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Gold

Gold yesterday settled up by 0.47% at 50822 as data showed the annual rate of U.S. consumer price growth slowed by less than expected in the month of April. Both core and headline inflation rates declined less than expected in April, remaining close to four-decade highs, which supported prospects that Fed will continue to raise interest rates sharply to reign in on persistently high inflation. As 50 basis point increases in the fed funds rate are on the table during the next two policy meetings in June and July, some Federal Reserve officials may be considering bigger hikes going forward. “We don’t rule out 75 forever,” Cleveland Fed President Loretta Mester said in an interview this week. “When we get to that point in the second half of the year, if we don’t have inflation moving down we may have to speed up.”, she added. The Federal Reserve raised the target for the fed funds rate by half a point to 0.75%-1% during the May meeting, the second consecutive rate hike and the biggest rise in borrowing costs since 2000, aiming to tackle soaring inflation. Investors are increasingly betting the ECB will start raising borrowing costs in July. The Perth Mint's gold product sales in April fell 34% from the previous month, while silver sales rose, the refiner said. Monthly sales of gold coins and minted bars fell to 80,941 ounces from 121,997 ounces in March. Technically market is under short covering as market has witnessed drop in open interest by -6.97% to settled at 7832 while prices up 236 rupees, now Gold is getting support at 50466 and below same could see a test of 50111 levels, and resistance is now likely to be seen at 51032, a move above could see prices testing 51243.
Trading Ideas:
Gold trading range for the day is 50111-51243.
Gold climbed higher as data showed the annual rate of U.S. consumer price growth slowed by less than expected in the month of April.
Both core and headline inflation rates declined less than expected in April, remaining close to four-decade highs
As 50 basis point increases in the fed funds rate are on the table during the next two policy meetings in June and July

Silver

Silver yesterday settled up by 0.22% at 60752 after a knee-jerk retreat immediately after the release of U.S. inflation data, as the dollar slipped with investors latching on to a slight cooling of consumer prices. U.S. consumer price growth slowed sharply in April as gasoline prices eased off record highs, suggesting that inflation has probably peaked, though it is likely to stay hot for a while and keep the Federal Reserve's foot on the brakes to cool demand. The consumer price index rose 0.3% last month, the smallest gain since last August, the Labor Department. That stood in sharp contrast to the 1.2% month-to-month surge in the CPI in March, which was the largest advance since September 2005. The first-rate hike will take place sometime after the end of net asset purchases which could mean a period of only a few weeks, ECB President Lagarde said during a conference in Ljubljana. The ECB confirmed during its April meeting that it will conclude its net asset purchases in the third quarter. Investors are currently expecting the ECB to raise rates by 25bps in both July and September while delivering another increase at the end of the year as inflation in the Euro Area is running more than 3 times above the central bank target of 2% and will likely stay high for some time. Technically market is under short covering as market has witnessed drop in open interest by -3.51% to settled at 15762 while prices up 134 rupees, now Silver is getting support at 60126 and below same could see a test of 59500 levels, and resistance is now likely to be seen at 61476, a move above could see prices testing 62200.
Trading Ideas:
Silver trading range for the day is 59500-62200.
Silver rose after a knee-jerk retreat immediately after the release of U.S. inflation data, as the dollar slipped with investors latching on to a slight cooling of consumer prices.
U.S. consumer price growth slowed sharply in April as gasoline prices eased off record highs, suggesting that inflation has probably peaked.
The consumer price index rose 0.3% last month, the smallest gain since last August, the Labor Department.

Crude oil

Crude oil yesterday settled up by 5.17% at 8155 amid prospects of strong oil demand after coronavirus cases in China declined while the EU continues to work to move ahead with an embargo on Russian oil. US crude inventories rose by 1.618 million barrels in the previous week, compared to forecasts of a 0.457 million barrels decrease. Russian gas flows to Europe via Ukraine fell by a quarter after Kyiv halted use of a major transit route blaming interference by occupying Russian forces, the first time exports via Ukraine have been disrupted since the invasion. Oil also gained on hopes of Chinese economic stimulus, after China's factory-gate inflation eased and investors took comfort in signs of lower domestic COVID-19 infections. A backdrop of tight supply because of what major producers say is partly a result of inadequate investment remains supportive for oil. Technically market is under fresh buying as market has witnessed gain in open interest by 64.2% to settled at 6128 while prices up 401 rupees, now Crude oil is getting support at 7903 and below same could see a test of 7650 levels, and resistance is now likely to be seen at 8319, a move above could see prices testing 8482.
Trading Ideas:
Crude oil trading range for the day is 7650-8482.
Crudeoil rose amid prospects of strong oil demand after coronavirus cases in China declined while the EU continues to work to move ahead with an embargo on Russian oil.
 U.S. crude stocks rose while gasoline and distillate inventories fell last week, the Energy Information Administration
Angola oil Minister: OPEC is very important to the country and we are doing our best to fulfil our commitments

Nat.Gas

Nat.Gas yesterday settled up by 4.94% at 590.9 on a big drop in daily output over the past three days and forecasts for more demand this week than previously expected. The shutdown of a pipeline carrying Russian gas through Ukraine also helped support U.S. gas futures and temporarily lifted European prices. The U.S. gas market remains mostly shielded from those higher global prices because the United States is the world's top gas producer, with all the fuel it needs for domestic use while capacity constraints inhibit exports of more LNG no matter how high global prices rise. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.7 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 about 2.5 bcfd over the past three days to a preliminary two-week low of 93.5 bcfd on Wednesday due mostly to declines in Texas. Preliminary data is often revised. Refinitiv projected average U.S. gas demand, including exports, would slide from 90.5 bcfd this week to 89.9 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Tuesday, while its outlook for next week was lower. Technically market is under fresh buying as market has witnessed gain in open interest by 20.82% to settled at 4323 while prices up 27.8 rupees, now Natural gas is getting support at 572.4 and below same could see a test of 553.8 levels, and resistance is now likely to be seen at 603.2, a move above could see prices testing 615.4.
Trading Ideas:
Natural gas trading range for the day is 553.8-615.4.
Natural gas gained on a big drop in daily output over the past three days and forecasts for more demand this week than previously expected.
The shutdown of a pipeline carrying Russian gas through Ukraine also helped support U.S. gas futures and temporarily lifted European prices.
U.S. natgas output, demand to rise in 2022 – EIA


Copper

Copper yesterday settled up by 0.35% at 755.95 as signs of lower domestic COVID-19 infections in China lifted sentiment, although demand outlook remained weak due to worries over the prospect of global economic slowdown. Continued lockdowns in China, the world's top metals consumer, and worries over aggressive U.S. policy tightening this year have weighed on base metals, with copper hitting its lowest in nearly five months this week. China's factory-gate inflation eased to a one-year low in April, giving policymakers headroom for more stimulus to shore up a flagging economy. China's producer prices rose at the slowest pace in a year in April, despite a surge in global commodity prices, leaving room for more stimulus to shore up the flagging economy, which faces pressure from heavy COVID-19 curbs. Peru's government failed to reach an agreement with a group of indigenous communities whose protests have halted operations at MMG Ltd's massive Las Bambas copper mine. China's April copper cathode output fell on both a monthly and annual basis, as maintenance and the COVID-19 outbreak in the country curbed smelters from producing more metal. China's copper imports in April fell 4% from the same month a year earlier as demand slumped, data from the General Administration of Customs showed. Technically market is under short covering as market has witnessed drop in open interest by -3.43% to settled at 4162 while prices up 2.6 rupees, now Copper is getting support at 751.4 and below same could see a test of 746.7 levels, and resistance is now likely to be seen at 761.6, a move above could see prices testing 767.1.
Trading Ideas:
Copper trading range for the day is 746.7-767.1.
Copper rose as signs of lower domestic COVID-19 infections in China lifted sentiment.
China's factory-gate inflation eased to a one-year low in April, giving policymakers headroom for more stimulus to shore up a flagging economy.
China's April copper cathode output fell on both a monthly and annual basis

Zinc

Zinc yesterday settled up by 2.05% at 316.75 buoyed by shortages and low stocks in London Metal Exchange-approved warehouses, but slowing growth and demand in top consumer China are expected to weigh on the metal used to galvanise steel. Support also seen on worries about supplies, particularly in Europe where record-high power prices have triggered production cuts. Zinc stocks in LME warehouses at 88,475 tonnes are at two-year lows. But cancelled warrants – metal earmarked for delivery – at 58% of the total suggest a tighter LME market as more zinc is due to leave warehouses. Bank of America analyst Michael Widmer expects zinc supplies this year to meet demand compared with a surplus of 386,000 tonnes last year and a deficit of 42,000 tonnes next year. Shrinking manufacturing activity in China due to COVID lockdowns, slowing export growth and stagnant imports are behind the recent sell-off. In April 2022, China refined zinc output stood at 495,500mt, with a decrease of 400 mt MoM or 0.08% and a decrease of 1.89% YoY. From January to April 2022, the combined refined zinc output was 1.967 million mt, a decrease of 1.89% year on year. In addition, the output in March was revised to 495,900 mt, an increase of 8.19% MoM and a decrease of 0.19% YoY. Technically market is under fresh buying as market has witnessed gain in open interest by 4.11% to settled at 1216 while prices up 6.35 rupees, now Zinc is getting support at 311.6 and below same could see a test of 306.5 levels, and resistance is now likely to be seen at 320.9, a move above could see prices testing 325.1.
Trading Ideas:
Zinc trading range for the day is 306.5-325.1.
Zinc prices buoyed by shortages and low stocks in London Metal Exchange-approved warehouses
Support also seen on worries about supplies, particularly in Europe where record-high power prices have triggered production cuts.
But slowing growth and demand in top consumer China are expected to weigh on the metal used to galvanise steel.


Aluminium

Aluminium yesterday settled up by 0.24% at 232.55 as signs of lower domestic COVID-19 infections in China lifted sentiment, although demand outlook remained weak due to worries over the prospect of global economic slowdown. Continued lockdowns in China, the world's top metals consumer, and worries over aggressive U.S. policy tightening this year have weighed on base metals, with copper hitting its lowest in nearly five months this week. China's factory-gate inflation eased to a one-year low in April, giving policymakers headroom for more stimulus to shore up a flagging economy. Aluminium smelters will keep ramping up their production in the near term. On the demand side, production resumption accelerated after the COVID eased, boosting market confidence. According to data released by the London Metal Exchange (LME), LME aluminium inventories have continued to fall recently. Since the inventory surged by 119,000 mt to 880,975 mt on February 10, it has opened a downward channel again. The latest inventory level was 560,275 mt on May 10, a new low in nearly 17 years. SHFE aluminium inventories ended three consecutive weeks of declines, and the weekly inventory increased by 1.72% to 295,137 mt as of May 6, which was relatively low in two and a half months. Technically market is under fresh buying as market has witnessed gain in open interest by 0.93% to settled at 2708 while prices up 0.55 rupees, now Aluminium is getting support at 231.5 and below same could see a test of 230.3 levels, and resistance is now likely to be seen at 234.4, a move above could see prices testing 236.1.
Trading Ideas:
Aluminium trading range for the day is 230.3-236.1.
Aluminium rose as signs of lower domestic COVID-19 infections in China lifted sentiment
Although demand outlook remained weak due to worries over the prospect of global economic slowdown.
China's factory-gate inflation eased to a one-year low in April, giving policymakers headroom for more stimulus to shore up a flagging economy.

Mentha oil

Mentha oil yesterday settled down by -0.05% at 1133.1 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 4 Rupees to end at 1225.9 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -2.33% to settled at 1006 while prices down -0.6 rupees, now Mentha oil is getting support at 1125.4 and below same could see a test of 1117.6 levels, and resistance is now likely to be seen at 1138, a move above could see prices testing 1142.8.
Trading Ideas:
Mentha oil trading range for the day is 1117.6-1142.8.
In Sambhal spot market, Mentha oil gained  by 4 Rupees to end at 1225.9 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 up by 1.99% at 8396 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 8496.3 Rupees gained 66.1 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 11.8% to settled at 14165 while prices up 164 rupees, now Turmeric is getting support at 8232 and below same could see a test of 8070 levels, and resistance is now likely to be seen at 8496, a move above could see prices testing 8598.
Trading Ideas:
Turmeric trading range for the day is 8070-8598.
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 8496.3 Rupees gained 66.1 Rupees.

Jeera

Jeera yesterday settled up by 1.19% at 21200 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 158.75 Rupees to end at 21416.95 Rupees per 100 kg.Technically market is under fresh buying as market has witnessed gain in open interest by 4.28% to settled at 13884 while prices up 250 rupees, now Jeera is getting support at 21000 and below same could see a test of 20805 levels, and resistance is now likely to be seen at 21340, a move above could see prices testing 21485.
Trading Ideas:
Jeera trading range for the day is 20805-21485.
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 158.75 Rupees to end at 21416.95 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.65% at 47750 due to concerns over production, slow arrivals, better domestic and exports demand. Domestic cotton arrivals down 25% or 88.95 lakh bales so far this season to around 238 lakh bales compared to last year. The Cotton Association of India has reduced its cotton crop estimate for the 2021-22 season by 8.00 lakh bales to 33.5 million bales from its previous estimate of 34.3 million bales. (One bale=170 kgs.) In the past three months, they have revised the production estimate by 23 lakh bales from their original estimate of 36 million bales. The domestic consumption for the crop year 2021-22 has been reduced by the CAI by 5 lakh bales to 34 million bales. Ending stock as of 30th September 2022 is estimated by the Committee at 4 million bales versus the previous year’s level of 7.5 million bales. Union Minister for Commerce and Industry and Textiles Piyush Goyal will hold a meeting with stakeholders of the cotton textiles value chain on Wednesday in New Delhi. According to Textiles Secretary Upendra Prasad Singh, the Minister has planned a meeting with all stakeholders of the cotton textile sector to discuss the issue of high cotton and yarn prices, the measures that can be taken, etc. “Any decision can be taken only after the meeting,” he said. In spot market, Cotton gained by 350 Rupees to end at 47940 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -3.59% to settled at 3226 while prices up 310 rupees, now Cotton is getting support at 47430 and below same could see a test of 47100 levels, and resistance is now likely to be seen at 47950, a move above could see prices testing 48140.
Trading Ideas:
Cotton trading range for the day is 47100-48140.
Cotton prices gained from all time high level due to concerns over production, slow arrivals, better domestic and exports demand.
CAI has reduced its cotton crop estimate for the 2021-22 season by 8.00 lakh bales to 33.5 million bales
The Union government may impose a temporary ban on cotton exports if cotton prices continue to surge
In spot market, Cotton gained  by 350 Rupees to end at 47940 Rupees.

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