rupees, now Mentha oil is getting support at 916.6 and below same could see a test of 908.4 levels, and resistance is now likely to be seen at 931.5, a move above could see prices testing 938.2.
 

Trading Ideas:
* Mentha oil trading range for the day is 908.4-938.2.
* In Sambhal spot market, Mentha oil gained  by 37.6 Rupees to end at 1083 Rupees per 360 kgs.
* Mentha oil gains on level buying 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 up by 0.89% at 7912 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. Sowing in Tamil Nadu is expected to begin in the middle of June. In Maharashtra, Andhra Pradesh, and Telangana, farmers are awaiting rainfall before starting field preparation and sowing, which will commence after receiving two to three monsoon showers. Turmeric exports during Apr 2023, rose by 42.32 percent at 19,590.87 tonnes as compared to 13,765.03 tonnes exported during Apr 2022. In April 2023 around 19,590.87 tonnes of turmeric was exported as against 18,810.47 tonnes in March 2023 showing a rise of 4.15%. 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 7444.15 Rupees gained 11.65 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.15% to settle at while prices are up 70 rupees, now Turmeric is getting support at 7824 and below same could see a test of 7734 levels, and resistance is now likely to be seen at 7992, a move above could see prices testing 8070.

Trading Ideas:
* Turmeric trading range for the day is 7734-8070.
* Turmeric gains as there were report of some fall in crop yields due to rain.
* Support also seen as the untimely rains that occurred in various places in the Andhra Pradesh damaged turmeric crops.
* 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 7444.15 Rupees gained 11.65 Rupees.


Jeera

Jeera yesterday settled up by 1.98% at 49540 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 1031.6 Rupees to end at 48887.75 Rupees per 100 kg.Technically market is under fresh buying as the market has witnessed a gain in open interest by 13.03% to settle at while prices are up 960 rupees, now Jeera is getting support at 48780 and below same could see a test of 48015 levels, and resistance is now likely to be seen at 50045, a move above could see prices testing 50545.
 

Trading Ideas:
* Jeera trading range for the day is 48015-50545.
* Jeera 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 1031.6 Rupees to end at 48887.75 Rupees per 100 kg.

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