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Gold

Gold yesterday settled up by 0.56% at 50829 as dollar weakened, while growing economic concerns put bullion on track for its best week since at least late-March. Recession fears have grown more recently and because of the volatility in equity markets there will be more interest in gold. The U.S. dollar dropped for its worst week since early February weighed down by a retreat in Treasury yields and fatigue after the currency's breathless 10%, 14-week surge. The continued softness in U.S. economic data fuelled growth concerns amid aggressive monetary tightening by Federal Reserve. Data showed holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.7%, its first inflow since April 19. British retail sales jumped unexpectedly in April, official data showed, but the outlook for consumer spending remained resolutely downbeat as the cost-of-living crunch intensifies. Retail sales volumes rose by 1.4% month-on-month last month after a 1.2% drop in March. The wider picture, however, remains weak. Retail sales in the three months to April fell 0.3%, after a 0.7% drop in March. 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. Technically market is under short covering as market has witnessed drop in open interest by -4.52% to settled at 5453 while prices up 285 rupees, now Gold is getting support at 50580 and below same could see a test of 50331 levels, and resistance is now likely to be seen at 50969, a move above could see prices testing 51109.
Trading Ideas:
Gold trading range for the day is 50331-51109.
Gold prices remained supported as dollar weakened, while growing economic concerns put bullion on track for its best week since at least late-March.
Recession fears have grown more recently and because of the volatility in equity markets there will be more interest in gold.
The U.S. dollar dropped for its worst week since early February weighed down by a retreat in Treasury yields.

Silver

Silver yesterday settled down by -0.26% at 61407 on profit booking after seen supported as continued softness in US economic data amid the Federal Reserve’s aggressive monetary tightening fueled growth concerns. 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. Fed Chair Jerome Powell also stated that the central bank was intent on using its tools to bring down multi-decade high inflation even if it involves moving past broadly understood neutral levels, raising the risk of a recession. Fears of a US economic slowdown dragged the dollar and US Treasury yields lower, benefitting the safe-haven bullion. The consumer confidence indicator in the Euro Area edged up by 0.9 points from the previous month to -21.1 in May of 2022, beating market expectations of -21.5 as sentiment continues to recover from March’s 22-month low, a preliminary estimate showed. China's central bank announced a reduction in a key interest rate for long-term loans to mitigate a slowdown in the world's second-largest economy. Technically market is under fresh selling as market has witnessed gain in open interest by 4.46% to settled at 14620 while prices down -157 rupees, now Silver is getting support at 61035 and below same could see a test of 60663 levels, and resistance is now likely to be seen at 61889, a move above could see prices testing 62371.
Trading Ideas:
Silver trading range for the day is 60663-62371.
Silver pared gains on profit booking after seen supported as continued softness in US economic data fueled growth concerns
Global bond yields were also mostly lower amid growing fears of a recession.
The consumer confidence indicator in the Euro Area edged up by 0.9 points from the previous month to -21.1 in May of 2022

Crude oil

Crude oil yesterday settled up by 1.82% at 8618 amid expectations of a pick-up in energy demand China, as China eased some COVID-19 lockdowns. The oil market is waiting for news about the energy sanctions amid many global headwinds including prolonged inflation, fears of a recession and more aggressive action from central banks. China's crude oil imports from top supplier Saudi Arabia soared 38% in April from a year earlier, hitting the highest monthly volume since May 2020, according to calculations based on official Chinese customs data. Saudi shipments amounted to 8.93 million tonnes last month, equivalent to 2.17 million barrels per day (bpd), according to data from the Chinese General Administration of Customs. The hefty purchases, with trades completed mostly in February, compare with 1.61 million bpd in March and 1.57 million bpd a year earlier. 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. Crude inventories fell by 3.4 million barrels in the last week to 420.8 million barrels, compared with expectations for a 1.4 million-barrel rise. Technically market is under fresh buying as market has witnessed gain in open interest by 36.36% to settled at 7737 while prices up 154 rupees, now Crude oil is getting support at 8473 and below same could see a test of 8327 levels, and resistance is now likely to be seen at 8708, a move above could see prices testing 8797.
Trading Ideas:
Crude oil trading range for the day is 8327-8797.
Crude oil gained amid expectations of a pick-up in energy demand China, as China eased some COVID-19 lockdowns.
U.S. crude stocks in the Strategic Petroleum Reserve fell last week to the lowest since November 1987
China's April Saudi oil imports soar 38% on yr, Russian oil up 4%

Nat.Gas

Nat.Gas yesterday settled down by -2.99% at 632.8 as output slowly rises and on forecasts for milder weather and lower demand over the next two weeks than previously expected. That decline comes despite a jump in the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants to a near seven-week high following maintenance outages at some Gulf Coast plants. 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 hold near 89.7 bcfd this week and next before sliding to 88.7 bcfd in two weeks. The average amount of gas flowing to U.S. LNG export plants rose to 12.3 bcfd so far in May from 12.2 bcfd in 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. 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. That was close to the 87-bcf build forecast and compares with an increase of 71 bcf in the same week last year and a five-year (2017-2021) average increase of 87 bcf. Technically market is under long liquidation as market has witnessed drop in open interest by -39.6% to settled at 2164 while prices down -19.5 rupees, now Natural gas is getting support at 614.9 and below same could see a test of 596.9 levels, and resistance is now likely to be seen at 648, a move above could see prices testing 663.1.
Trading Ideas:
Natural gas trading range for the day is 596.9-663.1.
Natural gas fell as output slowly rises and on forecasts for milder weather and lower demand over the next two weeks than previously expected.
That decline comes despite a jump in the amount of gas flowing to U.S. LNG export plants to a near seven-week high
EIA said utilities added 89 billion cubic feet (bcf) of gas to storage during the week ended May 13.


Copper

Copper yesterday settled up by 0.33% at 771.6 as optimism over the easing of some COVID-19 restrictions in top consumer China lifted demand prospects, while a pullback in the U.S. dollar added support. 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. Chinese-owned Las Bambas is one of the world's largest copper mines, accounting for 2% of global supplies. The mine suspended operations on April 20 after two indigenous communities entered company property, reclaiming land that had once belonged to them before the mine started operations in 2016. 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 -18.82% to settled at 2264 while prices up 2.55 rupees, now Copper is getting support at 765.9 and below same could see a test of 760.3 levels, and resistance is now likely to be seen at 777.9, a move above could see prices testing 784.3.
Trading Ideas:
Copper trading range for the day is 760.3-784.3.
Copper prices gained as optimism over the easing of some COVID-19 restrictions in top consumer China lifted demand prospects
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.7% from a week ago.
Peru fails yet again to broker truce allowing MMG's Las Bambas mine restart

Zinc

Zinc yesterday settled down by -0.27% at 319.2 on profit booking after prices ealier in the day gained 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 long liquidation as market has witnessed drop in open interest by -17.32% to settled at 921 while prices down -0.85 rupees, now Zinc is getting support at 316 and below same could see a test of 312.7 levels, and resistance is now likely to be seen at 323.5, a move above could see prices testing 327.7.
Trading Ideas:
Zinc trading range for the day is 312.7-327.7.
Zinc prices dropped on profit booking after prices ealier in the day 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 up by 1.51% at 248.4 as the rapidly falling US dollar index relieved the market from heavy pressure before, and the expected recovering consumption in China also offered support. China policy support to the consumption side, improved market confidence, which led to concentrate restocking demand. As such, aluminium prices rose to some extent. The People's Bank of China held steady its key rates for corporate and household loans at May fixing, but slashed the mortgage reference rate for the second time this year, amid a slowdown in the Chinese economy due to worst COVID-19 outbreak in more than two years, a property crisis, and weak loan demand. The one-year LPR was kept unchanged at 3.7% after cuts of 5 and 10 bps in December and January, while the five-year LPR was trimmed by 15 bps, the most since a revamp of the rate in 2019, to 4.45%. Global primary aluminium output in April was unchanged year on year at 5.599 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production rose to 3.29 million tonnes in April from 3.257 million tonnes a year earlier, according to IAI data. The aluminium ingot social inventories across China’s eight major markets totalled 965,000 mt as of May 19, down 38,000 mt from a week ago and 22,000 mt from the end of April. Technically market is under short covering as market has witnessed drop in open interest by -10.99% to settled at 2114 while prices up 3.7 rupees, now Aluminium is getting support at 244.8 and below same could see a test of 241.1 levels, and resistance is now likely to be seen at 251.1, a move above could see prices testing 253.7.
Trading Ideas:
Aluminium trading range for the day is 241.1-253.7.
Aluminium rose as the rapidly falling US dollar index relieved the market, and the expected recovering consumption in China also offered support.
Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.6% from a week ago, the exchange said.
Global aluminium output flat y – o – y at 5.599 mln T in April – IAI

Mentha oil

Mentha oil yesterday settled down by -0.69% at 1097.3 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 -13.4 Rupees to end at 1208.8 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -8.13% to settled at 678 while prices down -7.6 rupees, now Mentha oil is getting support at 1089 and below same could see a test of 1080.6 levels, and resistance is now likely to be seen at 1107.9, a move above could see prices testing 1118.4.
Trading Ideas:
Mentha oil trading range for the day is 1080.6-1118.4.
In Sambhal spot market, Mentha oil dropped  by -13.4 Rupees to end at 1208.8 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 1.21% at 8202 on some short covering after pressure seen 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 8319.2 Rupees dropped -48.3 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -0.03% to settled at while prices up 98 rupees, now Turmeric is getting support at 8108 and below same could see a test of 8014 levels, and resistance is now likely to be seen at 8258, a move above could see prices testing 8314.
Trading Ideas:
Turmeric trading range for the day is 8014-8314.
Turmeric recovered on some short covering after pressure seen 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 8319.2 Rupees dropped -48.3 Rupees.

Jeera

Jeera yesterday settled up by 0.32% at 21770 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 down by -77.8 Rupees to end at 21623.9 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -1.83% to settled at while prices up 70 rupees, now Jeera is getting support at 21690 and below same could see a test of 21605 levels, and resistance is now likely to be seen at 21870, a move above could see prices testing 21965.
Trading Ideas:
Jeera trading range for the day is 21605-21965.
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 down by -77.8 Rupees to end at 21623.9 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -2.19% at 48300 as 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. 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. 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 dropped by -260 Rupees to end at 50270 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -16.73% to settled at 1578 while prices down -1080 rupees, now Cotton is getting support at 47310 and below same could see a test of 46310 levels, and resistance is now likely to be seen at 49480, a move above could see prices testing 50650.
Trading Ideas:
Cotton trading range for the day is 46310-50650.
Cotton dropped as area to increase by 10-15 per cent in North India.
Seed firms say acreage may not rise as growers face water, weather problems
Global supplies in 2022/23 are projected below a year earlier
In spot market, Cotton dropped  by -260 Rupees to end at 50270 Rupees.

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