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Gold

Gold yesterday settled up by 0.13% at 51050 on a softer dollar, while expectations of more aggressive interest rate hikes by the U.S. Federal Reserve pared. Minutes of the Fed's May 3-4 policy meeting highlighted, as the market expected, that most participants favouring additional 50 basis point rate hikes at the June and July meetings. The minutes showed the Fed grappling with how best to navigate the economy towards lower inflation without causing a recession or pushing the unemployment rate substantially higher. The world is moving rapidly toward increasing use of digital payments and an official digital version of the U.S. dollar could help safeguard its global dominance as other countries issue their own, Federal Reserve Vice Chair Lael Brainard said. Gold discounts widened in India as demand faltered due to rise in prices, while demand in top consumer China was yet to see a substantial pick-up as COVID-induced restrictions were being gradually eased. Dealers were offering a discount of up to $5 an ounce over official domestic prices, down from the last week's discount of $2. Demand in China was muted with discounts hovering around $2 per ounce, the same as last week. In Hong Kong, gold was sold at a discount of about $2, while Singapore saw premiums between $1.20 and $1.70 an ounce. Technically market is under fresh buying as market has witnessed gain in open interest by 6.25% to settled at 13028 while prices up 64 rupees, now Gold is getting support at 50941 and below same could see a test of 50831 levels, and resistance is now likely to be seen at 51203, a move above could see prices testing 51355.

Trading Ideas:
# Gold trading range for the day is 50831-51355.
# Gold prices rose on a softer dollar, while expectations of more aggressive interest rate hikes by the U.S. Federal Reserve pared.
# Fed's Brainard: We can't take global status of U.S. dollar for granted
# Gold discounts widened in India as demand faltered due to rise in prices, while demand in top consumer China was yet to see a substantial pick-up

Silver

Silver yesterday settled up by 0.52% at 62116 as the dollar extended a slide and Treasury yields held steady amid easing worries about Fed policy moves. The dollar dropped amid expectations that the Federal Reserve may become less aggressive in tightening rates later in the year. Cautious comments by some Fed policymakers including Atlanta Fed President Raphael Bostic and the latest FOMC meeting minutes suggesting a flexible approach on rates prompted traders to lower rate hike expectations. U.S. consumer spending rose more than expected in April as households boosted purchases of goods and services, and the increase in inflation slowed, which could underpin economic growth in the second quarter amid rising fears of a recession. The economy's near-term prospects were also brightened by other data from the Commerce Department showing the goods trade deficit narrowed sharply last month. A record trade deficit caused a contraction in output in the first quarter. The personal consumption expenditure price index in the United States increased 0.2% month-over-month in April of 2022, much less than a 0.9% rise in March. The annual rate also slowed to 6.3% from a record high of 6.6%. Energy prices increased 30.4%, less than 33.9% in March but food inflation quickened to 10%. Technically market is under short covering as market has witnessed drop in open interest by -7.92% to settled at 12332 while prices up 323 rupees, now Silver is getting support at 61769 and below same could see a test of 61421 levels, and resistance is now likely to be seen at 62676, a move above could see prices testing 63235.

Trading Ideas:
# Silver trading range for the day is 61421-63235.
# Silver gained as the dollar extended a slide and Treasury yields held steady amid easing worries about Fed policy moves.
# The dollar dropped amid expectations that the Federal Reserve may become less aggressive in tightening rates later in the year.
# U.S. consumer spending rose more than expected in April as households boosted purchases of goods and services

Crude oil

Crude oil yesterday settled up by 0.28% at 8897 recovered from lows and ended the week higher supported by the prospect of a tight market due to rising gasoline consumption in the United States in summer, and also the possibility of an EU ban on Russian oil. Ministers from the Group of Seven countries called on OPEC to act responsibly to ease a global energy crunch brought on by the Russian invasion of Ukraine, even as they announced a breakthrough commitment to phase out coal-fuelled power. OPEC+ is set to stick to an oil production deal agreed last year at its meeting on June 2 and raise July output targets by 432,000 barrels per day, rebuffing Western calls for a faster increase to lower surging prices. Western nations, grappling with record inflation rates that are threatening economic growth, have repeatedly asked the group to accelerate its output hikes. The latest EIA data showed a larger-than-expected drawdown in US crude inventories last week due to soaring exports, highlighting a tight global market. Meanwhile, the EU continues to haggle with Hungary over banning oil imports from Russia with European Council Charles Michel saying he is confident that an agreement can be reached before the council’s next meeting on May 30. Technically market is under fresh buying as market has witnessed gain in open interest by 4.38% to settled at 10130 while prices up 25 rupees, now Crude oil is getting support at 8792 and below same could see a test of 8687 levels, and resistance is now likely to be seen at 8973, a move above could see prices testing 9049.

Trading Ideas:
# Crude oil trading range for the day is 8687-9049.
# Crude recovered from lows and ended the week higher supported by the prospect of a tight market due to rising gasoline consumption in US in summer
# OPEC+ set to stick to modest output hike for July
# G7 calls on OPEC to play key role to ease global energy supplies.

Nat.Gas

Nat.Gas yesterday settled down by -5.27% at 670.5 on rising output and forecasts for less demand over the next two weeks than previously expected. That decline came even though U.S. power generators were forced to burn more gas for a second week in a row due to lower wind power. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has climbed to 95.0 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. Refinitiv projected average U.S. gas demand, including exports, would hold around 88.5 bcfd for through to mid-June. The forecast for this week and next were lower than Refinitiv forecast. The average amount of gas flowing to U.S. LNG export plants rose to 12.5 bcfd so far in May from 12.2 bcfd in April. It hit a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. Since the United States will not be able to produce much more LNG soon, it worked with allies to divert exports from elsewhere to Europe to help European Union countries and others break their dependence on Russian gas after Russia's invasion of Ukraine. Technically market is under long liquidation as market has witnessed drop in open interest by -31.24% to settled at 5838 while prices down -37.3 rupees, now Natural gas is getting support at 646.5 and below same could see a test of 622.6 levels, and resistance is now likely to be seen at 692, a move above could see prices testing 713.6.

Trading Ideas:
# Natural gas trading range for the day is 622.6-713.6.
# Natural gas fell on rising output and forecasts for less demand over the next two weeks than previously expected.
# That decline came even though U.S. power generators were forced to burn more gas for a second week in a row due to lower wind power.
# EIA data showed US natural gas stocks rose by 80 billion cubic feet (bcf) last week

Copper

Copper yesterday settled up by 0.63% at 776.9 as a weaker U.S. dollar underpinned prices, although worries about an economic slowdown in top metals consumer China persisted. Profits at China's industrial firms fell at their fastest pace in two years in April as high raw material prices and supply chain chaos caused by COVID-19 curbs squeezed margins and disrupted factory activity. Profit shrank 8.5% from a year earlier, the statistics bureau said, swinging from a 12.2% gain in March according to calculations based on official data. The slump is the biggest since March 2020. The industrial sector has been hit hard by the stringent and widespread anti-virus measures that have shut factories and clogged highways and ports. The latest data showed China's copper imports fell 4% from a year earlier in April, as covid-19 lockdowns hurt manufacturing activity and consumption. Demand is expected to rebound as China announced new stimulus measures including rolling out new investment projects while an effort has been made to lift a prolonged lockdown in Shanghai on June 1st. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 23.7 percent from last Friday, the exchange said. 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. Technically market is under short covering as market has witnessed drop in open interest by -4.54% to settled at 3699 while prices up 4.85 rupees, now Copper is getting support at 773 and below same could see a test of 769 levels, and resistance is now likely to be seen at 779.5, a move above could see prices testing 782.

Trading Ideas:
# Copper trading range for the day is 769-782.
# Copper rose as a weaker U.S. dollar underpinned prices, although worries about an economic slowdown in top metals consumer China persisted.
# China's industrial profit falls sharply in April amid COVID curbs
# Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 23.7 percent from last Friday.

Zinc

Zinc yesterday settled up by 2.94% at 330.4 as zinc ingot social inventory across seven major markets totalled 14,800 yuan/mt, dropped greatly supporting prices. Total zinc ingots inventories across seven major markets in China stood at 251,000 mt as of Friday May 27, down 12,900 mt from May 23, down 14,800 mt from May 20. Inventory of zinc continued to decrease sharply. In Shanghai, after the pandemic prevention and control measures loosened, pace of downstream delivery-taking remained stable. Market inventory continued to reduce amid tight arrivals. On the macro front, the industrial profits of companies above state designated scale in January-April rose 3.5% YoY, while dropped 8% YoY in April. The electricity consumption in Shanghai recovered to 78% of that in the same period last year, and demand in China is likely to stabilise with stabilisation-oriented policies and improving pandemic situation. The global zinc market moved to a deficit of 6,300 tonnes in March from a revised surplus of 26,500 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a surplus of 14,300 tonnes in February. During the first three months of 2022, ILZSG data showed a surplus of 11,000 tonnes versus a surplus of 108,000 tonnes in the same period of 2021. Technically market is under fresh buying as market has witnessed gain in open interest by 39.66% to settled at 1250 while prices up 9.45 rupees, now Zinc is getting support at 324.7 and below same could see a test of 319 levels, and resistance is now likely to be seen at 333.4, a move above could see prices testing 336.4.

Trading Ideas:
# Zinc trading range for the day is 319-336.4.
# Zinc gained as zinc ingot social inventory across seven major markets totalled 14,800 yuan/mt, dropped greatly supporting prices.
# Total zinc ingots inventories across seven major markets in China stood at 251,000 mt down 12,900 mt.
# Global zinc market flips to deficit of 6,300 T in March – ILZSG.

Aluminium

Aluminium yesterday settled up by 0.1% at 241.55 supported by improving demand and falling stocks, and the spots in east China were mostly in premiums of 0 yuan/mt, up 10 yuan/mt from a day ago. Overall transactions were moderate, and downstream purchased on rigid demand despite rising prices. 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 overall decline was led by Wuxi, where arrivals dropped and will remain limited. The inventories of aluminium billets in China’s major markets dropped by 6,300 mt on a weekly basis as of May 26, with Foshan, Nanchang and Changzhou contributing to most of the decline Downstream producers in Changzhou and Nanchang restocked as needed. Arrivals in Foshan remained high, while consumption was relatively poor. U.S. consumer spending rose more than expected in April as households boosted purchases of goods and services, and the increase in inflation slowed, which could underpin economic growth in the second quarter amid rising fears of a recession. The economy's near-term prospects were also brightened by other data from the Commerce Department showing the goods trade deficit narrowed sharply last month. Technically market is under short covering as market has witnessed drop in open interest by -1.41% to settled at 2583 while prices up 0.25 rupees, now Aluminium is getting support at 240.2 and below same could see a test of 238.7 levels, and resistance is now likely to be seen at 243, a move above could see prices testing 244.3.

Trading Ideas:
# Aluminium trading range for the day is 238.7-244.3.
# Aluminium gained supported by improving demand and falling stocks
# The spots in east China were mostly in premiums of 0 yuan/mt, up 10 yuan/mt from a day ago.
# The aluminium ingot social inventories across China’s eight major markets totalled 936,000 mt as of May 26, down 29,000 mt

Mentha oil

Mentha oil yesterday settled up by 1.32% at 1064.1 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 gained by 5.2 Rupees to end at 1188.8 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -5.04% to settled at 1018 while prices up 13.9 rupees, now Mentha oil is getting support at 1047 and below same could see a test of 1030 levels, and resistance is now likely to be seen at 1074, a move above could see prices testing 1084.

Trading Ideas:
# Mentha oil trading range for the day is 1030-1084.
# In Sambhal spot market, Mentha oil gained  by 5.2 Rupees to end at 1188.8 Rupees per 360 kgs.
# Mentha oil 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 1.06% at 8002 as the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. 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 8382.3 Rupees gained 228.15 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.9% to settled at while prices up 84 rupees, now Turmeric is getting support at 7914 and below same could see a test of 7826 levels, and resistance is now likely to be seen at 8096, a move above could see prices testing 8190.

Trading Ideas:
# Turmeric trading range for the day is 7826-8190.
# Turmeric gains as the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses
# 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 8382.3 Rupees gained 228.15 Rupees.

Jeera

Jeera yesterday settled up by 0.52% at 21460 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 39.9 Rupees to end at 21540.4 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -3.78% to settled at while prices up 110 rupees, now Jeera is getting support at 21340 and below same could see a test of 21225 levels, and resistance is now likely to be seen at 21610, a move above could see prices testing 21765.

Trading Ideas:
# Jeera trading range for the day is 21225-21765.
# 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 39.9 Rupees to end at 21540.4 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -0.84% at 46230 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 -10 Rupees to end at 48850 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.31% to settled at 2938 while prices down -390 rupees, now Cotton is getting support at 45720 and below same could see a test of 45200 levels, and resistance is now likely to be seen at 46820, a move above could see prices testing 47400.

Trading Ideas:
# Cotton trading range for the day is 45200-47400.
# 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 -10 Rupees to end at 48850 Rupees.

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