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Gold

Gold yesterday settled down by -0.16% at 58714 as yield on the US 10-year Treasury note edged higher to 3.75% after prepared remarks from Fed Chair to the Congress reinforced last week message that the Fed will raise rates further this year to fight high inflation. The Federal Reserve kept the fed funds rate steady as expected in June, but signalled further hikes would be necessary. Around 79% of market participants expect the Fed to raise rates by 25bps next month. Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year, as inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go, prepared remarks from Fed Chair Powell monetary policy report to the Congress showed. The consumer price inflation in the United Kingdom held steady at 8.7 percent in May 2023, unchanged from the previous month's 13-month low and above market expectations of 8.4 percent. The rate remained significantly higher than the Bank of England's target of 2.0 percent, adding to concerns about its stickiness and placing additional pressure on policymakers to maintain the bank's ongoing tightening campaign. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.81% to settle at 13274 while prices are down -95 rupees, now Gold is getting support at 58437 and below same could see a test of 58161 levels, and resistance is now likely to be seen at 58927, a move above could see prices testing 59141.

Trading Ideas:
* Gold trading range for the day is 58161-59141.
* Gold dropped as Fed will raise rates further this year to fight high inflation.
* FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year.
* The consumer price inflation in the United Kingdom held steady at 8.7 percent in May 2023

Silver

Silver yesterday settled down by -1.62% at 69247 as dollar index climbed to 102.5, marking its fifth consecutive session of gains as investors are increasingly confident that the Federal Reserve will raise interest rates further this year, following a temporary pause in June. Fed Chair Powell emphasized that the process of achieving the target inflation rate of 2% still has a long way to go, indicating that it may be appropriate to raise interest rates to some extent by the end of the year. While the Fed temporarily halted its aggressive tightening campaign last week, it hinted at the possibility of further policy tightening in the coming months. In its latest report to Congress, the central bank highlighted that inflation in key sectors of the US services industry remains elevated and has not shown signs of easing. Meanwhile, upbeat U.S. housing data and stronger than expected U.K. inflation data revived fears about inflation and interest-rate rises. Official data showed that U.K. consumer prices logged a steady growth rather than a slowdown in May. Core inflation accelerated further, adding pressure on the Bank of England to raise the benchmark rate by half a percentage point. Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.28% to settle at 14128 while prices are down -1140 rupees, now Silver is getting support at 68395 and below same could see a test of 67542 levels, and resistance is now likely to be seen at 70260, a move above could see prices testing 71272.

Trading Ideas:
* Silver trading range for the day is 67542-71272.
* Silver dropped as Fed seen raising rates again
* Dollar index climbed to 102.5, marking its fifth consecutive session of gains
* Fed Chair Powell emphasized that the process of achieving the target inflation rate of 2% still has a long way to go

Crude oil

Crude oil yesterday settled up by 2.27% at 5953 on expectations of a possible drawdown in U.S. crude stocks. Meanwhile, fears of inflation and interest rates returned to the fore after data showed U.K. consumer price inflation remained stuck at 8.7 per cent in May, worse than the 8.4 per cent expected. China's oil imports from Russia jumped to a record high in May, government data showed, as private refiners continue to snap up sanctioned ESPO and Urals shipments at discounts. On the supply side, Iran's crude exports and oil output have hit new highs this year despite U.S. sanctions. Russia is also set to increase seaborne diesel and gasoil exports this month, outweighing cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia itself. China's 2023 crude oil demand is expected to grow less than previously expected, as strong demand for electric vehicles weighs on gasoline demand, an expert at China National Petroleum Corporation's (CNPC) research arm said. The state oil company's Economic & Technology Research Institute (ETRI) in March forecast oil demand reaching 743 million metric tons this year for the world's top crude importer. Technically market is under short covering as the market has witnessed a drop in open interest by -24.64% to settle at 7998 while prices are up 132 rupees, now Crude oil is getting support at 5861 and below same could see a test of 5770 levels, and resistance is now likely to be seen at 6009, a move above could see prices testing 6066.

Trading Ideas:
* Crude oil trading range for the day is 5770-6066.
* Crude oil gains on expectations of a possible drawdown in U.S. crude stocks.
* China's crude imports from Russia surge to record in May
* Iran's crude exports and oil output have hit new highs this year despite U.S. sanctions.

Natural Gas

Nat.Gas yesterday settled up by 1.49% at 210.8 as the drop in output in recent weeks and forecasts for the weather to remain hot through at least early July offset expectations the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants will remain low due to maintenance work. Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell from a record 102.5 billion cubic feet per day (bcfd) in May to 101.6 bcfd so far in June due in part to ongoing pipeline maintenance in the Haynesville shale in Arkansas, Louisiana and Texas, and other basins. Meteorologists forecast the weather in the Lower 48 states would turn from mostly near-normal from June 21-23 to hotter-than-normal from June 24-July 6. With hot weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 94.2 bcfd this week to 98.8 bcfd next week. Those forecasts were similar to Refinitiv's outlook on Tuesday. U.S. exports to Mexico rose to an average of 6.6 bcfd so far in June, up from 6.2 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021. Technically market is under short covering as the market has witnessed a drop in open interest by -31.14% to settle at 11258 while prices are up 3.1 rupees, now Natural gas is getting support at 203.9 and below same could see a test of 197 levels, and resistance is now likely to be seen at 214.8, a move above could see prices testing 218.8.

Trading Ideas:
* Natural gas trading range for the day is 197-218.8.
* Natural gas gains amid the drop in output in recent weeks
* However, amount of gas flowing to US LNG export plants will remain low due to maintenance work
* Average gas output in the U.S. Lower 48 states fell from a record 102.5 billion cubic feet per day (bcfd) in May


Copper

Copper yesterday settled up by 0.21% at 732.3 underpinned by tightening supplies ahead of a long weekend in key consumer China. Higher offers amid tight supply in the spot market lifted copper premium to an eight-month high of 640 yuan a tonne. SHFE copper stocks stood at 61,090 tonnes last Friday, having dropped 70% from a February peak. The global refined copper market had a surplus of 42,000 tonnes in April, compared with a 3,000-tonne surplus the previous month, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output was 2.307 million tonnes and consumption was 2.265 million tonnes, the ICSG said. For the first four months of the year, the market was in a 384,000-tonne surplus compared with a 43,000-tonne deficit in the same period a year earlier, the ICSG said. Preliminary official Chinese data showed refined production rose 15% and apparent demand in China grew by 7% in the first four months of 2023, while refined usage in the rest of the world grew by 3%, the ICSG added. China's refined copper production in May jumped 12.9% year on year to 1.1 million metric tons, a record monthly high, data from the National Bureau of Statistics showed. Technically market is under short covering as the market has witnessed a drop in open interest by -24.46% to settle at 2394 while prices are up 1.5 rupees, now Copper is getting support at 726.6 and below same could see a test of 720.7 levels, and resistance is now likely to be seen at 736.3, a move above could see prices testing 740.1.

Trading Ideas:
* Copper trading range for the day is 720.7-740.1.
* Copper gains underpinned by tightening supplies ahead of a long weekend in China.
* World refined copper market in 42,000 tonne surplus in April – ICSG
* China May refined copper output hits record high

Zinc

Zinc yesterday settled up by 1% at 217.25 on short covering amid market optimism China would deliver stimulus and drive demand. However, trading volumes in China were expected to be limited as the Chinese markets close on Thursday and Friday for the Dragon Boat Festival. 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. Prices rallied earlier in the week amid concerns over supply following the announcement by Swedish miner Boliden that it will halt production at Europe's largest zinc mine in Ireland within the next month due to "unsustainable financial losses." Looking ahead, S&P Global predicts a modest 1.4% growth in global refined zinc demand for 2023, while global refined zinc output is expected to increase by a mere 1.9% as power shortages in China restrict production. The People’s Bank of China (PBoC) slashed the one-year medium-term lending facility (MLF) rate by 10 basis points to 2.65% on June 15th, 2023, marking the first reduction since August 2022, after lowering the reverse repurchase rate by 10 basis points to 1.9% on June 13th, 2023 as policymakers sought to support a recovery in the economy. Technically market is under short covering as the market has witnessed a drop in open interest by -10.5% to settle at 1680 while prices are up 2.15 rupees, now Zinc is getting support at 214.5 and below same could see a test of 211.7 levels, and resistance is now likely to be seen at 219, a move above could see prices testing 220.7.

Trading Ideas:
* Zinc trading range for the day is 211.7-220.7.
* Zinc rose on short covering on market optimism China would deliver stimulus
* Swedish miner Boliden that it will halt production within the next month due to "unsustainable financial losses."
* S&P Global predicts a modest 1.4% growth in global refined zinc demand for 2023


Aluminium

Aluminium yesterday settled up by 0.02% at 202.85 as China's aluminium imports in May climbed 1.8% from a year earlier but arrivals were lower than the prior month amid weak industrial demand. Water levels in Yunnan Province has increased, and local smelters may enter the stage of resumption of production in the near future. Investor sentiment was boosted by U.S. economic data showing an unexpected rise in May retail sales as consumers stepped up purchases of motor vehicles and building materials, which could help to stave off a recession in the near term. Hopes have grown that China would unveil more measures to shore up its shaky post-pandemic recovery after new home prices rose at a slower pace in May and property investment slumped at the steepest pace in more than two decades. China's primary aluminium output in May rose only slightly from a year earlier, data showed, as production in most regions remained steady while output growth was capped by extended power curbs in the southwestern Yunnan province. The world's top aluminium producer churned out 3.42 million metric tons of primary aluminium last month, up 1.1% from the same period a year ago, according to data from the National Bureau of Statistics. Technically market is under short covering as the market has witnessed a drop in open interest by -8.45% to settle at 2395 while prices are up 0.05 rupees, now Aluminium is getting support at 201.3 and below same could see a test of 199.7 levels, and resistance is now likely to be seen at 203.9, a move above could see prices testing 204.9.

Trading Ideas:
* Aluminium trading range for the day is 199.7-204.9.
* Aluminium settled flat as China's aluminium imports in May climbed 1.8%.
* China's primary aluminium output in May rose only slightly from a year earlier
* Global aluminium output up 0.3% y/y to 5.6 mln T in April – IAI

Mentha oil

Mentha oil yesterday settled down by -0.72% at 898.1 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 dropped by -18.9 Rupees to end at 1033.4 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -17.81% to settle at 383 while prices are down -6.5 rupees, now Mentha oil is getting support at 893.1 and below same could see a test of 888.1 levels, and resistance is now likely to be seen at 903.5, a move above could see prices testing 908.9.

Trading Ideas:
* Mentha oil trading range for the day is 888.1-908.9.
* In Sambhal spot market, Mentha oil dropped  by -18.9 Rupees to end at 1033.4 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 up by 5.85% at 9548 as the kharif sowing acreage is expected to decrease during the current season. In Maharashtra, the sowing area is projected to decline by 10%-20%. Similarly, in Tamil Nadu, the acreage is expected to decrease by 10%-15%. In Andhra Pradesh and Telangana, there is an anticipated decline of 18%-22% in the acreage compared to the previous season. Crop arrivals for the week ending June 10, 2023, were significantly lower at 3,731.85 MT, down 55% from the previous 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 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 8323.5 Rupees gained 301.05 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.76% to settle at 15665 while prices are up 528 rupees, now Turmeric is getting support at 9044 and below same could see a test of 8542 levels, and resistance is now likely to be seen at 9804, a move above could see prices testing 10062.

Trading Ideas:
* Turmeric trading range for the day is 8542-10062.
* Turmeric prices rose as the kharif sowing acreage is expected to decrease
* 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 8323.5 Rupees gained 301.05 Rupees.

Jeera

Jeera yesterday settled up by 3.73% at 53640 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 1877.9 Rupees to end at 53591.5 Rupees per 100 kg.Technically market is under short covering as the market has witnessed a drop in open interest by -5.68% to settle at 9213 while prices are up 1930 rupees, now Jeera is getting support at 51770 and below same could see a test of 49905 levels, and resistance is now likely to be seen at 55140, a move above could see prices testing 56645.

Trading Ideas:
* Jeera trading range for the day is 49905-56645.
* Jeera rose due to good export demand and expectations of lower stocks
* 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 1877.9 Rupees to end at 53591.5 Rupees per 100 kg.

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