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Gold
Gold yesterday settled up by 0.48% at 50438 bolstered by a pullback in the U.S. dollar and U.S. Treasury yields, ahead of a potentially aggressive interest rate hike from the Federal Reserve. Benchmark U.S. 10-year Treasury yields also eased from a multi-year peak. U.S. retail sales unexpectedly fell in May as motor vehicle purchases declined amid rampant shortages, and record high gasoline prices pulled spending away from other goods. The first drop in sales in five months reported by the Commerce Department also suggested that high inflation was starting to hurt demand. It followed in the wake of major retailers like Walmart and Target cutting their profit forecasts because of cost pressures. Still, the weak retail sales will not divert the Federal Reserve from its aggressive monetary policy tightening path to bring back inflation back to its 2% target. The U.S. central bank is expected to raise its policy interest rate later on Wednesday for a third time this year, with an increase of 3/4 of a percentage point seen as likely. Hotter-than-expected U.S. inflation data has prompted investors to price in an interest rate increase of 75 basis points (bps) rather than 50 bps by the Fed to tame rising price pressures. However, expectations of aggressive policy tightening have also triggered fears of a possible negative impact on global economic growth. Technically market is under short covering as market has witnessed drop in open interest by -1.47% to settled at 12888 while prices up 243 rupees, now Gold is getting support at 50145 and below same could see a test of 49853 levels, and resistance is now likely to be seen at 50795, a move above could see prices testing 51153.
Trading Ideas:
* Gold trading range for the day is 49853-51153.
* Gold prices rose bolstered by a pullback in the U.S. dollar and U.S. Treasury yields, ahead of a potentially aggressive interest rate hike from Fed.
* U.S. retail sales unexpectedly fell in May as motor vehicle purchases declined
* Goldman Sachs: Revises 3, 6 and 12m gold price targets to $2,100/2,300 and $2,500/toz, from $2,300/2,500 and $2,500/toz

Silver
Silver yesterday settled up by 2.01% at 60697 ahead of a potentially aggressive interest rate hike from the Federal Reserve as it seeks to combat surging inflation. Retail sales in the US unexpectedly fell 0.3% mom in May of 2022, the first decline so far this year and compared to market forecasts of a 0.2% rise. It follows a downwardy revised 0.7% increase in April, as high inflation, gasoline prices and borrowing costs hurt spending on non-essential goods. The NAHB housing market index in the US fell for a 6th straight month to 67 in June of 2022 from 69 in May and below forecasts of 68. It is a fresh low level since June of 2020, as rising mortgage rates and building material costs continue to hurt affordability. The current sales subindex dropped 1 point to 77; buyer traffic fell to 48 from 53; and sales expectations in the next six months declined 2 points to 61. Manufacturers’ and trade inventories in the US rose 1.2 percent from a month earlier in April of 2022, easing from an upwardly revised 2.4 percent gain in the prior month and in line with market expectations. The ECB decided to accelerate the completion of the design of a new anti-fragmentation instrument aimed to prevent unwarranted jumps in euro-area bond yields during an emergency meeting on June 15th 2022. Technically market is under short covering as market has witnessed drop in open interest by -21.6% to settled at 12520 while prices up 1196 rupees, now Silver is getting support at 59938 and below same could see a test of 59179 levels, and resistance is now likely to be seen at 61318, a move above could see prices testing 61939.
Trading Ideas:
* Silver trading range for the day is 59179-61939.
* Silver rose ahead of a potentially aggressive interest rate hike from the Federal Reserve as it seeks to combat surging inflation.
* The NAHB housing market index in the US fell for a 6th straight month to 67 in June of 2022 from 69 in May
* Manufacturers’ and trade inventories in the US rose 1.2 percent from a month earlier in April of 2022

Crude oil
Crude oil yesterday settled down by -2.66% at 9148 as investors reacted to a bearish report from IEA pointing to slowing demand and rising output. Higher oil prices and dimming economic forecasts are set to drag on demand growth, the International Energy Agency said, though the world's thirst for oil is set to reach pre-pandemic levels by 2023. "Economic fears persist, as various international institutions have recently released downbeat outlooks," the Paris-based IEA said in its monthly oil report. "Similarly, tightening central bank policy, the impact of a soaring U.S. dollar and rising interest rates on the purchasing power of emerging economies mean the risks to our outlook are concentrated on the downside." Elsewhere, oil prices faced pressure on reports that US officials are planning to apply a 21% surtax on oil company profits considered excessive, as well as on news that the US Energy Department was selling 45 million barrels of oil from strategic reserves. The American Petroleum Institute (API) reported a build of 736,000 barrels last week, while analysts predicted a draw of 1.2 million barrel. Gasoline stockpiles still fell by 2.2 million barrels last week, suggesting demand from American drivers remained strong despite the record prices. Technically market is under long liquidation as market has witnessed drop in open interest by -44.45% to settled at 3378 while prices down -250 rupees, now Crude oil is getting support at 9042 and below same could see a test of 8935 levels, and resistance is now likely to be seen at 9291, a move above could see prices testing 9433.
Trading Ideas:
* Crude oil trading range for the day is 8935-9433.
* Crude oil dropped as investors reacted to a bearish report from IEA pointing to slowing demand and rising output.
* IEA: Oil demand growth set to be slowed by higher prices and a weaker economic outlook.
* IEA forecasts world oil demand to reach 101.6 mln bpd in 2023, surpassing pre-pandemic levels.

Natural Gas
Nat.Gas yesterday settled up by 3.29% at 592.5 as focus returned to soaring demand amid heat waves, stabilizing after a 17% slide in the last session on expectations that an extended Freeport LNG export hub outage would increase domestic stocks. Goldman Sachs raised its summer Henry Hub prices forecasts to $7.15 per MMBtu from $6.80 previously, reasoning that the higher U.S. stocks due to the Freeport outage would be offset by hotter temperatures and stronger-than-expected power and residential demand. News that the Freeport restart could take 90 days rather than the initial three-week estimate, following an explosion last week, also exacerbated concerns over gas shortages in Europe and pushed up prices in the region. Freeport, the second-biggest U.S. LNG export plant, consumes about 2 billion cubic feet per day (bcfd) of gas, so a 90-day shutdown would result in about 180 billion cubic feet (bcf) more gas being available to the U.S. market. U.S. storage is currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019. Power demand in Texas failed to hit a new all-time high on Monday due to less hot weather, but will likely break peak use records later this week as homes and businesses keep air conditioners cranked up to escape a lingering heatwave. Technically market is under short covering as market has witnessed drop in open interest by -30.8% to settled at 3101 while prices up 18.9 rupees, now Natural gas is getting support at 570.4 and below same could see a test of 548.2 levels, and resistance is now likely to be seen at 608.4, a move above could see prices testing 624.2.
Trading Ideas:
* Natural gas trading range for the day is 548.2-624.2.
* Natural gas rebounded as focus returned to soaring demand amid heat waves
* Goldman Sachs raised its summer Henry Hub prices forecasts to $7.15 per MMBtu from $6.80 previously.
* U.S. storage is currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019.

Copper
Copper yesterday settled up by 0.76% at 755.5 as China's economic performance will improve further in June due to policy support, Fu Linghui, a spokesman at the National Bureau of Statistics, said, adding that policies to stabilise economic growth are gaining traction. The economic recovery is still at the initial stage and main indicators are at low levels, Fu told a press conference. Workers at Chilean state-owned Codelco, the world's largest copper producer, threatened to go on a company-wide strike due to a lack of investment at the mining firm's troubled Ventanas smelter and refinery. China's central bank rolled over maturing medium-term policy loans, while keeping interest rates unchanged for a fifth straight month, matching market expectations. The People's Bank of China (PBOC) said it was keeping the rate on 200 billion yuan ($29.68 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.85% from the previous operation. Thirty of 31 poll respondents had forecast no change in the interest rate on the one-year MLF rate, noting a more hawkish monetary tightening by the U.S. Federal Reserve could limit Beijing's scope for policy manoeuvers. The operation effectively renewed the same amount of such loans due on the same day. Technically market is under short covering as market has witnessed drop in open interest by -7.13% to settled at 3906 while prices up 5.7 rupees, now Copper is getting support at 752.9 and below same could see a test of 750.3 levels, and resistance is now likely to be seen at 759.7, a move above could see prices testing 763.9.
Trading Ideas:
* Copper trading range for the day is 750.3-763.9.
* Copper gains as China's economic performance will improve further in June due to policy support
* Workers at Chilean state-owned Codelco, threatened to go on a company-wide strike.
* China's central bank rolled over maturing medium-term policy loans, while keeping interest rates unchanged for a fifth straight month

Zinc
Zinc yesterday settled up by 2.37% at 317.2 as support seen after China's industrial output rose 0.7% in May from a year earlier, picking up from a 2.9% decline in April, official data showed. China's central bank rolled over maturing medium-term policy loans, while keeping interest rates unchanged for a fifth straight month, matching market expectations. The People's Bank of China (PBOC) said it was keeping the rate on 200 billion yuan ($29.68 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.85% from the previous operation. China’s refined zinc output was 515,200 mt in May, an increase of 19,700 mt or 3.97% MoM and an increase of 4.16% YoY, SMM data showed. From January to May 2022, the combined refined zinc output is estimated to be 2.483 million mt, a decrease of 1.09% year on year. China's refined zinc output in May basically has met expectations. The output increased mainly because a large smelter in Yunnan resumed the production after maintenance. Meanwhile, some smelters in Shaanxi and Sichuan and a smelter in Inner Mongolia raised their operating rates, and some small smelters in Guangxi returned to normal production. China exported more refined zinc than it imported in April for the first time since 2014. Technically market is under short covering as market has witnessed drop in open interest by -0.71% to settled at 1113 while prices up 7.35 rupees, now Zinc is getting support at 314 and below same could see a test of 310.6 levels, and resistance is now likely to be seen at 319.6, a move above could see prices testing 321.8.
Trading Ideas:
* Zinc trading range for the day is 310.6-321.8.
* Zinc gains as support seen after China's industrial output rose 0.7% in May from a year earlier, picking up from a 2.9% decline in April
* China keeps medium – term policy rate unchanged for fifth straight month
* China’s refined zinc output was 515,200 mt in May, an increase of 19,700 mt or 3.97% MoM

Aluminium
Aluminium yesterday settled up by 2.23% at 222.3 supported by dwindling inventories and strong industrial output data from China. Aluminium stocks in LME-registered warehouses were at a 21-year low of 420,675 tonnes, compared with nearly 2 million tonnes in March 2021. Stocks in warehouses monitored by the Shanghai Futures Exchange have dropped more than 20% since the middle of March to 269,583 tonnes. China's production of aluminium rose 3.1% to 3.42 million tonnes in May versus a year earlier, according to data released by the National Bureau of Statistics. For the January-to-May period, China produced 16.4 million tonnes, up 0.3% from the same period last year, the data showed. Production of 10 nonferrous metals – including copper, aluminium, lead, zinc and nickel – rose 3.3% to 5.64 million tonnes from a year earlier. Year-to-date output was up 0.9% at 27.25 million tonnes. China's economic performance will improve further in June due to policy support, Fu Linghui, a spokesman at the National Bureau of Statistics, said on Wednesday, adding that policies to stabilise economic growth are gaining traction. The economic recovery is still at the initial stage and main indicators are at low levels, Fu told a press conference. Technically market is under short covering as market has witnessed drop in open interest by -6.7% to settled at 2964 while prices up 4.85 rupees, now Aluminium is getting support at 219 and below same could see a test of 215.8 levels, and resistance is now likely to be seen at 224.1, a move above could see prices testing 226.
Trading Ideas:
* Aluminium trading range for the day is 215.8-226.
* Aluminium prices rose supported by dwindling inventories and strong industrial output data from China.
* Aluminium stocks in LME-registered warehouses were at a 21-year low of 420,675 tonnes, compared with nearly 2 million tonnes in March 2021.
* China May aluminium output up 3.1% y/y at 3.42 mln T – stats bureau

Mentha oil
Mentha oil yesterday settled down by -0.02% at 1047.9 paring gains on profit booking after prices rose amid low production this season and improving demand post-pandemic. However, upside seen limited as 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 20.3 Rupees to end at 1183 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -8.91% to settled at 736 while prices down -0.2 rupees, now Mentha oil is getting support at 1041.6 and below same could see a test of 1035.4 levels, and resistance is now likely to be seen at 1055.5, a move above could see prices testing 1063.2.
Trading Ideas:
* Mentha oil trading range for the day is 1035.4-1063.2.
* In Sambhal spot market, Mentha oil gained  by 20.3 Rupees to end at 1183 Rupees per 360 kgs.
* Mentha oil gains amid low production this season and improving demand post-pandemic.
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.
* However, downside seen limited amid low production this season and improving demand post-pandemic.

Turmeric
Turmeric yesterday settled up by 0.2% at 8024 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 8204.45 Rupees gained 10.5 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.67% to settled at 16720 while prices up 16 rupees, now Turmeric is getting support at 7976 and below same could see a test of 7928 levels, and resistance is now likely to be seen at 8070, a move above could see prices testing 8116.
Trading Ideas:
* Turmeric trading range for the day is 7928-8116.
* 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 8204.45 Rupees gained 10.5 Rupees.

Jeera
Jeera yesterday settled up by 0.26% at 21340 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 down by -89.7 Rupees to end at 21405.05 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -0.02% to settled at 14337 while prices up 55 rupees, now Jeera is getting support at 21250 and below same could see a test of 21165 levels, and resistance is now likely to be seen at 21410, a move above could see prices testing 21485.
Trading Ideas:
* Jeera trading range for the day is 21165-21485.
* 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 down by -89.7 Rupees to end at 21405.05 Rupees per 100 kg.

Cotton
Cotton yesterday settled down by -0.19% at 46820 after USDA for 2022/23 raised its global production estimates. The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections compared with the previous month, and ending stocks are virtually unchanged. Global consumption is 450,000 bales lower, with the largest declines in Mexico, Bangladesh, and Vietnam. Beginning stocks for 2022/23 are also lower this month as a 1.5-million-bale decline in 2021/22 global production more than offsets a 1.25-million-bale decline in projected consumption. A 1.0- million-bale drop in India’s crop accounts for most of the production change, with lower yield expectations in Brazil accounting for the remainder. Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam. There were reports of 18 per cent less area under cotton sown than last year in Punjab. Despite the Punjab government setting a target to have 4 lakh hectares under cotton to reduce land under paddy, the state has witnessed an 18 per cent decrease from last year, when about 3.03 lakh hectares of the then targeted 3.25 lakh hectares were under cotton. Till now, cotton was sown on only 2.48 lakh hectares of land; the cotton sowing is almost over. In spot market, Cotton dropped by -80 Rupees to end at 47660 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.09% to settled at 2358 while prices down -90 rupees, now Cotton is getting support at 46600 and below same could see a test of 46390 levels, and resistance is now likely to be seen at 47020, a move above could see prices testing 47230.
Trading Ideas:
* Cotton trading range for the day is 46390-47230.
* Cotton dropped after USDA for 2022/23 raised its global production estimates.
* The 2022/23 world cotton balance sheet includes slightly higher production and slightly lower consumption projections
* Consumption is projected 500,000 bales lower in both China and India, with smaller declines for Mexico and Vietnam.
* In spot market, Cotton dropped  by -80 Rupees to end at 47660 Rupees.

- www.kediaadvisory.com

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