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Gold

Gold yesterday settled up by 0.1% at 50871 amid hopes the Federal Reserve might stop hiking rates during the later part of the year if rate hikes result in economic slowdown. Minutes of the Fed's May 3-4 policy meeting showed all participants backing a half-percentage-point rate increase to combat inflation, although that was not a surprise to the market. The U.S. dollar held near one-month lows, while the U.S. 10-year Treasury yield fell to its lowest level since April. Russia's central bank lowered its key interest rate to 11% and said it saw room for more cuts this year, as inflation slows from more than 20-year highs and the economy is about to contract. China's net gold imports via Hong Kong dropped about 59% to their lowest level in 14 months in April from March, as demand in the world's top gold consumer was sapped by a slowing economy and widespread lockdowns. Net imports stood at 5.231 tonnes in April, compared with 12.716 tonnes a month earlier, Hong Kong Census and Statistics Department data showed. Total gold imports via Hong Kong fell by 50% to 9.616 tonnes, the data showed. Extended lockdowns in dozens of cities, including commercial centre Shanghai, have stifled production and consumption in China. Technically market is under short covering as market has witnessed drop in open interest by -36.12% to settled at 2681 while prices up 52 rupees, now Gold is getting support at 50660 and below same could see a test of 50450 levels, and resistance is now likely to be seen at 51000, a move above could see prices testing 51130.

Trading Ideas:
# Gold trading range for the day is 50450-51130.
# Gold edged higher amid hopes the Federal Reserve might stop hiking rates during the later part of the year if rate hikes result in economic slowdown.
# Fed set to hike rates by 50 bps again in June and July
# China's gold imports via Hong Kong at 14 – month low as lockdowns bite

Silver

Silver yesterday settled up by 0.42% at 61793 as prices recovered after the number of signed contracts to buy existing homes in the US declined 3.9% in April of 2022, a sixth consecutive monthly drop, and pushing contracts to the lowest level since April of 2020. The latest FOMC meeting minutes offered few surprises, with many officials advocating the use of both interest rate increases and reductions in the size of the Fed's balance sheet to achieve a neutral posture. The dollar edged higher and Treasury yields gained ground amid signs that the Federal Reserve would stick to hiking interest rates by 50 basis points in June and July to combat inflation. The Fed is behind the curve with fighting inflation and board members believe that getting rate hikes in the books now "would leave the Committee well positioned later this year to assess the effects of policy firming." The number of Americans filing new claims for unemployment benefits fell last week, consistent with a labor market that remains tight amid strong demand for workers despite rising interest rates and tightening financial conditions. Initial claims for state unemployment benefits decreased 8,000 to a seasonally adjusted 210,000 for the week ended May 21, the Labor Department said. The U.S. economy shrunk by slightly more than initially estimated in the first quarter of the year, according to fresh data. Technically market is under short covering as market has witnessed drop in open interest by -2.19% to settled at 13392 while prices up 259 rupees, now Silver is getting support at 61356 and below same could see a test of 60919 levels, and resistance is now likely to be seen at 62114, a move above could see prices testing 62435.

Trading Ideas:
# Silver trading range for the day is 60919-62435.
# Silver prices recovered after US Pending home sales fall for 6th month
# The dollar edged higher amid signs that the Federal Reserve would stick to hiking interest rates by 50 basis points in June and July
# The number of Americans filing new claims for unemployment benefits fell last week

Crude oil

Crude oil yesterday settled up by 3.78% at 8872 on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world's second-largest crude exporter, after it invaded Ukraine. Russia's oil production is expected to decline to 480-500 million tonnes this year from 524 million tonnes in 2021, Deputy Prime Minister Alexander Novak said, state-run news agency RIA reported. The forecast is subject to change depending on the situation, Novak told reporters in Tehran, according to RIA. The Russian economy ministry has said Russia's oil output this year was set to fall 9.3% to 475.3 million tonnes in the base-case scenario. Crude inventories fell by 1 million barrels in the week to May 20 to 419.8 million barrels, compared with expectations for a 737,000-barrel drop. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels in the last week, EIA said. Refinery crude runs rose by 334,000 barrels per day in the last week, EIA said. Refinery utilization rates rose by 1.4 percentage points in the week. U.S. gasoline stocks fell by 482,000 barrels in the week to 219.7 million barrels, the EIA said, compared with expectations in a poll for a 634,000-barrel drop. Technically market is under fresh buying as market has witnessed gain in open interest by 46.87% to settled at 9705 while prices up 323 rupees, now Crude oil is getting support at 8665 and below same could see a test of 8458 levels, and resistance is now likely to be seen at 9001, a move above could see prices testing 9130.

Trading Ideas:
# Crude oil trading range for the day is 8458-9130.
# Crude oil prices rose on signs of tight supply while the EU wrangles with Hungary over plans to ban imports from Russia.
# Russia's Novak expects oil output to shrink up to 8.4% this year
# Crude inventories fell by 1 million barrels in the week to May 20 to 419.8 million barrels

Nat.Gas

Nat.Gas yesterday settled up by 0.87% at 707.8 on a reduction in daily output and an increase in fuel flowing to liquefied natural gas (LNG) export plants. EIA data showed US natural gas stocks rose by 80 billion cubic feet (bcf) last week, missing median estimates of an 89 bcf build and also less than the 5-year average injection of 97 bcf, which puts current inventory levels 15.3% below the 5-year average. The contract more than doubled in value since the beginning of 2022, supported by higher domestic and international demand amid sluggish output. Russia's war on Ukraine has caused a global energy crunch, with demand for US LNG set to remain elevated partly due to Europe's calls for US exports to help cut reliance on Russian gas. On top of that, prospects of increasing demand for cooling as the weather turns hotter in the United States could drive prices higher. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has climbed to 94.9 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April, off the monthly record of 96.1 bcfd in November 2021. On a daily basis, however, output dropped about 2.0 bcfd over the past five days to near a one-month low of 93.7 bcfd due mostly to declines in Texas. Technically market is under short covering as market has witnessed drop in open interest by -4.95% to settled at 8491 while prices up 6.1 rupees, now Natural gas is getting support at 689.6 and below same could see a test of 671.4 levels, and resistance is now likely to be seen at 730.2, a move above could see prices testing 752.6.

Trading Ideas:
# Natural gas trading range for the day is 671.4-752.6.
# Natural gas gained on a reduction in daily output and an increase in fuel flowing to liquefied natural gas (LNG) export plants.
# Prospects of increasing demand for cooling as the weather turns hotter in the United States could drive prices higher.
# EIA data showed US natural gas stocks rose by 80 billion cubic feet (bcf) last week

Copper

Copper yesterday settled up by 0.03% at 772.05 as concerns grew that the global economy may plunge into a recession and dampen demand for industrial metals. China's central bank said it would promote more credit for smaller firms and boost financial institutions' confidence to lend funds, as policymakers in the world's top metals consumer struggle to get the COVID-stricken economy back on track. Years of under-investment in mining of metals essential to energy transition, supply shocks, and high energy prices will continue to drive commodity prices higher. Talks between indigenous Peruvian communities and the government to end a protest that has halted operations at MMG Ltd's Las Bambas copper mine ended without agreements. Minutes from the Federal Reserve's early-May meeting showed a majority backing half-percentage-point rate hikes in June and July, and as persistent concerns over global growth sapped confidence. The world refined copper market showed a 25,000 tonne deficit in March, compared with a 95,000 tonnes surplus in February, the International Copper Study Group (ICSG) said in its latest monthly bulletin. In 2021 the market was in a deficit of 439,000 tonnes, against a 415,000 tonne shortfall a year earlier, the ICSG said. World refined copper output in March was 2.206 million tonnes while consumption was 2.231 million tonnes. Technically market is under short covering as market has witnessed drop in open interest by -1.52% to settled at 3875 while prices up 0.2 rupees, now Copper is getting support at 766.5 and below same could see a test of 760.9 levels, and resistance is now likely to be seen at 775.1, a move above could see prices testing 778.1.

Trading Ideas:
# Copper trading range for the day is 760.9-778.1.
# Copper settled flat as concerns grew that the global economy may plunge into a recession and dampen demand for industrial metals.
# China's central bank said it would promote more credit for smaller firms and boost financial institutions' confidence to lend funds
# Copper market in 25,000 tonne deficit in March 2022 – ICSG

Zinc

Zinc yesterday settled down by -0.34% at 320.95 as concerns grew that the global economy may plunge into a recession and dampen demand for metals. The IIF lowered its forecast for global GDP growth this year from 4.6% to 2.3%, with the G3 (US, Eurozone and Japan) growing at 1.9% this year. They expect China's economy to grow at a rate of 3.5% this year, down from the previous estimate of 5.1%. US core capital goods orders growth slowed in April as shipments increased. On the macro front, the minutes of the Fed meeting showed that most participants thought it was appropriate to raise interest rates by 0.5 percentage points in June and July, and some Fed officials thought it was possible and necessary to raise interest rates again in September. Chinese Premier Li Keqiang pointed out that he would give more prominence to stabilising economic growth, focus on protecting market players in order to preserve employment and people's livelihood, protect the resilience of the Chinese economy, and do everything possible to ensure that the economy achieves reasonable growth in the second quarter and that the unemployment rate falls as soon as possible to keep the economy running within a reasonable range. Technically market is under long liquidation as market has witnessed drop in open interest by -11.47% to settled at 895 while prices down -1.1 rupees, now Zinc is getting support at 318.1 and below same could see a test of 315.1 levels, and resistance is now likely to be seen at 323.2, a move above could see prices testing 325.3.

Trading Ideas:
# Zinc trading range for the day is 315.1-325.3.
# Zinc dropped as concerns grew that the global economy may plunge into a recession and dampen demand for metals.
# The IIF lowered its forecast for global GDP growth this year from 4.6% to 2.3%, with the G3 (US, Eurozone and Japan) growing at 1.9% this year.
# On the supply side, domestic ore supply was still tight, while LME inventory remained low.

Aluminium

Aluminium yesterday settled down by -0.27% at 241.3 as market is still featured by weak fundamentals, as the supply grows more slowly while the demand remains relatively poor. According to the Fed’s latest monetary meeting minutes, all participants supported a 50-basis-point rate hike to fight the inflation, which is in line with market expectations. In China, the central government once again held a video meeting to highlight of importance of stable economic growth. The downstream demand now remains the focus of market participants. Currently speaking, downstream operating rates have been rising on easing pandemic situation, but the terminal orders have not improved substantially. According to statistics, the aluminium ingot social inventories across China’s eight major markets totalled 936,000 mt as of May 26, down 29,000 mt from a week ago and 50,000 mt from the end of April. The inventories of aluminium billets in China’s major markets dropped by 6,300 mt on a weekly basis as of May 26. The LME aluminium inventory data was updated with a total decrease of 6,000 mt, of which the Klang warehouse contributed more than half of the decrease, with a total decrease of 3,700 mt, followed by Singapore with a decrease of 1,500 mt. Vlissingen warehouse decreased by 375 mt and Kaohsiung warehouse by 225 mt. Technically market is under fresh selling as market has witnessed gain in open interest by 4.84% to settled at 2620 while prices down -0.65 rupees, now Aluminium is getting support at 239.9 and below same could see a test of 238.3 levels, and resistance is now likely to be seen at 243.2, a move above could see prices testing 244.9.

Trading Ideas:
# Aluminium trading range for the day is 238.3-244.9.
# Aluminium dropped as market is still featured by weak fundamentals, as the supply grows more slowly while the demand remains relatively poor.
# In China, the central government once again held a video meeting to highlight of importance of stable economic growth.
# The Fed’s latest monetary meeting minutes, all participants supported a 50-basis-point rate hike to fight the inflation
 

Mentha oil

Mentha oil yesterday settled down by -2.65% at 1050.2 on profit booking after prices seen supported amid low production this season and improving demand post-pandemic. Support also seen with Rupee weakness export demand is going to be firm also post pandemic global demand is improving. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. Prices gained on reports that due to poor prices farmers has shifted to other crops resulting lower production. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. Mentha farming has lost its allure in Uttar Pradesh as farmers struggle without stable price, MSP and government support. High input costs and lack of support price have drastically brought down the return of farmers who have already been struggling to increase their incomes. In Sambhal spot market, Mentha oil dropped by -6.3 Rupees to end at 1194.1 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 3.98% to settled at 1072 while prices down -28.6 rupees, now Mentha oil is getting support at 1037.2 and below same could see a test of 1024.2 levels, and resistance is now likely to be seen at 1071.1, a move above could see prices testing 1092.

Trading Ideas:
# Mentha oil trading range for the day is 1024.2-1092.
# In Sambhal spot market, Mentha oil dropped  by -6.3 Rupees to end at 1194.1 Rupees per 360 kgs.
# Mentha oil dropped on profit booking after prices seen supported amid low production this season and improving demand post-pandemic.
# Synthetic Mentha supply remains uninterrupted.
# With Rupee weakness export demand is going to be firm also post pandemic global demand is improving.

Turmeric

Turmeric yesterday settled up by 0.03% at 7918 due to good arrivals from new crop and less demand. Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased. Kocha arrivals are good at markets in Sangli, Hingoli and Nanded regions in Maharashtra. Due to aggressive coverages by oleoresin companies, prices were steady during the month. Panangali arrivals have started in Salem, Erode and Gundalpet markets. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Currently, export demand is normal but is expected to pick up. As per latest export figures, turmeric exports in Feb 2022 were lower by 17% y/y at 10400 tonnes vs 12,575 tonnes while in FY 2021/22 (Apr-Feb), exports down 20% at 1.37 lakh tons compared to last year but higher by 8.3% compared with 5-year average. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Export demand too reported sluggish despite report of some queries from Bangladesh. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In Nizamabad, a major spot market in AP, the price ended at 8154.15 Rupees dropped -150.25 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.77% to settled at while prices up 2 rupees, now Turmeric is getting support at 7840 and below same could see a test of 7760 levels, and resistance is now likely to be seen at 7990, a move above could see prices testing 8060.

Trading Ideas:
# Turmeric trading range for the day is 7760-8060.
# Turmeric settled flat due to good arrivals from new crop and less demand.
# Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased.
# Turmeric harvesting in Indonesia is likely to start during June – July 2022 and crop is reported to be normal.
# In Nizamabad, a major spot market in AP, the price ended at 8154.15 Rupees dropped -150.25 Rupees.

Jeera

Jeera yesterday settled up by 0.33% at 21350 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving. Similarly, in Rajasthan also daily arrivals have remained weak, in Jodhpur market around 1,500 bags, at Nagaur 500 bags and other centres 500 bags arrivals noted. Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected. Demand from China has declined due to higher domestic prices in India. Around 32,407 tonnes and 42,788 tonnes have been exported to Bangladesh and China respectively during 2021-22 (Apr-Feb). Cumin seed exports during the current season are likely to remain low as the current crop is very less this time. Cumin seed exports during 2021-22 (Apr-Feb) has declined by 24 percent at 1.91 lakh tonnes as compared to 2.52 lakh tonnes exported last year same period. In the month of February 2022 around 12,988 tonnes cumin seed exported as against 17,114 in February 2021. In International markets, Indian Jeera is quoted around 2850 to 2950 dollar per tonnes. In Unjha, a key spot market in Gujarat, jeera edged up by 32.1 Rupees to end at 21500.5 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -0.31% to settled at while prices up 70 rupees, now Jeera is getting support at 21200 and below same could see a test of 21055 levels, and resistance is now likely to be seen at 21465, a move above could see prices testing 21585.

Trading Ideas:
# Jeera trading range for the day is 21055-21585.
# Jeera settled up because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
# Currently, steady demand can be seen from Bangladesh and other Islamic countries. And due to Bakri-Eid in July further increase in demand is expected.
# Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving
# In Unjha, a key spot market in Gujarat, jeera edged up by 32.1 Rupees to end at 21500.5 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -2.53% at 46620 due to the high price of cotton, the Spinners' Association of South India has announced the closure of the mills, due to which most of the smaller mills have closed down and the demand for cotton will be seen to decrease due to decrease in production in the big mills. In North India's states of Punjab, Haryana and Rajasthan, the water from canals will be released late, which will lead to late sowing of cotton, but there is no report of the possibility of very low sowing. Cotton sowing in North India is expected to increase by 15% from last year. Texas, had concerns about production due to lack of rainfall, but with good rainfall in Texas for the past one week, there is no problem with U.S. cotton production. Cotton sowing in China has increased, but with only one to two percent increased, the crop is unlikely to grow much. Similarly, in Pakistan, production is also expected to increase due to increase in sowing from last year. The USDA in its latest report lowered U.S. production by one million bales as the drought situation in Texas is predicted to reduce harvested acres. In spot market, Cotton dropped by -160 Rupees to end at 48590 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 1.87% to settled at 2947 while prices down -1210 rupees, now Cotton is getting support at 46130 and below same could see a test of 45650 levels, and resistance is now likely to be seen at 47410, a move above could see prices testing 48210.

Trading Ideas:
# Cotton trading range for the day is 45650-48210.
# Cotton dropped due to the high price of cotton, the Spinners' Association of South India has announced the closure of the mills
# The Telangana government is likely to encourage the cultivation of cotton crop on large scale this kharif
# The USDA in its latest report lowered U.S. production by one million bales
# In spot market, Cotton dropped  by -160 Rupees to end at 48590 Rupees.

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