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Gold

Gold yesterday settled up by 0.34% at 50822 as the dollar weakened, with gains capped by higher U.S. Treasury yields as investors focus on the ECB central bankers' forum in Portugal. Prospects of interest rate hikes, especially by the U.S. Federal Reserve, which tend to raise bond yields and increase the opportunity cost of holding gold kept the metal's gains in check. With the ECB set to raise rates for the first time in a decade next month, President Christine Lagarde said the central bank will move gradually but with the option to act decisively on any deterioration in medium-term inflation. As farmers are spending more on seeds, agrochemicals and other farm activities for the ongoing kharif season, rural demand for gold slipped by a quarter in June and the trend is likely to continue in July, industry executives said. Prices of agricultural inputs have gone up this kharif season, putting pressure on the pockets of the agrarian community. "Rural demand is down 25% in June as farmers are busy in sowing kharif crop and buying seeds and other agricultural inputs. July will also be similar. The demand will return in August during Ganesh Chaturthi," said Ashish Pethe, chairman, All India Gem & Jewellery Domestic Council. Technically market is under short covering as market has witnessed drop in open interest by -2.32% to settled at 11497 while prices up 173 rupees, now Gold is getting support at 50630 and below same could see a test of 50439 levels, and resistance is now likely to be seen at 50986, a move above could see prices testing 51151.

Trading Ideas:
* Gold trading range for the day is 50439-51151.
* Gold edged up as the dollar weakened, with gains capped by higher U.S. Treasury yields
* Fed's Williams: rates need to rise, don't see recession
* ECB's Lagarde says inflation in Euro area undesirably high

Silver

Silver yesterday settled down by -0.63% at 60193 as softening inflation expectations prompted investors to reassess bets that the Federal Reserve will continue to aggressively raise interest rates. New York Federal Reserve Bank President John Williams called for further rapid interest-rate hikes to slow the economy and inflation, including a possible second 75-basis point rate hike next month, but said he does not expect a U.S. recession. By the end of the year, Williams said in an interview on CNBC, interest rates "definitely" need to be between 3% and 3.5%, adding that at this point it looks "perfectly reasonable" for the Fed's policy rate to get to between 3.5%-4% next year, a level where it will restrict economic growth. China halved the length of mandatory quarantine for inbound travelers, in the biggest relaxation of entry restrictions after sticking to a rigid COVID policy throughout the pandemic. The relaxation of the country's 'zero-COVID' policy came after Beijing and Shanghai reported no new local COVID-19 infections for the first time in months. Meanwhile, in a speech at the ECB forum on central banking in Sintra, Portugal, ECB President Christine Lagarde played down fears of a recession in the euro zone. "We have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum," Lagarde said. Technically market is under fresh selling as market has witnessed gain in open interest by 38.84% to settled at 13499 while prices down -379 rupees, now Silver is getting support at 59844 and below same could see a test of 59494 levels, and resistance is now likely to be seen at 60847, a move above could see prices testing 61500.

Trading Ideas:
* Silver trading range for the day is 59494-61500.
* Silver dropped as softening inflation expectations prompted investors to reassess bets that the Federal Reserve will continue to aggressively raise interest rates.
* Fed’s Williams called for further rapid interest-rate hikes to slow the economy and inflation, including a possible second 75-basis point rate hike next month
* ECB President Christine Lagarde played down fears of a recession in the euro zone.

Crude oil

Crude oil yesterday settled up by 2.01% at 8812 after the United Arab Emirates' energy minister said the nation is producing near capacity, countering expectations that it could help boost supply in a tight market. The UAE and Saudi Arabia have been seen as the only two countries in the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity available to make up for lost Russian supply and weak output from other member nations. UAE Energy Minister Suhail al-Mazrouei said UAE was producing near maximum capacity based on its quota of 3.168 million barrels per day (bpd) under the agreement with OPEC and its allies, together called OPEC+. Libya's National Oil Corp said it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there. China has issued 52.66 million tonnes of crude oil import quotas to non-state refiners in a second batch of allotments for 2022, up 49% from the same slot last year. The new allowances bring China's total non-state import quotas to 161.69 million tonnes by far this year, comparing to 157.83 million tonnes during the same period in 2021. Ecuador's Energy Ministry said the country could suspend oil output completely within the next two days amid anti-government protests. Technically market is under fresh buying as market has witnessed gain in open interest by 15.64% to settled at 8058 while prices up 174 rupees, now Crude oil is getting support at 8699 and below same could see a test of 8585 levels, and resistance is now likely to be seen at 8893, a move above could see prices testing 8973.

Trading Ideas:
* Crude oil trading range for the day is 8585-8973.
* Crude oil prices rose after UAE’s energy minister said the nation is producing near capacity, countering expectations that it could help boost supply in a tight market.
* Libya's NOC said it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.
* China issues second batch of crude oil import quotas for private refiners

Natural Gas

Nat.Gas yesterday settled up by 4.77% at 531.9 on a preliminary drop in daily output and forecasts for hotter weather over the next two weeks that will prompt power generators to burn more gas to keep air conditioners humming. That increase also came on the last day of trade for the July futures contract, which is often a volatile day since trade volume is extremely low. Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 95.1 billion cubic feet per day (bcfd) so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. On a daily basis, output was on track to drop 1.8 bcfd to a preliminary two-week low of 94.3 bcfd on Tuesday. That would be its biggest daily output drop since early February, but preliminary data is often revised higher later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.0 bcfd this week to 95.9 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Monday due to lower than previously expected LNG exports. Technically market is under fresh buying as market has witnessed gain in open interest by 6.18% to settled at 3816 while prices up 24.2 rupees, now Natural gas is getting support at 516 and below same could see a test of 500.2 levels, and resistance is now likely to be seen at 541.2, a move above could see prices testing 550.6.

Trading Ideas:
* Natural gas trading range for the day is 500.2-550.6.
* Natural gas edged up on a preliminary drop in daily output and forecasts for hotter weather over the next two weeks
* That increase also came on the last day of trade for the July futures contract, which is often a volatile day since trade volume is extremely low.
* The Freeport shutdown on June 8 should allow U.S. utilities to quickly rebuild low gas stockpiles for next winter.

Copper

Copper yesterday settled up by 0.82% at 704.95 alongside a rebound in equities and hopes of more economic stimulus in top metals consumer China, although lingering recession fears kept gains in check. China will roll out tools in its policy reserve in a timely way to cope with economic challenges, a state planner official said. Expectations of rapid interest rate hikes by major central banks, including the U.S. Federal Reserve, to combat soaring inflation have battered equities and commodities in recent weeks. Beijing said it would allow schools to resume in-person classes and Shanghai's top party boss declared victory over COVID-19. Chilean state-owned Codelco will adjust its strategy to produce more sustainable copper and meet the Andean country's growing environmental demands. China's economy has recovered to some extent, but its foundation is not solid, state media quoted Premier Li Keqiang as saying. China will strive to drive the economy back onto a normal track and bring down the jobless rate as soon as possible, Li was quoted as saying. "Currently, the implementation of the policy package to stabilise the economy is accelerating and taking effect. The economy has recovered on the whole, but the foundation is not yet solid," Li was quoted as saying. "The task of stabilising employment remains arduous." Technically market is under short covering as market has witnessed drop in open interest by -5.51% to settled at 5422 while prices up 5.7 rupees, now Copper is getting support at 697.8 and below same could see a test of 690.6 levels, and resistance is now likely to be seen at 712.4, a move above could see prices testing 719.8.

Trading Ideas:
* Copper trading range for the day is 690.6-719.8.
* Copper prices rose alongside a rebound in equities and hopes of more economic stimulus in top metals consumer China
* China will roll out tools in its policy reserve in a timely way to cope with economic challenges, a state planner official said.
* Chilean state-owned Codelco will adjust its strategy to produce more sustainable copper and meet the Andean country's growing environmental demands.

Zinc

Zinc yesterday settled up by 1.47% at 300.8 as the macro sentiment has been boosted by a series of bullish news. The National Development and Reform Commission (NDRC) said that the country is capable of dealing with changes beyond expectations in the face of the 5.5% GDP growth target. On the macro front, despite the recent intensification of concerns over economic recession in the market, the US core durable goods orders grew by 0.5% in May, adding credibility to Fed Chairman Powell's assertion that the economy is strong enough to withstand interest rate hikes to curb the impact of inflation, which is at multi-decade highs, and will not fall into recession. As such, the market sentiment has picked up. On the macro front, the National Health Commission said that the quarantine period for COVID-related close contacts and inbound persons will be adjusted from "14 days of medical observation + 7 days of home health monitoring" to "7 days + 3 days ". China's economy has recovered to some extent, but its foundation is not solid, state media quoted Premier Li Keqiang as saying. China will strive to drive the economy back onto a normal track and bring down the jobless rate as soon as possible, Li was quoted as saying. Technically market is under short covering as market has witnessed drop in open interest by -4.52% to settled at 1583 while prices up 4.35 rupees, now Zinc is getting support at 297.3 and below same could see a test of 293.7 levels, and resistance is now likely to be seen at 303.9, a move above could see prices testing 306.9.

Trading Ideas:
* Zinc trading range for the day is 293.7-306.9.
* Zinc rose as the macro sentiment has been boosted by a series of bullish news.
* Zinc prices further supported by lingering supply tightness.
* The NDRC said that the country is capable of dealing with changes beyond expectations in the face of the 5.5% GDP growth target.

Aluminium

Aluminium yesterday settled up by 0.4% at 212.75 as aluminium ingot inventory dropped 5,000 mt to 746,000 mt with less arrivals last week. The aluminium billet inventory also dropped amid less arrivals and centralised restocking across the downstream. The market pessimism, triggered by aggressive rate hikes in Europe and the US as well as less-than-expected economic readings, has been digested to some extent. China's monetary policy will continue to be accommodative to support economic recovery, People's Bank of China Governor Yi Gang was quoted by state media as saying. China's real interest rates are pretty low considering inflation, Yi told China. China's outstanding green loans exceeded 18 trillion yuan ($2.69 trillion) as of March, while outstanding green bonds reached about 1.3 trillion yuan, Yi said a transcript of the interview posted on the central bank's website. The People’s Bank of China injected a total CNY 100 billion into the banking system, the largest daily injection since March 31, via seven-day reverse repurchase at a rate 2.1%. to ease pressure from rising cash demand toward the end of the first half of the year. With CNY 10 billion worth of such reverse repos due on Monday, the PBOC net injected CNY 90 billion on the day. The PBOC started pumping more cash into the financial system last Friday. Technically market is under short covering as market has witnessed drop in open interest by -1.77% to settled at 2770 while prices up 0.85 rupees, now Aluminium is getting support at 210.8 and below same could see a test of 208.9 levels, and resistance is now likely to be seen at 215.2, a move above could see prices testing 217.7.

Trading Ideas:
* Aluminium trading range for the day is 208.9-217.7.
* Aluminium gained as aluminium ingot inventory dropped 5,000 mt to 746,000 mt with less arrivals last week.
* PBoC makes biggest daily cash injection in 3 months
* China's c.bank will continue to support economic recovery

Mentha oil

Mentha oil yesterday settled down by -0.91% at 1016.3 as synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. However downside seen limited amid low production this season and improving demand post-pandemic. 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. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year we forecast production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. 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. In Sambhal spot market, Mentha oil gained by 14.8 Rupees to end at 1151.1 Rupees per 360 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 0.17% to settled at 1209 while prices down -9.3 rupees, now Mentha oil is getting support at 1007.9 and below same could see a test of 999.4 levels, and resistance is now likely to be seen at 1029.3, a move above could see prices testing 1042.2.

Trading Ideas:
* Mentha oil trading range for the day is 999.4-1042.2.
* In Sambhal spot market, Mentha oil gained  by 14.8 Rupees to end at 1151.1 Rupees per 360 kgs.
* Mentha oil dropped as Synthetic Mentha supply remains uninterrupted
* Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry.
* However downside seen limited amid low production this season and improving demand post-pandemic.

Turmeric

Turmeric yesterday settled up by 0.51% at 7898 as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses. However upside seen limited amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes while for the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average. Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased. Kocha arrivals are good at markets in Sangli, Hingoli and Nanded regions in Maharashtra. Due to aggressive coverages by oleoresin companies, prices were steady during the month. Panangali arrivals have started in Salem, Erode and Gundalpet markets. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. 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. In Nizamabad, a major spot market in AP, the price ended at 8000.35 Rupees dropped -107.95 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.49% to settled at 15070 while prices up 40 rupees, now Turmeric is getting support at 7842 and below same could see a test of 7788 levels, and resistance is now likely to be seen at 7948, a move above could see prices testing 8000.

Trading Ideas:

* Turmeric trading range for the day is 7788-8000.
* Turmeric gains as arrivals of New season turmeric are diminishing and exports demand is improving as season progresses.
* However upside seen limited amid reports of sufficient stocks and good sowing progress in south India is pressurizing the prices.
* As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes
* In Nizamabad, a major spot market in AP, the price ended at 8000.35 Rupees dropped -107.95 Rupees.

Jeera

Jeera yesterday settled up by 0.23% at 21370 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. Support also seen as because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving. Similarly, in Rajasthan also daily arrivals have remained weak, in Jodhpur market around 1,500 bags, at Nagaur 500 bags and other centres 500 bags arrivals noted. In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year. The arrival of cumin in Rajasthan has been only 50% in the peak season in the current year as compared to the previous years as the crop was less. There was a drought in Turkey and Syria and due to state tensions, the sowing of cumin seeds has been reported to be very low. Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan. In Unjha, a key spot market in Gujarat, jeera edged up by 114.6 Rupees to end at 21501.75 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -3.89% to settled at 11337 while prices up 50 rupees, now Jeera is getting support at 21265 and below same could see a test of 21160 levels, and resistance is now likely to be seen at 21460, a move above could see prices testing 21550.

Trading Ideas:
* Jeera trading range for the day is 21160-21550.
* Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
* In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year.
* Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan.
* In Unjha, a key spot market in Gujarat, jeera edged up by 114.6 Rupees to end at 21501.75 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 1.47% at 42120 as Cotton sowing fall nearly 14.76% with 31.83 lakh hectares of area sown against area of 37.37 lakh hectares in 2021. There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns. Kharif cotton sowing for the season in Gujarat is likely to increase by at least 15% compared to the previous season amid a rush to sow the crop well ahead of its schedule. Farmers had got good prices for cotton in domestic and international markets last season. Indian Meteorological Department (IMD) in its forecast for next five days has said gradual maximum temperature is likely to rise by 2-4 degree centigrade over most parts of northwest India and Madhya Pradesh. Between June 27 and 29, scattered to fairly widespread rainfall is likely over peninsular India and east India, while there could be an increase in rainfall over northwest and central India, it said. The Cotton Association of India (CAI), is bullish about the sowing prospects this kharif season. “Sowing will increase by 12 per cent and go up to 133-135 lakh hectares from last year’s 120 lakh,” said Atul Ganatra, President, CAI. In spot market, Cotton dropped by -30 Rupees to end at 45160 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.44% to settled at 1599 while prices up 610 rupees, now Cotton is getting support at 41700 and below same could see a test of 41290 levels, and resistance is now likely to be seen at 42420, a move above could see prices testing 42730.

Trading Ideas:
* Cotton trading range for the day is 41290-42730.
* Cotton gained as Cotton sowing fall nearly 14.76% with 31.83 lakh hectares of area sown against area of 37.37 lakh hectares in 2021.
* Sowing will increase by 12 per cent and go up to 133-135 lakh hectares from last year’s 120 lakh – CAI
* There is a rush among farmers in Gujarat for sowing cotton in anticipation of good returns.
* In spot market, Cotton dropped  by -30 Rupees to end at 45160 Rupees.
 

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