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Gold

Gold yesterday settled down by -0.6% at 49873 as the dollar's strong run with more aggressive U.S. interest rates on the horizon sapped appetite for bullion. U.S. Federal Reserve Chair Jerome Powell said that the battle to control inflation would "include some pain", as the impact of higher interest rates is felt. The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, touching the highest level in three months, but there is no material shift in labor market conditions amid strong demand for workers. Although seen as an inflation hedge, bullion yields no interest and is sensitive to rising U.S. short-term interest rates and bond yields. A dip in domestic prices in India gave a fillip to demand for physical gold as the wedding season picked up pace, while some consumers snapped up bargains in China. The improved demand allowed dealers to charge the highest premiums in over a year, at $5.5 an ounce over official domestic prices versus $3 last week. In China, discounts narrowed to $6-$8 per ounce over global benchmark spot rates from $10 last week, even as major regions remain in lockdown due to COVID-19. In Hong Kong, gold was sold anywhere between on par with the benchmark to a $2 discount, while Singapore saw $1.30-$1.80 an ounce premiums. Technically market is under long liquidation as market has witnessed drop in open interest by -5.56% to settled at 7066 while prices down -301 rupees, now Gold is getting support at 49613 and below same could see a test of 49352 levels, and resistance is now likely to be seen at 50192, a move above could see prices testing 50510.
Trading Ideas:
Gold trading range for the day is 49352-50510.
Gold fell as the dollar's strong run with more aggressive U.S. interest rates on the horizon sapped appetite for bullion.
U.S. Federal Reserve Chair Jerome Powell said that the battle to control inflation would "include some pain", as the impact of higher interest rates is felt.
India’ s Gold imports dipped by around 72% to $1.72 billion in April, from $6.23 billion in April 2021.

Silver

Silver yesterday settled up by 0.99% at 59332 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 -7.12% to settled at 16986 while prices up 581 rupees, now Silver is getting support at 58523 and below same could see a test of 57713 levels, and resistance is now likely to be seen at 59812, a move above could see prices testing 60291.
Trading Ideas:
Silver trading range for the day is 57713-60291.
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 4.12% at 8511 amid concerns of further supply disruptions from Russia. The prospect of an EU ban on Russian oil continued to buoy prices, with tensions escalating further this week after Moscow imposed sanctions on European units of state-owned Gazprom. OPEC cut its forecast for growth in world oil demand in 2022 for a second straight month, citing the impact of Russia's invasion of Ukraine, rising inflation and the resurgence of the Omicron coronavirus variant in China. In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said world demand would rise by 3.36 million barrels per day (bpd) in 2022, down 310,000 bpd from its previous forecast. The world will not be left short of oil even with lower output from sanctions-hit Russia, the International Energy Agency (IEA) said, in a U-turn after it predicted a possible "global supply shock" in March. The IEA, after warning on March 16 that 3 million barrels per day (bpd) could be shut in from April, lowered that figure for a second time as it noted only 1 million bpd had gone offline. An International Energy Agency report said rising oil production in the Middle East and the United States and a slowdown in demand growth were "expected to fend off an acute supply deficit amid a worsening Russian supply disruption". Technically market is under fresh buying as market has witnessed gain in open interest by 39.01% to settled at 7871 while prices up 337 rupees, now Crude oil is getting support at 8298 and below same could see a test of 8085 levels, and resistance is now likely to be seen at 8641, a move above could see prices testing 8771.
Trading Ideas:
Crude oil trading range for the day is 8085-8771.
Crude oil rose amid concerns of further supply disruptions from Russia.
The prospect of an EU ban on Russian oil continued to buoy prices
OPEC cuts 2022 world oil demand forecast again on Ukraine war

Nat.Gas

Nat.Gas yesterday settled down by -0.95% at 592.6 on forecasts for milder weather and lower demand in two weeks and a 3% decline in European gas futures even though exports from Russia fell due to sanctions and the shutdown of a pipe in Ukraine. That U.S. price decrease came even as Texas prepares for another heatwave early next week that will boost power demand for air conditioning. 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. Refinitiv projected average U.S. gas demand, including exports, would slide from 90.5 bcfd this week to 89.8 bcfd next week and 89.5 bcfd in two weeks. The forecast for next week was higher than Refinitiv's outlook on Thursday. 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. Since the United States will not be able to produce much more LNG anytime soon, it has worked with allies to divert LNG exports from elsewhere to Europe to help European Union (EU) countries and others break their dependence on Russian gas. Technically market is under long liquidation as market has witnessed drop in open interest by -7.91% to settled at 4099 while prices down -5.7 rupees, now Natural gas is getting support at 578.8 and below same could see a test of 565 levels, and resistance is now likely to be seen at 610.1, a move above could see prices testing 627.6.
Trading Ideas:
Natural gas trading range for the day is 565-627.6.
Natural gas slid on forecasts for milder weather and lower demand in two weeks
That U.S. price decrease came even as Texas prepares for another heatwave early next week that will boost power demand for air conditioning.
The U.S. EIA said utilities added 76 billion cubic feet (bcf) of gas to storage during the week ended May 6.


Copper

Copper yesterday settled up by 1.1% at 752.95 as support seen after copper inventory across major Chinese markets dropped 2,600 mt from Monday to 118,900 mt, a decrease of 1,100 mt from last Friday. In the week, prices remained under pressure as fears over a global economic slowdown cast a shadow on demand outlook. Shanghai was aiming to reach "zero-COVID" at the community level in the next few days and will then start to steadily ease traffic restrictions and open shops. Major central banks, including the U.S. Federal Reserve, have been raising interest rates to tackle soaring inflation, stoking economic slowdown concerns. Data showing higher-than-expected rise in U.S. consumer prices in April has fanned fears of aggressive policy tightening by the Fed. Prolonged COVID-19 lockdowns in top metals consumer China have also dented market sentiment. Beijing denied it was heading for lockdown as panic buying gripped the capital, while Shanghai combed the city for lingering COVID-19 cases in the hope of clearing the way to escape from weeks of painful restrictions. Calling stable prices the "bedrock" of the economy, Fed Chair Jerome Powell said the U.S. central bank's battle to control inflation would "include some pain" as the impact of higher interest rates is felt, but that the worse outcome would be for prices to continue speeding ahead. Technically market is under short covering as market has witnessed drop in open interest by -15.41% to settled at 3792 while prices up 8.2 rupees, now Copper is getting support at 742.5 and below same could see a test of 731.9 levels, and resistance is now likely to be seen at 759.3, a move above could see prices testing 765.5.
Trading Ideas:
Copper trading range for the day is 731.9-765.5.
Copper gains as support seen after copper inventory across major Chinese markets dropped 2,600 mt from Monday to 118,900 mt
Copper stocks in warehouses approved by the LME, which have climbed 35% so far this year to 177,000 tonnes.
The smelters in east China started to carry out maintenance, and the production efficiency was low with the absence of supplement from imports.

Zinc

Zinc yesterday settled up by 0.64% at 308.25 as total zinc ingots inventories across seven markets in China stood at 266,900 mt as of Friday May 13, down 9,100 mt from May 9 and 14,200 mt from May 5. However upside seen limited on mounting fears that a global economic slowdown would dampen demand. U.S. Federal Reserve Chairman Jerome Powell said an economic "soft landing" might be determined by factors that the central bank could not control, adding the battle to rein in inflation would "include some pain". Shanghai was aiming to reach "zero-COVID" at the community level in the next few days and will then start to steadily ease traffic restrictions and open shops. Major central banks, including the U.S. Federal Reserve, have been raising interest rates to tackle soaring inflation, stoking economic slowdown concerns. China's refined zinc output rose in April from the previous month, state as COVID-related transportation disruptions eased and new capacity started up. Smelters produced 438,000 tonnes of zinc last month, up by 11,000 tonnes from a revised output of 427,000 tonnes in March and 0.2% higher than a year earlier. The increase mainly stemmed from new capacity additions and the resumption of output in Hunan, Gansu and Qinghai provinces and the Guangxi region, Antaike said, adding that transportation issues caused by movement restrictions to control COVID-19 outbreaks had gradually smoothed out in late April. Technically market is under short covering as market has witnessed drop in open interest by -11.67% to settled at 1120 while prices up 1.95 rupees, now Zinc is getting support at 303 and below same could see a test of 297.7 levels, and resistance is now likely to be seen at 311.6, a move above could see prices testing 314.9.
Trading Ideas:
Zinc trading range for the day is 297.7-314.9.
Zinc gains as total zinc ingots inventories across seven markets in China stood at 266,900 mt as of Friday May 13, down 9,100 mt
Shanghai was aiming to reach "zero-COVID" at the community level in the next few days and will then start to steadily ease traffic restrictions and open shops.
China's refined zinc output rose in April from the previous month


Aluminium

Aluminium yesterday settled up by 1.74% at 236.35 as the social aluminium inventory kept falling, and shipments across the country have been smooth. Meanwhile, more manufacturers resumed work and production with the ease of pandemic, and downstream consumption was also boosted in the short term. On the macro front, the US PPI rose 11% year-on-year in April and the US CPI in April was 8.3%, exceeding market expectations. US inflationary pressures remain strong and Biden said curbing inflation is still the first priority, so the market expects more aggressive rate hikes from the Fed. As such, the dollar index hit a new 20-year high of 104.93. Powell, who was nominated for re-election as Fed chairman, reiterated that a 50 basis point hike in each of the next 2 meetings was reasonable and that more measures would be taken if the situation got worse. Aluminium ingot social inventory across eight major markets in China totalled 1 million mt, down 30,000 mt from a week ago and 58,000 mt lower than a year ago. Shipments were smooth across many regions, and traders were also more motivated to sell. The domestic aluminium billet inventory stood at 138,700 mt as of May 12, an increase 10,100 mt or 7.84% from a week ago. Technically market is under fresh buying as market has witnessed gain in open interest by 5.4% to settled at 2636 while prices up 4.05 rupees, now Aluminium is getting support at 232.1 and below same could see a test of 227.8 levels, and resistance is now likely to be seen at 238.7, a move above could see prices testing 241.
Trading Ideas:
Aluminium trading range for the day is 227.8-241.
Aluminium recovered as the social aluminium inventory kept falling, and shipments across the country have been smooth.
The US PPI rose 11% year-on-year in April and the US CPI in April was 8.3%, exceeding market expectations.
Aluminium ingot social inventory across eight major markets in China totalled 1 million mt, down 30,000 mt from a week ago

Mentha oil

Mentha oil yesterday settled down by -0.57% at 1124.4 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 gained by 9.3 Rupees to end at 1237.6 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -2.62% to settled at 967 while prices down -6.5 rupees, now Mentha oil is getting support at 1116.9 and below same could see a test of 1109.4 levels, and resistance is now likely to be seen at 1133.5, a move above could see prices testing 1142.6.
Trading Ideas:
Mentha oil trading range for the day is 1109.4-1142.6.
In Sambhal spot market, Mentha oil gained  by 9.3 Rupees to end at 1237.6 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% at 8352 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 8541.2 Rupees gained 22.95 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 5.25% to settled at while prices down -84 rupees, now Turmeric is getting support at 8274 and below same could see a test of 8196 levels, and resistance is now likely to be seen at 8470, a move above could see prices testing 8588.
Trading Ideas:
Turmeric trading range for the day is 8196-8588.
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 8541.2 Rupees gained 22.95 Rupees.

Jeera

Jeera yesterday settled up by 0.92% at 21990 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 3.11% to settled at while prices up 200 rupees, now Jeera is getting support at 21770 and below same could see a test of 21545 levels, and resistance is now likely to be seen at 22240, a move above could see prices testing 22485.
Trading Ideas:
Jeera trading range for the day is 21545-22485.
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 remain unchangeby 0% at 48640 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 460 Rupees to end at 48270 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 0.71% to settled at 2991 while prices remain unchanged 0 rupees, now Cotton is getting support at 48330 and below same could see a test of 48030 levels, and resistance is now likely to be seen at 49100, a move above could see prices testing 49570.
Trading Ideas:
Cotton trading range for the day is 48030-49570.
Cotton extended gains 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 460 Rupees to end at 48270 Rupees.

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