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Gold

Gold yesterday settled up by 0.75% at 50248 as investors wrestled with the twin shocks of an aggressive tightening and escalating tensions between the West and Russia. The headline CPI in the US held close to a 40-year high at 8.3% in April, while the core CPI also came in above expectations at 6.2%, stoking worries that elevated prices may persist. The US central bank raised its benchmark overnight rate by 50 basis points in the first week of May and markets are pricing in equivalent hikes at each of the next two Fed meetings in June and July. Markets are priced for at least a half percentage point rate increase at each of the next two Fed meetings in June and July, according to the CME FedWatch Tool. China has been dealing with a resurgence of COVID-19 infections in some of the major cities. Unfortunately, this has hit physical demand as local stores closed. In general, as well as the gold price has been dealing with a rise in yields. The WGC reported that Chinese gold ETF holdings totaled 58.5t (US$3.5bn) at the end of April, following a 3.3t (US$323mn) outflow in the month. This could have been due to possible profit-taking activities as the local gold price rose. Technically market is under short covering as market has witnessed drop in open interest by -7.97% to settled at 6503 while prices up 375 rupees, now Gold is getting support at 49781 and below same could see a test of 49314 levels, and resistance is now likely to be seen at 50506, a move above could see prices testing 50764.
Trading Ideas:
Gold trading range for the day is 49314-50764.
Gold prices remained supported as investors wrestled with the twin shocks of an aggressive tightening and escalating tensions between the West and Russia.
The headline CPI in the US held close to a 40-year high at 8.3% in April, while the core CPI also came at 6.2%,
Markets are priced for at least a half percentage point rate increase at each of the next two Fed meetings in June and July

Silver

Silver yesterday settled up by 2.69% at 60926 tracking firmness in base metals and crude oil prices, after prices dropped earlier as the dollar held near a fresh 20-year high and Treasury yields were on the rise amid prospects of a series of sharp interest rate hikes by the Federal Reserve to combat soaring inflation. Powell said in an interview that the battle to control inflation would "include some pain" and the U.S. central bank would manage to tighten borrowing costs without going so far as to tip the economy into recession. U.S. import prices were unexpectedly flat in April as a decline in the cost of petroleum offset gains in food and other products, a further sign that inflation has probably peaked, though it will remain elevated. The unchanged reading in import prices followed a 2.9% surge in March, the Labor Department said. In the 12 months through April, import prices rose 12.0% after accelerating 13.0% in the year through March. The U.S. economic outlook has weakened and inflation is set to remain higher than previously expected for a while yet, a Federal Reserve Bank of Philadelphia survey of professional economic forecasters showed. Real GDP is forecast to grow at a 2.3% annual rate this quarter, down 1.9 percentage points from the last survey three months ago, with the annual rate seen falling to 2.3% next year and 2.0% in 2024, both lower than the previous estimate. Technically market is under short covering as market has witnessed drop in open interest by -11.08% to settled at 15104 while prices up 1594 rupees, now Silver is getting support at 59817 and below same could see a test of 58709 levels, and resistance is now likely to be seen at 61516, a move above could see prices testing 62107.
Trading Ideas:
Silver trading range for the day is 58709-62107.
Silver gained on short covering tracking firmness in base metals and crude oil prices, after prices dropped earlier as the dollar held near a fresh 20-year high
U.S. import prices were unexpectedly flat in April as a decline in the cost of petroleum offset gains in food and other products
The U.S. economic outlook has weakened and inflation is set to remain higher than previously expected for a while yet

Crude oil

Crude oil yesterday settled up by 4.25% at 8873 as the European Union stepped closer to an import ban on Russian crude, though widespread lockdowns in China and weak Chinese economic data fuelled fears of a global recession. U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped by a record 7.0 million barrels last week to 543.0 million barrels, its lowest since May 2001, the U.S. Energy Information Administration (EIA) said. The agency also said U.S. distillate stockpiles fell last week to 104.0 million barrels, their lowest since May 2005, with East Coast distillate inventories dropping to a record low of 21.3 million barrels, according to data going back to 1990. Iraq aims to increase its oil production to 6 million barrels per day by the end of 2027, its oil minister said at an industry event. Iraq, one of the world's largest oil producers and a member of OPEC, has suffered as "the wrong market environment" discouraged investment in oil and gas, Ihsan Abdul-Jabbar said. Russian oil and gas condensate average output has increased by around 1.7% month on month to 1.4 million tonnes per day (10.25 million barrels per day) in the first half of May, Interfax news agency reported. Technically market is under short covering as market has witnessed drop in open interest by -3.81% to settled at 7571 while prices up 362 rupees, now Crude oil is getting support at 8540 and below same could see a test of 8207 levels, and resistance is now likely to be seen at 9060, a move above could see prices testing 9247.
Trading Ideas:
Crude oil trading range for the day is 8207-9247.
Crude oil gains as the European Union stepped closer to an import ban on Russian crude
U.S. crude in strategic reserve falls by record to lowest since May 2001, EIA says
Iraq aims to hike oil output to 6 mln bpd by end of 2027, minister says

Nat.Gas

Nat.Gas yesterday settled up by 3.26% at 611.9 as higher European prices keep U.S. liquefied natural gas (LNG) exports strong even though Europe has more gas in storage compared with normal than the United States. Also supporting U.S. prices, power demand in Texas was expected to soar to a monthly record as homes and businesses crank up their air conditioners to escape another spring heat wave. U.S. gas speculators, however, cut their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row last week to the lowest since June 2020 as recent interest rate rises cause investors to exit risky assets like commodities, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.9 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. Refinitiv projected average U.S. gas demand, including exports, would slide from 89.2 bcfd this week to 88.4 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. Technically market is under short covering as market has witnessed drop in open interest by -2.29% to settled at 4005 while prices up 19.3 rupees, now Natural gas is getting support at 593.9 and below same could see a test of 576 levels, and resistance is now likely to be seen at 632.9, a move above could see prices testing 654.
Trading Ideas:
Natural gas trading range for the day is 576-654.
Natural gas jumped as higher European prices keep U.S. liquefied natural gas (LNG) exports strong
Also supporting U.S. prices, power demand in Texas was expected to soar to a monthly record
U.S. gas speculators, cut their net long futures and options positions for a fourth week in a row last week


Copper

Copper yesterday settled up by 0.94% at 760.05 as hopes of a revival in demand grew after China eased COVID-19 restrictions and cut mortgage loan interest rates further for some home buyers to prop up its property market. Shanghai will gradually begin reopening businesses such as shopping malls and hair salons from Monday after weeks in strict COVID lockdown, while Beijing battles a small but stubborn outbreak. Chinese financial authorities allowed a further cut in mortgage loan interest rates for some home buyers, in another push to prop up its property market and revive a flagging engine of the world's second-largest economy. China's industrial output fell 2.9% in April from a year earlier, down sharply from a 5.0% increase in March, data from the National Bureau of Statistics showed. Retail sales in April shrank 11.1% year-on-year. China's central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a fourth straight month, matching market expectations. The LME proposed measures that it said would improve transparency and stability in the over-the-counter metals market, including more frequent disclosures of all positions. A constitutional assembly in the world's top copper producing nation rejected a major overhaul to mining rights, including expanding Chilean state ownership. Technically market is under short covering as market has witnessed drop in open interest by -2.93% to settled at 3681 while prices up 7.1 rupees, now Copper is getting support at 753.1 and below same could see a test of 746 levels, and resistance is now likely to be seen at 764.4, a move above could see prices testing 768.6.
Trading Ideas:
Copper trading range for the day is 746-768.6.
Copper rose as hopes of a revival in demand grew after China eased COVID-19 restrictions and cut mortgage loan interest rates further
Shanghai will gradually begin reopening businesses such as shopping malls and hair salons from Monday after weeks in strict COVID lockdown
Citi downgrades China's 2022 GDP forecast to 4.2% from 5.1%.

Zinc

Zinc yesterday settled up by 1.04% at 311.45 as hopes of a revival in demand grew after China set out plans to ease COVID-19 restrictions, although shockingly weak industrial output data from world's second-largest economy limited gains. China's central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a fourth straight month, matching market expectations. The People's Bank of China (PBOC) said it was keeping the rate on 100 billion yuan ($14.7 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.85%, offseting the same amount of such loans due on the same day. China's economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter. Full or partial lockdowns were imposed in dozens of cities in March and April, including a protracted shutdown in commercial centre Shanghai, keeping workers and shoppers confined to their homes and severely disrupting supply chains. Retail sales in April shrank 11.1% from a year earlier, the biggest contraction since March 2020, data from the National Bureau of Statistics showed. Technically market is under fresh buying as market has witnessed gain in open interest by 0.27% to settled at 1123 while prices up 3.2 rupees, now Zinc is getting support at 307.7 and below same could see a test of 303.8 levels, and resistance is now likely to be seen at 313.9, a move above could see prices testing 316.2.
Trading Ideas:
Zinc trading range for the day is 303.8-316.2.
Zinc gained as hopes of a revival in demand grew after China set out plans to ease COVID-19 restrictions
China central bank keeps medium – term policy rate unchanged, market expects LPR reduction
China’s Retail sales in April shrank 11.1% from a year earlier, the biggest contraction since March 2020


Aluminium

Aluminium yesterday settled up by 0.44% at 237.4 as aluminium inventories in London Metal Exchange (LME) warehouses, already at their lowest in nearly 17 years, are likely to fall further over coming days and weeks as more metal leaves the LME system and heads for Europe where supplies are scarce. Record high power prices in Europe have pushed up costs of producing metals such as aluminium used widely in the energy, construction and packaging industries. Western Europe accounts for about 10% of global consumption estimated around 70 million tonnes this year. China's aluminium production rose 0.3% to 3.36 million tonnes in April from a year earlier, according to data released by the National Bureau of Statistics. For the first four months of the year, China produced 13.01 million tonnes, a drop of 0.2% from the same period last year, the data showed. China's economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter. Full or partial lockdowns were imposed in dozens of cities in March and April, including a protracted shutdown in commercial centre Shanghai, keeping workers and shoppers confined to their homes and severely disrupting supply chains. Technically market is under fresh buying as market has witnessed gain in open interest by 1.71% to settled at 2681 while prices up 1.05 rupees, now Aluminium is getting support at 235.6 and below same could see a test of 233.8 levels, and resistance is now likely to be seen at 238.8, a move above could see prices testing 240.2.
Trading Ideas:
Aluminium trading range for the day is 233.8-240.2.
Aluminium prices gains as inventories in LME warehouses, already at their lowest in nearly 17 years, are likely to fall further over coming days
China April aluminium output up 0.3% y/y at 3.36 mln tonnes – stats bureau
China's economy cools sharply in April as lockdowns bite

Mentha oil

Mentha oil yesterday settled down by -2.77% at 1093.3 on profit booking after seen supported as 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. Prices gains amid loss in production and improvement in demand while monsoon is yet to be seen as last year heavy rains in the pre-monsoon season came like a disaster for farmer. FMCG industry reels under extraordinary inflationary pressures, experts believe it will continue to grow in both volume and value, but margins will get squeezed. In Sambhal spot market, Mentha oil dropped by -35.9 Rupees to end at 1201.7 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -10.24% to settled at 868 while prices down -31.1 rupees, now Mentha oil is getting support at 1079 and below same could see a test of 1064.6 levels, and resistance is now likely to be seen at 1115.9, a move above could see prices testing 1138.4.
Trading Ideas:
Mentha oil trading range for the day is 1064.6-1138.4.
In Sambhal spot market, Mentha oil dropped  by -35.9 Rupees to end at 1201.7 Rupees per 360 kgs.
Mentha oil dropped on profit booking after seen supported as the harvest 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.

Turmeric

Turmeric yesterday settled down by -1.77% at 8204 as the production of turmeric is pegged at 11.76 lakh tonnes in 2021-22 against 11.24 lt in 2020-21. As per govt data, turmeric exports in Jan 2022 is down by 25% m/m at 10,600 tonnes Vs 14275 tonnes in Dec 2021. However, the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. In Feb, turmeric exports recorded lower by 17% on year 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. Turmeric crop was damaged in Maharashtra, Nizamabad in Telangana and Kadapa in Andhra Pradesh due to rains and cyclones. The farmers, who incurred losses during this period due to low price, are hoping to get good price this year, so that they could clear their dues to some extent. The market sentiment is buoyant mainly since the ending stocks are expected to be 17-18 lakh bags (50 kg each) this year against 25 lakh bags last year. Spices Board data showed turmeric production this year being projected at 11.01 lakh tonnes against 11.78 lakh tonnes last year, mainly on the output being affected in Telangana, Karnataka, Tamil Nadu, Assam and Haryana. In Nizamabad, a major spot market in AP, the price ended at 8402 Rupees dropped -139.2 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 5.98% to settled at while prices down -148 rupees, now Turmeric is getting support at 8110 and below same could see a test of 8016 levels, and resistance is now likely to be seen at 8348, a move above could see prices testing 8492.
Trading Ideas:
Turmeric trading range for the day is 8016-8492.
Turmeric dropped as the production of turmeric is pegged at 11.76 lakh tonnes in 2021-22 against 11.24 lt in 2020-21.
New season turmeric are diminishing and exports demand is improving as season progresses.
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.
In Nizamabad, a major spot market in AP, the price ended at 8402 Rupees dropped -139.2 Rupees.

Jeera

Jeera yesterday settled up by 1.02% at 22215 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. The low yield in India will affect the global prices as the country is the largest producer of jeera or cumin in the world. Total cumin output is estimated to have declined about 35% year-on-year to 558 million tonnes in 2022. The main reason for the low yield and low acreage under cultivation is that during the cumin sowing period (October-December 2021) farmers shifted to gram and mustard whose prices were higher than that of cumin. Secondly, excess rainfall in the key cumin belts of Dwarka, Banaskantha and Kutch in Gujarat, and Jodhpur and Nagaur in Rajasthan increased the probability of wilt attack, preventing farmers from sowing the crop. Cumin exports declined ~24% on-year in fiscal 2022 (April 2021- February 2022), owing to 51% drop in exports to China (accounts for one-third of exports) following a pesticide residue issue in Indian consignments. Given that production has likely declined by a significant ~35%, exports too are expected to fall this fiscal. In Unjha, a key spot market in Gujarat, jeera edged up by 341.1 Rupees to end at 21783.2 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 0.73% to settled at while prices up 225 rupees, now Jeera is getting support at 22060 and below same could see a test of 21900 levels, and resistance is now likely to be seen at 22435, a move above could see prices testing 22650.
Trading Ideas:
Jeera trading range for the day is 21900-22650.
Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
The low yield in India will affect the global prices as the country is the largest producer of jeera or cumin in the world.
Total cumin output is estimated to have declined about 35% year-on-year to 558 million tonnes in 2022.
In Unjha, a key spot market in Gujarat, jeera edged up by 341.1 Rupees to end at 21783.2 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 2.73% at 49970 as global supplies in 2022/23 are projected below a year earlier, as lower beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower, the USDA said. Global production is lowered 1.8 million bales from last month, largely due to a drop of 1.0 million bales from India. Global use is down 1.1 million bales, and ending stocks are up 271,000 bales. Global trade is down slightly with a drop of 500,000 bales in India exports. Additionally, imports are lower for China, Pakistan, and Vietnam. U.S. production is slightly lowered to 17.5 million bales, exports are unchanged at 14.8 million, and ending stocks are lowered to 3.4 million bales. The projected U.S. season-average farm price is up 1 cent to a record 92 cents per pound. Global ending stocks for most major producing and consuming countries are slightly lower compared with the previous year. Despite higher global production and lower consumption, drastically lower carryin compared with the previous year is projected to cap any significant rise in stock levels. This is especially relevant to China and India, where 2022/23 carrying levels are significantly below the previous year. Lower government and/or state trading enterprise stocks in both countries show the most significant difference compared with the previous year’s beginning stocks. In spot market, Cotton gained by 1220 Rupees to end at 49490 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -9.8% to settled at 2698 while prices up 1330 rupees, now Cotton is getting support at 49290 and below same could see a test of 48620 levels, and resistance is now likely to be seen at 50340, a move above could see prices testing 50720.
Trading Ideas:
Cotton trading range for the day is 48620-50720.
Cotton gains and crosses 50000 mark as Global supplies in 2022/23 are projected below a year earlier
Global production is lowered 1.8 million bales from last month, largely due to a drop of 1.0 million bales from India.
Global ending stocks for most major producing and consuming countries are slightly lower compared with the previous year.
In spot market, Cotton gained  by 1220 Rupees to end at 49490 Rupees.

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