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Gold

Gold yesterday settled down by -0.61% at 50594 weighed down by a stronger dollar and remarks from U.S. Federal Reserve Chair Jerome Powell about the central bank's commitment to tame price pressures. Powell noted that the Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn. Manufacturing growth is slowing worldwide as China's COVID-19 curbs and Russia's invasion of Ukraine disrupt supply chains and keep inflation at the highest in years, while the growing risk of a U.S. recession poses a new threat to the global economy. Gauges of factory activity in Japan, Britain, the euro zone and United States all softened in June, with U.S. producers reporting the first outright drop in new orders in two years in the face of slumping consumer and business confidence. The number of Americans filing new claims for unemployment benefits edged down last week as labor market conditions remained tight, though a slowdown is emerging. Despite the second straight weekly decline reported by the Labor Department, claims are hovering near a five-month high. Job cuts have been reported in the technology and housing sectors amid fears of a recession as the Federal Reserve aggressively tightens monetary policy to fight inflation. Technically market is under long liquidation as market has witnessed drop in open interest by -2.72% to settled at 12110 while prices down -310 rupees, now Gold is getting support at 50416 and below same could see a test of 50238 levels, and resistance is now likely to be seen at 50916, a move above could see prices testing 51238.

Trading Ideas:
* Gold trading range for the day is 50238-51238.
* Gold prices dropped weighed down by a stronger dollar and remarks from Fed Chair Powell about the central bank's commitment to tame price pressures.
* Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn.
* The number of Americans filing new claims for unemployment benefits edged down last week as labor market conditions remained tight

Silver

Silver yesterday settled down by -1.89% at 59504 as the U.S. dollar edged higher on safe-haven demand as recession worries mounted. The Federal Reserve is "strongly committed" to bringing down inflation that is running at a 40-year high and policymakers are acting "expeditiously to do so," U.S. central bank chief Jerome Powell said. "It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all," Powell said at a hearing before the U.S. Senate Banking Committee, adding that the central bank in coming months will be looking for "compelling evidence" of easing price pressures. Inflation continues to run well above the Fed's targeted level of 2%. The Fed raised its benchmark overnight interest rate by three-quarters of a percentage point – its biggest hike since 1994 – to a range of 1.50% to 1.75%, and signaled rates would rise another 1.75 percentage points this year. Britain's jobless rate rose for the first time in nearly a year, but there were signs of more people returning to the job market, where employers' struggle to fill vacancies has added to the Bank of England's inflation headache. Money markets are pricing in a 75-basis point interest rate hike in July and a half-point move in September. Technically market is under long liquidation as market has witnessed drop in open interest by -3.17% to settled at 9477 while prices down -1144 rupees, now Silver is getting support at 59092 and below same could see a test of 58681 levels, and resistance is now likely to be seen at 60266, a move above could see prices testing 61029.

Trading Ideas:
* Silver trading range for the day is 58681-61029.
* Silver dropped as the U.S. dollar edged higher on safe-haven demand as recession worries mounted.
* Fed 'strongly committed' to bring down inflation 'expeditiously,' Powell says
* UK jobless rate edges up as people return to labour market

Crude oil

Crude oil yesterday settled down by -1.54% at 8222 as investors worried that aggressive U.S. interest rate hikes could trigger a recession and dent fuel demand. Investors are continuing to assess how worried they need to be about central banks potentially pushing the world economy into recession as they attempt to curb inflation with interest rate increases. U.S. President Joe Biden, meanwhile, called on Congress to pass a three-month suspension of the federal gasoline tax to help combat record pump prices and provide temporary relief for American families this summer. U.S. crude and gasoline inventories rose last week, while distillate stockpiles fell. Crude stocks rose by about 5.6 million barrels for the week ended June 17. Gasoline inventories rose by 1.2 million barrels, while distillate stocks fell by about 1.7 million barrels. Saudi Arabia's April crude exports rose to a two-year peak of 7.382 million barrels per day (bpd) in April, data from the Joint Organizations Data Initiative (JODI) showed. Crude exports in April rose about 2% from about 7.235 million bpd reported for March. U.S. crude oil refining capacity fell by 125,790 barrels per day (bpd), or seven-tenths of 1%, in 2021 because of the closure of a Louisiana refinery, the U.S. Energy Information Administration said. Technically market is under long liquidation as market has witnessed drop in open interest by -4.04% to settled at 3942 while prices down -129 rupees, now Crude oil is getting support at 8077 and below same could see a test of 7931 levels, and resistance is now likely to be seen at 8376, a move above could see prices testing 8529.

Trading Ideas:
* Crude oil trading range for the day is 7931-8529.
* Crude oil prices dropped as investors worried that aggressive U.S. interest rate hikes could trigger a recession and dent fuel demand.
* API shows crude, gasoline stocks rise; distillate stocks fall
* Saudi Arabia's April crude oil exports hit two – year high

Natural Gas

Nat.Gas yesterday settled down by -8.08% at 494.8 on a bigger-than-expected storage build, as the extended shutdown of the Freeport liquefied natural gas (LNG) export plant in Texas allows utilities to quickly rebuild low gas stockpiles. Even though the storage build was bigger than expected, it was still smaller than usual for this time of year as extreme heat in several parts of the country last week boosted the amount of gas power generators burned to keep air conditioners humming. The U.S. Energy Information Administration (EIA) said utilities added 74 billion cubic feet (bcf) of gas to storage during the week ended June 17. The recent explosion at one of the biggest US liquefied natural gas export terminals in Texas is keeping an additional 2 bcf a day of natural gas in the US market despite soaring international demand, easing pressure from domestic prices. Freeport LNG said it doesn't expect the terminal to return to full operations until late 2022, with partial production resuming perhaps in three months. Still, the contract has gained 70% since the start of the year on strong overseas demand, even more so since Europe has been trying to wean off Russian supplies, following the invasion of Ukraine. Technically market is under long liquidation as market has witnessed drop in open interest by -13.21% to settled at 2464 while prices down -43.5 rupees, now Natural gas is getting support at 472.9 and below same could see a test of 451.1 levels, and resistance is now likely to be seen at 526.2, a move above could see prices testing 557.7.

Trading Ideas:
* Natural gas trading range for the day is 451.1-557.7.
* Natural gas eased on forecasts for less demand and a drop in liquefied natural gas (LNG) exports with the Texas Freeport plant shut down.
* That price decline came despite record power demand in Texas and a slow slide in daily gas output.
* On a daily basis, output was on track to drop to 10.3 bcfd on Wednesday, the lowest since November 2021

Copper

Copper yesterday settled down by -4.29% at 698.25 as fast-rising interest rates and weak economic data fanned fears of a global slowdown that would reduce demand for metals. Central banks are raising interest rates sharply to rein in soaring inflation, which in turn will restrain economic growth. U.S. Federal Reserve chair Jerome Powell said he is committed to bringing inflation under control even at the risk of an economic downturn. Manufacturing growth is slowing from Asia to Europe while the growing risk of a recession in the United States poses a new threat to the global economy. The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in April was 2.155 million tonnes while consumption was 2.152 million tonnes, the ICSG said. Chile's state-owned Codelco, is operational and has taken measures to continue operations despite a national strike by workers that started, according Chile's finance minister. Chile's Finance Minister Mario Marcel told a news conference that work at Codelco has continued despite the strike. Marcel also announced a $583 million reinvestment plan for Codelco in 2022 that includes 30% designated to 2021 utilities. There will be a similar reinvestment of utilities from 2021 through 2024. Technically market is under fresh selling as market has witnessed gain in open interest by 52.57% to settled at 5323 while prices down -31.3 rupees, now Copper is getting support at 688.9 and below same could see a test of 679.4 levels, and resistance is now likely to be seen at 716.1, a move above could see prices testing 733.8.

Trading Ideas:
* Copper trading range for the day is 679.4-733.8.
* Copper prices fell as fast-rising interest rates and weak economic data fanned fears of a global slowdown that would reduce demand for metals.
* The world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March
* Citi forecasts copper prices at $8,500/t on a 3-month view

Zinc

Zinc yesterday settled down by -2.09% at 307 due to a slowdown in top metals consumer China and fears of a global recession eroding demand. Available zinc inventories in LME-registered warehouses have shrunk by two thirds this week to the lowest in at least 24 years. In a sign of tight supply, the premium for quickly delivered cash zinc over the three-month contract shot to a three-year high of $160 a tonne. LME zinc inventories have been eroding this year, evidence of supply problems in Europe and the United States as smelters reduce output, a contrast to the more plentiful picture in China. The situation became more serious this week after owners of 35,000 tonnes of zinc inventories in LME warehouses gave notice they want to withdraw the material, slashing available stocks by 56% to 26,325 tonnes. Zinc inventories in Shanghai Futures Exchange warehouses have more than doubled this year to 159,672 tonnes. China exported more refined zinc than it imported in April for the first time since 2014. The country's imports collapsed over the first four months of this year with exports rising despite a 15% tariff on outbound shipments. The sharp shift in the country's trade dynamics speaks to the disconnect between east and west in the global zinc supply chain. Technically market is under fresh selling as market has witnessed gain in open interest by 64.46% to settled at 1314 while prices down -6.55 rupees, now Zinc is getting support at 303.7 and below same could see a test of 300.4 levels, and resistance is now likely to be seen at 311.9, a move above could see prices testing 316.8.

Trading Ideas:
* Zinc trading range for the day is 300.4-316.8.
* Zinc prices dropped due to a slowdown in top metals consumer China and fears of a global recession eroding demand
* Available zinc inventories in LME-registered warehouses have shrunk by two thirds this week to the lowest in at least 24 years.
* Zinc inventories in Shanghai Futures Exchange warehouses have more than doubled this year to 159,672 tonnes.

Aluminium

Aluminium yesterday settled down by -2.98% at 209.8 as market players were increasingly worried about a potential economic recession after Federal Reserve Chairman Jerome Powell delivered a more hawkish speech. On the macro front, Federal Reserve Chairman Jerome Powell delivered a more hawkish sound, and market fears of a U.S. recession are also creeping up. Powell said the U.S. economy would be "extremely challenging" to achieve a "soft landing" and that a recession could occur as interest rates are raised to combat inflation. With the progress of resumption of work and production, the operating rate of aluminum processing enterprises has recovered month-on-month, but overseas demand is facing downward pressure. In terms of inventory, the social inventory of aluminum ingots at home and abroad is at a low level, and domestic aluminum ingots are maintained to be destocked. The supply has been rising steadily, while the demand side was weaker than the same period last year despite some recovery. In addition, the downstream operating rates were further influenced by the recent high temperature. It is expected that aluminium prices will still carry downward potential in the near term with tightening macro environment and rising supply. Technically market is under fresh selling as market has witnessed gain in open interest by 44.44% to settled at 2909 while prices down -6.45 rupees, now Aluminium is getting support at 207.5 and below same could see a test of 205.2 levels, and resistance is now likely to be seen at 214, a move above could see prices testing 218.2.

Trading Ideas:
* Aluminium trading range for the day is 205.2-218.2.
* Aluminium dropped as market players were increasingly worried about a potential economic recession
* With the progress of resumption of work and production, the operating rate of aluminum processing enterprises has recovered month-on-month
* The supply has been rising steadily, while the demand side was weaker than the same period last year despite some recovery.

Mentha oil

Mentha oil yesterday settled up by 0.38% at 1045.9 amid low production this season and improving demand post-pandemic. Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. 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. 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 we forecast 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. 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. In Sambhal spot market, Mentha oil gained by 21 Rupees to end at 1171.6 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 8.95% to settled at 1059 while prices up 4 rupees, now Mentha oil is getting support at 1038.7 and below same could see a test of 1031.5 levels, and resistance is now likely to be seen at 1051.4, a move above could see prices testing 1056.9.

Trading Ideas:
* Mentha oil trading range for the day is 1031.5-1056.9.
* In Sambhal spot market, Mentha oil gained  by 21 Rupees to end at 1171.6 Rupees per 360 kgs.
* Mentha oil gained amid low production this season and improving demand post-pandemic.
* Synthetic Mentha supply remains uninterrupted
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.

Turmeric

Turmeric yesterday settled up by 0.2% at 7864 amid improving buying by bulk traders amid good domestic demand is supported prices. However, reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes while for the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average. As per market feedback, all-India Turmeric production is likely to fall by 15% on year to 4.50 lakh tonnes in the marketing year 2022-23 (February-January) over the previous year due to unseasonal rains reported during growth stage of Turmeric in key producing states. 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 2022-23 marketing year (Feb-Jan), total arrivals reported are up by 35.87% to around 314,902 tonne from 231,771 tonne reported same period last year. In Nizamabad, a major spot market in AP, the price ended at 8132.8 Rupees dropped -9.3 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.13% to settled at 15800 while prices up 16 rupees, now Turmeric is getting support at 7806 and below same could see a test of 7748 levels, and resistance is now likely to be seen at 7900, a move above could see prices testing 7936.

Trading Ideas:
* Turmeric trading range for the day is 7748-7936.
* Turmeric gains amid improving buying by bulk traders amid good domestic demand is supported prices.
* However, reports of sufficient stocks and good sowing progress in south India limited the upside.
* Turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes
* In Nizamabad, a major spot market in AP, the price ended at 8132.8 Rupees dropped -9.3 Rupees.

Jeera

Jeera yesterday settled up by 1.64% at 21090 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021. 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. In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year. The arrival of cumin in Rajasthan has been only 50% in the peak season in the current year as compared to the previous years as the crop was less. There was a drought in Turkey and Syria and due to state tensions, the sowing of cumin seeds has been reported to be very low. Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan. In Unjha, a key spot market in Gujarat, jeera edged up by 53.45 Rupees to end at 21289.1 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -5.06% to settled at 12723 while prices up 340 rupees, now Jeera is getting support at 20790 and below same could see a test of 20485 levels, and resistance is now likely to be seen at 21270, a move above could see prices testing 21445.

Trading Ideas:
* Jeera trading range for the day is 20485-21445.
* Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
* In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year.
* Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan.
* In Unjha, a key spot market in Gujarat, jeera edged up by 53.45 Rupees to end at 21289.1 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -1.86% at 41720 as sowing of cotton has picked up in the country amid an advancing monsoon, and rainfall over the next fortnight will be crucial. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. Kharif cotton sowing for the season in Gujarat is likely to increase by at least 15% compared to the previous season amid a rush to sow the crop well ahead of its schedule. Farmers had got good prices for cotton in domestic and international markets last season. Indian Meteorological Department (IMD) in its forecast for next five days has said gradual maximum temperature is likely to rise by 2-4 degree centigrade over most parts of northwest India and Madhya Pradesh. Between June 27 and 29, scattered to fairly widespread rainfall is likely over peninsular India and east India, while there could be an increase in rainfall over northwest and central India, it said. The Cotton Association of India (CAI), is bullish about the sowing prospects this kharif season. “Sowing will increase by 12 per cent and go up to 133-135 lakh hectares from last year’s 120 lakh,” said Atul Ganatra, President, CAI. Ganatra further said the increase in acreage expansion will be the highest in Gujarat, the largest producer of the fibre, at around 20-25 per cent. In spot market, Cotton dropped by -810 Rupees to end at 46380 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 28.41% to settled at 1252 while prices down -790 rupees, now Cotton is getting support at 40530 and below same could see a test of 39340 levels, and resistance is now likely to be seen at 42530, a move above could see prices testing 43340.

Trading Ideas:
* Cotton trading range for the day is 39340-43340.
* Cotton prices dropped as sowing of cotton has picked up in the country amid an advancing monsoon
* There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns.
* Kharif cotton sowing for the season in Gujarat is likely to increase by at least 15% compared to the previous season
* In spot market, Cotton dropped  by -810 Rupees to end at 46380 Rupees.

-www.kediaadvisory.com

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