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Gold

Gold yesterday settled up by 0.65% at 50544 as a drop in U.S. dollar and Treasury yields coupled with a slide in risk assets rekindled demand for the safe-haven bullion amid worries about global growth. The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, reaching a four month-high, potentially hinting at some cooling in demand for labor amid tightening financial conditions. But the labor market remains tight, with the report from the Labor Department showing the number of people on jobless rolls at its lowest since the end of 1969 in early May. Gold's reputation as an inflation hedge is being countered by an aggressive policy stance taken by central banks to fight soaring prices. Federal Reserve Chair Jerome Powell recently stated that the central bank was intent on using its tools to bring down multi-decade high inflation. The Fed has raised its benchmark policy rate by an aggregate of 75 basis points this year, and is on track to increase it again in 50-basis point increments at each of the next two meetings in June and July. Meanwhile, two US central bankers said they expect the Fed to downshift to a more measured pace of policy tightening after July as it seeks to quell inflation without lifting borrowing costs so high that they send the economy into recession. Technically market is under short covering as market has witnessed drop in open interest by -2.38% to settled at 5711 while prices up 326 rupees, now Gold is getting support at 50148 and below same could see a test of 49752 levels, and resistance is now likely to be seen at 50850, a move above could see prices testing 51156.
Trading Ideas:
Gold trading range for the day is 49752-51156.
Gold prices rose as a drop in U.S. dollar and Treasury yields coupled with a slide in risk assets rekindled demand for the safe-haven bullion
U.S. weekly jobless claims rise; continuing claims lowest since 1969
Federal Reserve Chair Jerome Powell recently stated that the central bank was intent on using its tools to bring down multi-decade high inflation

Silver

Silver yesterday settled up by 1.29% at 61564 as an equity sell-off deepened amid expectations that the tightening of monetary policy in the United States will be an extended process. The dollar edged lower and U.S. bond yields retreated, helping offer some respite for bullion in the short term. Investors fretted over the impact of the prolonged Ukraine-Russia war, higher interest rates and China's zero-COVID policy on global growth. ECB policymakers expressed concerns over high inflation and agreed that a gradual normalisation of the monetary policy should continue, minutes from the last ECB meeting in April showed. The central bank also reinforced that net asset purchases under the APP should be concluded in the third quarter, sooner rather than later and that forward guidance conditions for a rise in key interest rates would become crucial for the policy discussion at the June meeting. During the April 2022 meeting, the ECB left interest rates at record low levels and confirmed monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June. With bond buys set to end in the third quarter and as interest rates will only rise thereafter, money markets are currently pointing to the first rise in interest rates in July 2022. Technically market is under short covering as market has witnessed drop in open interest by -7.14% to settled at 13996 while prices up 786 rupees, now Silver is getting support at 60576 and below same could see a test of 59588 levels, and resistance is now likely to be seen at 62151, a move above could see prices testing 62738.
Trading Ideas:
Silver trading range for the day is 59588-62738.
Silver rose as an equity sell-off deepened amid expectations that the tightening of monetary policy in US will be an extended process.
The dollar edged lower and U.S. bond yields retreated, helping offer some respite for bullion in the short term.
Fed’s Evans said that the Fed aims to reach a neutral rate -- the rate at which the economy is stable -- sooner rather than later

Crude oil

Crude oil yesterday settled up by 1.73% at 8464 amid expectations of a pick up in energy demand on reports Chinese officials are planning to ease restrictions in Shanghai. The uncertainty over sanctions on Russia by the European Union also weighed on oil prices. European Union members are still struggling to agree on a sixth package of sanctions against Russia due to resistance by some member countries, including Hungary. U.S. crude stocks in the Strategic Petroleum Reserve fell last week to the lowest since November 1987, Energy Information Administration data showed. SPR stocks fell to nearly 528 million barrels. Meanwhile, East Coast refiner utilization rose to 95%, the highest since July 2018, the data showed. 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 forecast in a poll. The drop came even though the U.S. Strategic Petroleum Reserve (SPR) fell by 5 million barrels to 538 million barrels, its lowest since November of 1987. Technically market is under fresh buying as market has witnessed gain in open interest by 29.16% to settled at 5674 while prices up 144 rupees, now Crude oil is getting support at 8161 and below same could see a test of 7858 levels, and resistance is now likely to be seen at 8631, a move above could see prices testing 8798.
Trading Ideas:
Crude oil trading range for the day is 7858-8798.
Crude oil prices moved higher amid expectations of a pick up in energy demand on reports Chinese officials are planning to ease restrictions in Shanghai.
US SPR stocks fall to lowest since Nov 1987 – EIA
U.S. crude oil inventories fell last week as refining activity picked up ahead of the busy summer driving season

Nat.Gas

Nat.Gas yesterday settled up by 0.28% at 652.3 on a drop in daily output over the past few days and forecasts for more demand next week than previously expected. Power demand in Texas hit a monthly record high on Tuesday and was on track to break that on Wednesday as homes and businesses keep their air conditioners cranked up to escape a spring heatwave. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.8 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. On a daily basis, however, output was on track to drop 1.6 bcfd over the past three days to a three-week preliminary low of 93.7 bcfd. Refinitiv projected average U.S. gas demand, including exports, would hold near 89.7 bcfd this week and next. The forecast for next week was higher than Refinitiv's outlook on Tuesday. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. Technically market is under short covering as market has witnessed drop in open interest by -17.99% to settled at 3583 while prices up 1.8 rupees, now Natural gas is getting support at 625 and below same could see a test of 597.6 levels, and resistance is now likely to be seen at 669.1, a move above could see prices testing 685.8.
Trading Ideas:
Natural gas trading range for the day is 597.6-685.8.
Natural gas rose on a drop in daily output over the past few days and forecasts for more demand next week than previously expected.
The U.S. Energy Information Administration (EIA) said utilities added 89 billion cubic feet (bcf) of gas to storage during the week ended May 13.
Power demand in Texas hit a monthly record high as homes and businesses keep their air conditioners cranked up to escape a spring heatwave.


Copper

Copper yesterday settled up by 1.68% at 769.05 as the domestic government has stated that it will introduce more policies to stimulate the economy and stabilize growth. In addition, the improvement of the pandemic in Shanghai has greatly improved market confidence and pushed copper prices to rebound. According to the National Bureau of Statistics, China copper cathode output stood at 898,000 mt in April, down 1% YoY, and the output is likely to fall further in May amid concentrated maintenance. LME copper inventory continued to rise, and added 4,350 mt to more than 180,000 mt yesterday. China has policy room to cope with challenges, as the downward pressure on China's economy increases, state media quoted Premier Li Keqiang. Permits for future U.S. homebuilding tumbled to a five-month low in April, suggesting the housing market was slowing as rising mortgage rates contribute to reduced affordability for entry-level and first-time buyers. Philadelphia Federal Reserve Bank President Patrick Harker said he expects the Fed to deliver two more half-point rate hikes before switching to quarter-point increments until the "scourge" of inflation is beaten back. U.S. Treasury Secretary Janet Yellen said that COVID-19 lockdowns in China appear to be impeding supply chain recovery and a broader slowdown in growth in the world's No. 2 economy could have global spillover effects. Technically market is under short covering as market has witnessed drop in open interest by -22.83% to settled at 2789 while prices up 12.7 rupees, now Copper is getting support at 762.1 and below same could see a test of 755 levels, and resistance is now likely to be seen at 773.4, a move above could see prices testing 777.6.
Trading Ideas:
Copper trading range for the day is 755-777.6.
Copper gained as the domestic government has stated that it will introduce more policies to stimulate the economy and stabilize growth.
According to the National Bureau of Statistics, China copper cathode output stood at 898,000 mt in April, down 1% YoY
China has policy room to cope with challenges, as the downward pressure on China's economy increases

Zinc

Zinc yesterday settled up by 3.09% at 320.05 after data 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. According to the latest report data released by WBMS, the global zinc market saw a supply surplus of 37,800 mt from January to March 2022, while in 2021, the market saw a supply deficit of 99,600 mt. The global output of refined zinc decreased by 0.5% year-on-year, while the demand was flat year-on-year. In March 2022, the output of the zinc plate was 1,213,100 mt, and the demand was 1,238,500 mt. The SHFE/LME price ratio dropped slightly to 6.99, and the import window should have opened, and the import data in June can be expected in consideration of the shipping cycle. In the spot market, as manufacturers that had rigid demand before have completed their restocking, market transactions were relatively thin, and traders were no longer firm to their prices and lowered the premiums to clinch a deal. Technically market is under short covering as market has witnessed drop in open interest by -1.68% to settled at 1114 while prices up 9.6 rupees, now Zinc is getting support at 311.8 and below same could see a test of 303.6 levels, and resistance is now likely to be seen at 324.3, a move above could see prices testing 328.6.
Trading Ideas:
Zinc trading range for the day is 303.6-328.6.
Zinc gained after data showed that LME zinc inventory is still in a downward channel, and the decline in inventory has slowed down in recent days
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.
Global zinc market saw a supply surplus of 37,800 mt from January to March 2022 – WBMS

Aluminium

Aluminium yesterday settled up by 2.71% at 244.7 after China aluminium ingot social inventory totalled 965,000 mt, down 38,000 mt from a week ago, which boosted the confidence. The market shall watch how easing COVID situation would support the aluminium market. According to data released by the London Metal Exchange (LME), since mid-February, 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. SHFE aluminium inventories fell 16.33% on a weekly basis to 246,931 mt as of May 13, a seven-month low. China produced 3.36 million mt of primary aluminium in April, up 0.3% from a year earlier, setting a record high, as power rationing eased, allowing smelters to expand operations, according to data from the National Bureau of Statistics (NBS). Average daily production of primary aluminium was 112,000 mt, up from 106,453 mt in March and also a record high. Power rationing that was aimed at ensuring adequate supply to major users reduced primary aluminium production in the first quarter. By April, however, power rationing had eased significantly. Technically market is under short covering as market has witnessed drop in open interest by -9.25% to settled at 2375 while prices up 6.45 rupees, now Aluminium is getting support at 240.2 and below same could see a test of 235.6 levels, and resistance is now likely to be seen at 247.3, a move above could see prices testing 249.8.
Trading Ideas:
Aluminium trading range for the day is 235.6-249.8.
Aluminium prices gained after China aluminium ingot social inventory totalled 965,000 mt, down 38,000 mt from a week ago
The market shall watch how easing COVID situation would support the aluminium market.
China produced 3.36 million mt of primary aluminium in April, up 0.3% from a year earlier, setting a record high

Mentha oil

Mentha oil yesterday settled up by 0.39% at 1104.9 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 gained by 0.5 Rupees to end at 1209 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -5.87% to settled at 738 while prices up 4.3 rupees, now Mentha oil is getting support at 1090.2 and below same could see a test of 1075.6 levels, and resistance is now likely to be seen at 1130.7, a move above could see prices testing 1156.6.
Trading Ideas:
Mentha oil trading range for the day is 1075.6-1156.6.
In Sambhal spot market, Mentha oil gained  by 0.5 Rupees to end at 1209 Rupees per 360 kgs.
Mentha oil prices gained 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 down by -0.2% at 8104 due to lower demand and sufficient supplies in the physical market. The arrivals have decreased in the physical market due to lower prices and lack of aggressive buying by bulk traders. 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 exports fell by 18% on y-o-y basis to 1.37 lakh tonnes during April[1]February 2021-22 over corresponding period of the previous year. 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. Earlier estimate was 4.89 lakh tonnes. In Nizamabad, a major spot market in AP, the price ended at 8319.2 Rupees dropped -48.6 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.21% to settled at while prices down -16 rupees, now Turmeric is getting support at 7978 and below same could see a test of 7852 levels, and resistance is now likely to be seen at 8180, a move above could see prices testing 8256.
Trading Ideas:
Turmeric trading range for the day is 7852-8256.
Turmeric dropped due to lower demand and sufficient supplies in the physical market.
The arrivals have decreased in the physical market due to lower prices and lack of aggressive buying by bulk traders.
Turmeric exports in Feb 2022 were lower by 17% y/y at 10400 tonnes vs 12,575 tonnes
In Nizamabad, a major spot market in AP, the price ended at 8319.2 Rupees dropped -48.6 Rupees.

Jeera

Jeera yesterday settled down by -1.48% at 21700 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 -240.4 Rupees to end at 21701.7 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -2% to settled at while prices down -325 rupees, now Jeera is getting support at 21450 and below same could see a test of 21195 levels, and resistance is now likely to be seen at 21980, a move above could see prices testing 22255.
Trading Ideas:
Jeera trading range for the day is 21195-22255.
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 -240.4 Rupees to end at 21701.7 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.63% at 49380 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. 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. Indian traders and spinning mills should first meet demand from the local textile industry and only then export surplus raw cotton and yarn, Textile Minister Piyush Goyal told industry officials in a meeting. The minister's comments came after textile mills in the southern state of Tamil Nadu, a leading exporter of garments, went on a two-day strike earlier this week demanding a ban on exports. Goyal asked all stakeholders to resolve cotton and yarn price issues through collaboration rather than competition, without pushing the government to intervene as it may have long term impact on the cotton value chain. The USDA in its monthly report projected lower global supplies, consumption and ending stocks in 2022/23, while export sales data showed net sales of cotton for 2021/2022 fell 88% from the previous week and 76% from the prior 4-week average. In spot market, Cotton gained by 170 Rupees to end at 50530 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -12.31% to settled at 1895 while prices up 310 rupees, now Cotton is getting support at 48620 and below same could see a test of 47870 levels, and resistance is now likely to be seen at 49810, a move above could see prices testing 50250.
Trading Ideas:
Cotton trading range for the day is 47870-50250.
Cotton gains as Global supplies in 2022/23 are projected below a year earlier
Seed firms say acreage may not rise as growers face water, weather problems
The area to increase by 10-15 per cent in North India.
In spot market, Cotton gained  by 170 Rupees to end at 50530 Rupees.

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