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Gold

Gold yesterday settled up by 0.09% at 51094 as the dollar resumed its slide and yields on government bonds retreated from their 2022 highs amid bets that the Federal Reserve might slow the pace of interest-rate hikes. 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 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 4.11% to settled at 13564 while prices up 44 rupees, now Gold is getting support at 51009 and below same could see a test of 50923 levels, and resistance is now likely to be seen at 51213, a move above could see prices testing 51331.

Trading Ideas:
# Gold trading range for the day is 50923-51331.
# Gold prices inched higher as the dollar resumed its slide and yields on government bonds retreated from their 2022 highs.
# U.S. consumer spending rose more than expected in April as households boosted purchases of goods and services
# India’s dealers were offering a discount of up to $5 an ounce over official domestic prices, down from the last week's discount of $2.

Silver

Silver yesterday settled down by -0.38% at 61882 amid bets of aggressive tightening by the Federal Reserve. The US Central Bank has raised its benchmark policy rate by half a percentage point for the first time since 2000 in early May while signaling it intended to increase it by the same amount at the next two meetings. The EU failed to agree on an embargo of Russian oil over Moscow's invasion of Ukraine. Beijing announced a partial reopening of some libraries, museums and gyms and resumed most of public transport in the main business area and ended work-from-home rules in some districts. Shanghai, which was under a strict lockdown for nearly two months, would lift some of the curbs on businesses from Wednesday and offered more help for firms that includes reducing some taxes for car buyers, delaying insurance and rent payments, as well as subsidies for utility charges. Germany's consumer price inflation rate is expected to climb to 7.9 percent in May of 2022 from 7.4 percent in April, the highest since the winter of 1973/1974 and above market expectations of 7.6 percent, a preliminary estimate showed. Technically market is under fresh selling as market has witnessed gain in open interest by 9.36% to settled at 13486 while prices down -234 rupees, now Silver is getting support at 61533 and below same could see a test of 61184 levels, and resistance is now likely to be seen at 62408, a move above could see prices testing 62934.

Trading Ideas:
# Silver trading range for the day is 61184-62934.
# Silver dropped amid bets of aggressive tightening by the Federal Reserve.
# The EU failed to agree on an embargo of Russian oil over Moscow's invasion of Ukraine.
# The Fed is set to start shrinking its $8.9 trillion balance sheet starting Wednesday.

Crude oil

Crude oil yesterday settled up by 2.06% at 9080 as traders waited to see whether the European Union would reach an agreement on banning Russian oil imports. The EU is due to meet on Monday and Tuesday to discuss a sixth package of sanctions against Russia for its invasion of Ukraine, actions which Moscow calls a "special military operation". Underscoring market tightness, the Organization of the Petroleum Exporting Countries and allies including Russia, a group dubbed OPEC+, are set to rebuff Western calls to speed up increases in output when they meet on Thursday. They will stick to existing plans to raise their July output target by 432,000 barrels per day. Russia raised oil production slightly to 10.17 million barrels per day (bpd) between May 1 and 29, TASS news agency reported, still leaving output nearly 1 million bpd below levels before the West imposed sanctions on Moscow. Production from the world's third biggest producer after the United States and Saudi Arabia dropped by about 10% to 10.05 million bpd in April from February, after some buyers postponed or refused Russian barrels due to sanctions. TASS, said output had been slightly restored to 10.17 million bpd on May 1-29. Technically market is under fresh buying as market has witnessed gain in open interest by 9.13% to settled at 11055 while prices up 183 rupees, now Crude oil is getting support at 8987 and below same could see a test of 8894 levels, and resistance is now likely to be seen at 9131, a move above could see prices testing 9182.

Trading Ideas:
# Crude oil trading range for the day is 8894-9182.
# Crude oil prices climbed as traders waited to see whether the European Union would reach an agreement on banning Russian oil imports.
# U.S. driving season kicks off amid supply concerns
# OPEC+ expected to stick to supply release plan.

Nat.Gas

Nat.Gas yesterday settled up by 1.24% at 678.8 on a reduction in daily output and an increase in fuel flowing to liquefied natural gas (LNG) export plants. Power companies burned more gas to generate electricity due to a lack of wind in recent weeks. 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 fresh buying as market has witnessed gain in open interest by 0.62% to settled at 5874 while prices up 8.3 rupees, now Natural gas is getting support at 669.6 and below same could see a test of 660.5 levels, and resistance is now likely to be seen at 690.2, a move above could see prices testing 701.7.

Trading Ideas:
# Natural gas trading range for the day is 660.5-701.7.
# Natural gas gained on a reduction in daily output and an increase in fuel flowing to liquefied natural gas (LNG) export plants.
# 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 0.53% at 781.05 as a dip in the U.S. dollar, and China's stimulus measures and a decision to ease COVID-19 restrictions lifted sentiment across markets. The People's Bank of China ramping up policy support and companies no longer needing to be on a 'whitelist' to resume production from June 1 is getting viewed as a big step toward the light at the end of the lockdown tunnel. Shanghai authorities will cancel many conditions for businesses to resume work from Wednesday, a city official said, easing a city-wide lockdown that began some two months ago, and will also introduce policies to support its battered economy. Inventories of copper in LME-registered warehouses fell by 6,250 tonnes to 156,175 tonnes on Friday. Inventories in warehouses monitored by the Shanghai Futures Exchange fell 23.7% from last Friday. 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. Freeport Indonesia aims for copper concentrate output of 3.02 million tonnes in 2022 vs 2.83 million tonnes in 2021. Copper metal output in 2022 targeted at 1.6 million lbs, a 20.1% increase compared to 1.34 million lbs a year earlier. Technically market is under fresh buying as market has witnessed gain in open interest by 0.19% to settled at 3706 while prices up 4.15 rupees, now Copper is getting support at 777.5 and below same could see a test of 774 levels, and resistance is now likely to be seen at 784, a move above could see prices testing 787.

Trading Ideas:
# Copper trading range for the day is 774-787.
# Copper extended gains as China's stimulus measures and a decision to ease COVID-19 restrictions lifted sentiment across markets.
# PBOC ramping up policy support and companies no longer needing to be on a 'whitelist' to resume production from June 1
# Inventories in warehouses monitored by the Shanghai Futures Exchange fell 23.7% from last Friday.

Zinc

Zinc yesterday settled up by 0.74% at 332.85 as is stated that Shanghai would fully resume work and production on June 1, boosting the market sentiment with optimistic prospect on the demand side. Shanghai authorities said they will lift the city's lockdown from midnight on Wednesday, allowing private cars back on to the roads and people to freely move in and out of low-risk housing compounds. On the supply side, several domestic smelters were forced to suspend the production for lack of ores, indicating sustaining supply tightness. On the consumption side, market sentiment was boosted by stimulus packages that target water conservation, transportation and infrastructure. According to the latest customs data, China imported 1,500 mt of refined zinc in April, down 92.8% on the month and 96.23% on the year. The total imports of refined zinc stood at 43,400 mt from January to April in 2022, a year-on-year decrease of 75.09%. In terms of the fundamentals, the supply issues have not been solved yet in the overseas market. Smelting costs remained high with high electricity prices in Europe. But the zinc prices hovered at a low level, and smelters in Europe suffered losses, bringing difficulties to the resumption of production at smelters, while the supply side was still in shortage. Technically market is under fresh buying as market has witnessed gain in open interest by 5.36% to settled at 1317 while prices up 2.45 rupees, now Zinc is getting support at 330.2 and below same could see a test of 327.4 levels, and resistance is now likely to be seen at 336.7, a move above could see prices testing 340.4.

Trading Ideas:
# Zinc trading range for the day is 327.4-340.4.
# Zinc rose as is stated that Shanghai would fully resume work and production on June 1, boosting the market sentiment with optimistic prospect on the demand side
# Shanghai city says it will lift lockdown restrictions on June 1
# Several domestic smelters were forced to suspend the production for lack of ores, indicating sustaining supply tightness.

Aluminium

Aluminium yesterday settled up by 0.58% at 242.95 as domestic aluminium social inventory totalled 923,000 mt, down 14,000 mt from last Thursday. China's financial hub of Shanghai will fully implement economic policies, and make every effort to accelerate the economic recovery, the city's party secretary Li Qiang said. "It is necessary to speed up work resumption without relaxing efforts to normalize epidemic prevention measures," Li said, adding the city has passed the test under extreme conditions, and has completed the "arduous" task. Euro zone economic sentiment barely changed in May as slightly greater optimism in services and among consumers offset an ebbing of confidence in industry, data showed. The European Commission's monthly survey showed economic sentiment in the 19 countries sharing the euro inched higher to 105.0 in May from 104.9 in April. Sentiment in industry fell to 6.3 points from 7.7 in April, but optimism in services, the economy's biggest sector, rose to 14.0 from 13.6 in April. Consumer confidence improved to -21.1 from -22.0. Consumer inflation expectations, which reached an all-time high in March, continued to decline, slipping to 45.6 in May from 50.0 in April and were also lower among manufacturers at 56.1, down from a record high of 60.0 in April. Technically market is under fresh buying as market has witnessed gain in open interest by 0.23% to settled at 2589 while prices up 1.4 rupees, now Aluminium is getting support at 241.3 and below same could see a test of 239.7 levels, and resistance is now likely to be seen at 244.9, a move above could see prices testing 246.9.

Trading Ideas:
# Aluminium trading range for the day is 239.7-246.9.
# Aluminium prices gained as domestic aluminium social inventory totalled 923,000 mt, down 14,000 mt from last Thursday.
# Shanghai city will make every effort to accelerate economic recovery
# Euro zone sentiment barely changed in May, inflation expectations ease.

Mentha oil

Mentha oil yesterday settled down by -0.21% at 1061.9 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 -14.4 Rupees to end at 1174.4 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.1% to settled at 1017 while prices down -2.2 rupees, now Mentha oil is getting support at 1055.7 and below same could see a test of 1049.4 levels, and resistance is now likely to be seen at 1070.6, a move above could see prices testing 1079.2.

Trading Ideas:
# Mentha oil trading range for the day is 1049.4-1079.2.
# In Sambhal spot market, Mentha oil dropped  by -14.4 Rupees to end at 1174.4 Rupees per 360 kgs.
# Mentha oil prices 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 0.12% at 8012 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 -1.05% to settled at while prices up 10 rupees, now Turmeric is getting support at 7940 and below same could see a test of 7868 levels, and resistance is now likely to be seen at 8076, a move above could see prices testing 8140.

Trading Ideas:
# Turmeric trading range for the day is 7868-8140.
# Turmeric recovered from lows to end with gains as the arrivals of New season turmeric are diminishing and exports demand is improving.
# 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 down by -0.23% at 21410 as the selling of cumin by the farmers increases after the onset of monsoon. Due to this, there is a perception that the arrival of cumin seeds will increase after the onset of monsoon. The demand for cumin seed for exports have improve after easing of supply chain disruption due to covid restrictions in China. Traders expect jeera production in 2021/22 sharply lower at 5.0-6.0 mln bags (1 bag = 55 kg) from 8.0-8.5 mln bags the previous year. As per govt data, jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes compared to 18300 tonnes while exports for FY 2021/22 (Apr-Feb) period is also down by 23% Y/Y at 2.02 lt compared to 2.62 lt last year. The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags. Considering the present arrivals, the production of cumin will be the same as the earlier estimate. So far 15 to 15.50 lakh bags have arrived in Rajasthan. 50% of the total cumin crop has arrived and 50% of cumin seeds are yet to arrive. Production of 15 lakh bags of cumin is estimated in Gujarat and 12 to 13 lakh tonnes of old carry forward stock is estimated. In Unjha, a key spot market in Gujarat, jeera edged up by 87.9 Rupees to end at 21628.3 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -3.43% to settled at while prices down -50 rupees, now Jeera is getting support at 21295 and below same could see a test of 21185 levels, and resistance is now likely to be seen at 21565, a move above could see prices testing 21725.

Trading Ideas:
# Jeera trading range for the day is 21185-21725.
# Jeera dropped as jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes
# The selling of cumin by the farmers increases after the onset of monsoon.
# The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags.
# In Unjha, a key spot market in Gujarat, jeera edged up by 87.9 Rupees to end at 21628.3 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -1.15% at 45700 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 -880 Rupees to end at 47970 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.51% to settled at 2923 while prices down -530 rupees, now Cotton is getting support at 44960 and below same could see a test of 44220 levels, and resistance is now likely to be seen at 46820, a move above could see prices testing 47940.

Trading Ideas:
# Cotton trading range for the day is 44220-47940.
# 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 -880 Rupees to end at 47970 Rupees.

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