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Gold

Gold yesterday settled up by 0.15% at 50907 boosted by a slide in U.S. dollar to its lowest in a month, while growth concerns in the economy kept bullion's safe-haven demand intact. The dollar slumped 1% as investors kept up selling pressure, cutting bets on further dollar gains from rising U.S. rates. St. Louis Federal Reserve Bank President James Bullard reiterated his view that the U.S. central bank ought to raise interest rates to 3.5% this year to get high inflation more quickly under control. "The more we can frontload and the more we can get inflation and inflation expectations under control the better off we will be," Bullard said in an interview. "And in the out years, '23 and '24, we could be lowering the policy rate because we've got inflation under control." Gold flipped to discount in India even as retail demand remained robust because of the wedding season, while easing of COVID restrictions boost hopes of demand improvement in top-consumer China. Gold was sold at discounts of about $2 per ounce to at par with global benchmark spot rates in China, versus $6-$8 discounts last week. In India, dealers were offering a discount of up to $2 an ounce over official domestic prices down from last week's premium of $5.50. Technically market is under short covering as market has witnessed drop in open interest by -5.13% to settled at 5173 while prices up 78 rupees, now Gold is getting support at 50758 and below same could see a test of 50609 levels, and resistance is now likely to be seen at 51106, a move above could see prices testing 51305.

Trading Ideas:
#Gold trading range for the day is 50609-51305.
# Gold prices rose boosted by a slide in U.S. dollar to its lowest in a month
# Growth concerns in the economy kept bullion's safe-haven demand intact.
# Fed could cut rates in 2023, 2024 once inflation under control – Bullard

Silver
Silver yesterday settled down by -0.17% at 61303 on profit booking after prices rose as signs of progress in China's effort to bring coronavirus outbreaks under control spooked investors away from the safe-haven currency. The precious metal has been benefiting from safe-haven demand stemming from persistent geopolitical tensions and lingering concerns about slowing global growth. A persistent COVID-19 outbreak in Beijing and fears of slower economic growth also supported safe haven buying of the precious metal. St. Louis Federal Reserve Bank President James Bullard reiterated his view that the U.S. central bank ought to raise interest rates to 3.5% this year to get high inflation more quickly under control. The European Central Bank is likely to lift its deposit rate out of negative territory by the end of September and could raise it further if it sees inflation stabilising at 2%, ECB President Christine Lagarde said. She was accelerating an already sharp policy turnaround, which has seen her go from all but ruling out rate hikes this year to now pencilling in several in the face of record-high inflation in the euro zone. "Based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter," Lagarde said. Technically market is under long liquidation as market has witnessed drop in open interest by -0.19% to settled at 14592 while prices down -104 rupees, now Silver is getting support at 60847 and below same could see a test of 60391 levels, and resistance is now likely to be seen at 62016, a move above could see prices testing 62729.

Trading Ideas:
# Silver trading range for the day is 60391-62729.
# Silver dropped on profit booking after prices rose as signs of progress in China's effort to bring coronavirus outbreaks under control spooked investors away from dollar.
# The precious metal has been benefiting from safe-haven demand stemming from persistent geopolitical tensions
# Fed’s Bullard reiterated his view that the U.S. central bank ought to raise interest rates to 3.5% this year to get high inflation more quickly under control.

Crude oil

Crude oil yesterday settled down by -0.87% at 8543 amid concerns about China's efforts to crush COVID-19 with lockdowns, even with Shanghai due to reopen on June 1. Lockdowns in China, the world's top oil importer, have hammered industrial output and construction, prompting moves to prop up the economy, including a bigger than expected mortgage rate cut. The European Union's inability to reach a final agreement on banning Russian oil after its invasion of Ukraine, which Moscow calls a "special operation", has also stopped oil prices from climbing much higher. Money managers raised their net long U.S. crude futures and options positions in the week to May 17, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group raise its combined futures and options position in New York and London by 31,067 contracts to 286,339 during the period. U.S. crude oil inventories fell last week as refining activity picked up ahead of the busy summer driving season, even as the United States continued to release barrels from its strategic reserve. Crude inventories fell by 3.4 million barrels in the week to May 13 to 420.8 million barrels, more than double the 1.4 million-barrel rise in a poll. Technically market is under long liquidation as market has witnessed drop in open interest by -12.91% to settled at 6738 while prices down -75 rupees, now Crude oil is getting support at 8457 and below same could see a test of 8371 levels, and resistance is now likely to be seen at 8659, a move above could see prices testing 8775.

Trading Ideas:
# Crude oil trading range for the day is 8371-8775.
# Crude oil dropped amid concerns about China's efforts to crush COVID-19 with lockdowns, even with Shanghai due to reopen on June 1.
# Lockdowns in China, have hammered industrial output and construction, prompting moves to prop up the economy
# The U.S. Strategic Petroleum Reserve (SPR) fell by 5 million barrels to 538 million barrels, its lowest since November of 1987.

Nat.Gas
Nat.Gas yesterday settled up by 5.53% at 667.8 as the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants rose to a seven-week high, causing some in the market to worry about the amount of gas available for U.S. stockpiles. Over the past couple of weeks, the amount of gas in U.S. storage compared to normal levels for this time of year has fallen below the amount of gas available in Northwest European stockpiles. That's because much higher European prices continue to attract pipeline exports from Russia and LNG tankers from around the world. Last week, speculators increased their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the first time in five weeks to their highest since early May, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Refinitiv projected average U.S. gas demand, including exports, would ease from 89.4 bcfd this week to 88.0 bcfd next week. Those forecasts were lower than Refinitiv forecast. The average amount of gas flowing to U.S. LNG export plants has risen to 12.4 bcfd so far in May from 12.2 bcfd in April. Technically market is under short covering as market has witnessed drop in open interest by -12.43% to settled at 1895 while prices up 35 rupees, now Natural gas is getting support at 627.9 and below same could see a test of 588 levels, and resistance is now likely to be seen at 689.2, a move above could see prices testing 710.6.

Trading Ideas:
# Natural gas trading range for the day is 588-710.6.
# Natural gas edged up as the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants rose to a seven-week high
# The amount of gas in U.S. storage compared to normal levels for this time of year has fallen below the amount of gas available in Northwest European stockpiles.
# Speculators increased their net long futures and options positions for the first time in five weeks to their highest since early May


Copper
Copper yesterday settled up by 1.37% at 782.2 helped by a weaker U.S. dollar and as support measures and plans to end COVID-19 lockdowns in top metals consumer China lifted hopes for a recovery in demand. China cut its benchmark reference rate for mortgages by an unexpectedly wide margin, as Beijing seeks to revive the ailing housing sector to prop up the economy. Operations have been suspended at Khoemacau Zone 5 copper and silver mine in Botswana after an underground accident killed two people. China lowered its benchmark reference rate for mortgages for the second time this year, as Beijing is keen to revive credit demand to prop up the economy. Peru's prime minister on failed to broker a deal with indigenous communities to allow for the restart of operations at MMG Ltd's Las Bambas copper mine, the government's fourth failed negotiation attempt. The global copper market is expected to see a surplus of 142,000 tonnes this year and of 352,000 tonnes in 2023, the International Copper Study Group (ICSG) said. "World mine production this year is expected to benefit from additional output from new and expanded mines as well as an improvement in the general situation regarding the pandemic," the ICSG said in a release. Technically market is under short covering as market has witnessed drop in open interest by -23.45% to settled at 1733 while prices up 10.6 rupees, now Copper is getting support at 773.7 and below same could see a test of 765.1 levels, and resistance is now likely to be seen at 787.2, a move above could see prices testing 792.1.

Trading Ideas:
# Copper trading range for the day is 765.1-792.1.
# Copper prices rose helped by a weaker U.S. dollar and as support measures and plans to end COVID-19 lockdowns in China lifted hopes for a recovery in demand.
# Operations have been suspended at Khoemacau Zone 5 copper mine in Botswana after an underground accident
# Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.7% from a week ago, the exchange said.

Zinc
Zinc yesterday settled up by 2.32% at 326.6 as 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. Around 13.5 million tonnes of zinc is produced and consumed each year. Data released by the London Metal Exchange (LME) showed that LME zinc inventory is still in a downward channel, and the decline in inventory has slowed down in recent days. The latest inventory was 86,125 mt as of May 17, the lowest in over two years. SHFE zinc stocks dropped by 3.22% on a weekly basis to 167,066 mt in the week of May 13, a two-and-a-half-month low. China zinc ingot social inventory across seven regions totalled 265,800 mt as of today, up 4,700 mt from Monday May 16 and down 1,100 mt from last Friday May 13, indicating that the market players still stood on the sidelines concerning future demand. Technically market is under short covering as market has witnessed drop in open interest by -29.42% to settled at 650 while prices up 7.4 rupees, now Zinc is getting support at 321.2 and below same could see a test of 315.8 levels, and resistance is now likely to be seen at 329.8, a move above could see prices testing 333.

Trading Ideas:
# Zinc trading range for the day is 315.8-333.
# Zinc prices gained as the global zinc market flips to deficit of 6,300 T in March
# Zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.3% from a week ago.
# LME zinc inventory is still in a downward channel, and the decline in inventory has slowed down in recent days.

Aluminium

Aluminium yesterday settled down by -0.44% at 247.3 on profit booking as China’s primary aluminium exports in April fell 24.2% on the month, up 64 times on the year. However, downside seen limited amid optimism over the easing of some COVID-19 restrictions in top consumer China lifted demand prospects. China lowered its benchmark reference rate for mortgages for the second time this year, as Beijing is keen to revive credit demand to prop up the economy. LME aluminium inventories have started a relatively smooth road to destocking. Last week, inventories continued to decline. The latest inventory level was 532,500 mt as of May 16, which fell to a new low in nearly 17 years. Estimated Chinese production rose to 3.29 million tonnes in April from 3.257 million tonnes a year earlier, according to IAI data. China's aluminium production rose 0.3% to 3.36 million tonnes in April from a year earlierFor 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. According to customs data, China’s import volume of unwrought aluminium alloys in April 2022 was 106,000 mt, a year-on-year increase of 19.2% and a month-on-month decrease of 12.1%. China primary aluminium imports stood at 34,876.7 mt in April, down 11.6% MoM and 77.6% YoY. Technically market is under long liquidation as market has witnessed drop in open interest by -30.79% to settled at 1463 while prices down -1.1 rupees, now Aluminium is getting support at 245.3 and below same could see a test of 243.4 levels, and resistance is now likely to be seen at 249.7, a move above could see prices testing 252.2.

Trading Ideas:
# Aluminium trading range for the day is 243.4-252.2.
# Aluminium dropped on profit booking as China’s primary aluminium exports in April fell 24.2% on the month
# LME aluminium inventories have started a relatively smooth road to destocking. Last week, inventories continued to decline.
# Global aluminium output flat y – o – y at 5.599 mln T in April – IAI

Mentha oil

Mentha oil yesterday settled down by -1.28% at 1083.3 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 -3.3 Rupees to end at 1206 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -12.54% to settled at 593 while prices down -14 rupees, now Mentha oil is getting support at 1074.6 and below same could see a test of 1065.8 levels, and resistance is now likely to be seen at 1095.6, a move above could see prices testing 1107.8.

Trading Ideas:
# Mentha oil trading range for the day is 1065.8-1107.8.
# In Sambhal spot market, Mentha oil dropped  by -3.3 Rupees to end at 1206 Rupees per 360 kgs.
# Mentha oil dropped 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.

Turmeric

Turmeric yesterday settled up by 0.68% at 8258 as the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. As per first advance estimates by the Govt for 2021/22 season, 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. 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 8335.5 Rupees gained 16.3 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.92% to settled at while prices up 56 rupees, now Turmeric is getting support at 8190 and below same could see a test of 8120 levels, and resistance is now likely to be seen at 8340, a move above could see prices testing 8420.
Trading Ideas:
# Turmeric trading range for the day is 8120-8420.
# Turmeric gains as the arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
# As per first advance estimates, the production of turmeric is pegged at 11.76 lakh tonnes in 2021-22 against 11.24 lt in 2020-21.
# 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 8335.5 Rupees gained 16.3 Rupees.

Jeera

Jeera yesterday settled down by -0.51% at 21660 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 down by -7.55 Rupees to end at 21616.35 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -2.67% to settled at while prices down -110 rupees, now Jeera is getting support at 21440 and below same could see a test of 21215 levels, and resistance is now likely to be seen at 21890, a move above could see prices testing 22115.

Trading Ideas:
# Jeera trading range for the day is 21215-22115.
# 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 down by -7.55 Rupees to end at 21616.35 Rupees per 100 kg.


Cotton

Cotton yesterday settled up by 0.23% at 48410 amid rising demand and possible lower supplies. 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. At the same time, global supplies in 2022/23 are projected below a year earlier, as smaller beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower. The Telangana government is likely to encourage the cultivation of cotton crop on large scale this kharif in the state in general and erstwhile Adilabad district in particular following huge demand for Telangana’s cotton in the international market and good price for cotton. The involvement of the state government in commercial operations of cotton production is minimal unlike paddy, pulses and maize and jowar. The area under cotton is seen expanding in North India during the current kharif season, mainly in Haryana and Rajasthan. The trade expects the area to increase by 10-15 per cent. Seed firms say acreage may not rise as growers face water, weather problems. In spot market, Cotton dropped by -620 Rupees to end at 49460 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -7.35% to settled at 1462 while prices up 110 rupees, now Cotton is getting support at 47950 and below same could see a test of 47490 levels, and resistance is now likely to be seen at 48670, a move above could see prices testing 48930.

Trading Ideas:
# Cotton trading range for the day is 47490-48930.
# Cotton prices recovered to end with gains amid rising demand and possible lower supplies.
# The USDA in its latest report lowered U.S. production by one million bales
# The Telangana government is likely to encourage the cultivation of cotton crop on large scale this kharif
# In spot market, Cotton dropped  by -620 Rupees to end at 49460 Rupees.

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