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Gold

Gold yesterday settled down by -0.7% at 59723 as odds that the Fed will halt its current tightening cycle or maybe lower interest rates this year decreased. While numerous Fed officials signalled that the anticipated slowdown in rate rises in June is questionable in their comments, the claims data confirmed assumptions that the employment market is still strong. The dollar and Treasury rates were supported by hope that the US debt ceiling dispute would be resolved, which put pressure on gold prices. The Richmond Fed's Thomas Barkin stated that he is not convinced that inflation is on a continuous decrease down to the United States central bank's 2% objective. A number of Fed members indicated that they expect interest rates remaining high. While demand for physical gold remained poor in other Asian hubs, some dealers in the region's largest consumer of bullion, China, offered discounts to draw customers. Demand for physical gold rose somewhat in India as local prices declined from recent record highs. In comparison to official domestic pricing, Indian dealers were providing discounts of up to $11 per ounce, a decrease from the discount of $23 last week. According to the World Gold Council, Indian demand for gold dropped 17% in the March quarter to its lowest level in 10 quarters and is expected to be low even in the June and September quarters due to record-high prices. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.06% to settle at 10749 while prices are down -422 rupees, now Gold is getting support at 59457 and below same could see a test of 59192 levels, and resistance is now likely to be seen at 60070, a move above could see prices testing 60418.

Trading Ideas:
* Gold trading range for the day is 59192-60418.
* Gold prices fell as bets the Fed will pause the current tightening cycle
* The claims report reinforced perceptions the labour market remains robust
* Comments from several Fed officials suggested the anticipated pause in rate hikes in June is uncertain

Silver

Silver yesterday settled down by -0.71% at 72143 as investors monitored the debt limit dispute and attempted to predict the Fed's next move. President Biden and congressional leaders voiced hope about a settlement and stated that the US will not default. The odds that the Fed would reduce interest rates this year decreased at the same time, as did the likelihood that rate rises will stop in June. According to Dallas Federal Reserve President Lorie Logan, the current state of the economy does not yet support stopping the cycle of rate increases. Consumer spending remained resilient, according to retail sales figures, and initial claims decreased more than was predicted. Additionally, a decrease in unemployment claims indicated that the labour market remained tight, undermining prospects for interest rate reductions in the near future. Additionally, Cleveland Fed President Loretta Mester stated that rates were not yet at a position where the central bank could maintain its current course owing to persistent inflation, while Chicago Fed President Austan Goolsbee stated that it was "far too premature to be talking about rate cuts." From an almost three-year low of -31.3 in April, the Philadelphia Fed Manufacturing Index in the US improved to -10.4 in May of 2023, above market expectations of -19.8. Philadelphia's general manufacturing activity declined overall but at its weakest rate in four months. Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.47% to settle at 14530 while prices are down -515 rupees, now Silver is getting support at 71783 and below same could see a test of 71424 levels, and resistance is now likely to be seen at 72529, a move above could see prices testing 72916.

Trading Ideas:
* Silver trading range for the day is 71424-72916.
* Silver dropped as investors follow the debt ceiling standoff
* Bets the Fed will cut rates this year fell and the chances of a pause in rate hikes in June also weakened.
* Fed’s Logan said current economic data doesn't justify yet pausing the rate hiking-cycle.

Crude oil

Crude oil yesterday settled down by -1.29% at 5957 due to yet another release from the Strategic Petroleum Reserve, US crude stocks unexpectedly increased by 5.04 million barrels last week, the biggest in twelve weeks. The International Energy Agency stated that the prognosis for a limited supply and strong demand later in the year conflict with the weeks of decreasing oil prices brought on by worries about a potential recession. The tighter market balances we foresee in the second half of the year, when demand is anticipated to exceed supply by approximately 2 million barrels per day (bpd), contrast sharply with the present market pessimism. The Paris-based organisation increased its prediction for the world's oil consumption by 200,000 barrels per day to 102 million barrels per day, saying that China's rebound following the easing of COVID-19 limitations had outperformed projections with demand hitting a record 16 million barrels per day in March. The first hint from an OPEC official about a likely move as oil prices decline came from Iraq's oil minister, Hayan Abdel-Ghani, who stated that his country does not anticipate more cutbacks to oil output from OPEC+ at its upcoming meeting in June. "There will be no additional reduction at the next meeting, which will be held on the 3rd and 4th (of June), and as for Iraq, we cannot reduce further," Abdel-Ghani stated. Technically market is under fresh selling as the market has witnessed a gain in open interest by 19.25% to settle at 8282 while prices are down -78 rupees, now Crude oil is getting support at 5920 and below same could see a test of 5884 levels, and resistance is now likely to be seen at 6018, a move above could see prices testing 6080.

Trading Ideas:
* Crude oil trading range for the day is 5884-6080.
* Crude oil dropped as US crude inventories unexpectedly jumped by 5.04 mbls
* IEA says oil price downturn ignores looming supply crunch
* Iraq does not expect OPEC+ to make further cuts at June meeting

Natural gas

Nat.Gas yesterday settled up by 7.26% at 212.7 as wildfires kept gas exports from Canada near a 25-month low. Support also seen due to concerns over a possible future decline in production after data showed that energy companies had reduced the number of rigs for drilling gas. The recent report from Baker Hughes showed that the gas rig count fell by 16 to 141 last week, the lowest since April 2022, and the biggest weekly decline since February 2016. Still, average gas output in the US Lower 48 states held steady at a record of 101.4 bcfd so far in May. However, US natural gas prices are still down by more than 40% since the beginning of 2023 and remain close to have remained near two-year lows due to warmer weather that has reduced demand while supply has remained plentiful. The weather in the US Lower 48 states is projected to switch from warmer-than-normal levels to near-normal from May 18-27, and US gas demand, including exports, is expected to fall from 91.7 billion cubic feet per day (bcfd) this week to 89.0 bcfd next week. US utilities added 99 billion cubic feet (bcf) of gas into storage during the week ended May 12, 2023, below market expectations of a 108 bcf increase. Technically market is under short covering as the market has witnessed a drop in open interest by -5.52% to settle at 25377 while prices are up 14.4 rupees, now Natural gas is getting support at 199.5 and below same could see a test of 186.4 levels, and resistance is now likely to be seen at 220.8, a move above could see prices testing 229.

Trading Ideas:
* Natural gas trading range for the day is 186.4-229.
* Natural gas rose as wildfires kept gas exports from Canada near a 25-month low.
* Support also seen due to concerns over a possible future decline in production
* US utilities added 99 billion cubic feet (bcf) of gas into storage.

Copper

Copper yesterday settled down by -0.65% at 718.5 as the U.S. dollar rose to a seven-week high, while stockpiles in warehouses listed with the London Metal Exchange (LME) continued to climb, which led to a decline in copper prices. When the world's largest consumer of metals disappointed in initial lofty expectations, the euphoria began to wane. Chinese statistics revealed April retail sales and industrial output expanded more slowly than anticipated, confirming worries about a spillover into the larger global economy. On-warrant copper stockpiles at the LME-registered warehouses reached a six-month high of 90,300 tonnes after arrivals of 3,900 tonnes, further depressing prices. In 2025–2027, the global copper concentrate market will have a severe shortfall as Asian smelters increase capacity in the absence of adequate mining developments. The demand for copper cathodes in China is expected to increase this year by 2.4% to 14.1 million tonnes, while the worldwide demand for copper will rise by 2.9% to 25.2 million tonnes. In 2023, it is predicted that the production of copper cathodes would increase by 3.5% to 25.5 million tonnes, leaving a modest 300,000-tonne market surplus. The head of the supervisors' union at Centinela Copper in Chile, owned by Antofagasta, said the union and the corporation are "very far" from reaching an agreement to prevent a strike. Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.23% to settle at 3883 while prices are down -4.7 rupees, now Copper is getting support at 714.9 and below same could see a test of 711.2 levels, and resistance is now likely to be seen at 723.3, a move above could see prices testing 728.

Trading Ideas:
* Copper trading range for the day is 711.2-728.
* Copper fell as dollar rose and LME inventories continued to rise.
* Copper concentrate market to face steep deficit from 2025
* On-warrant copper stocks in LME warehouses at 6-month peak

Zinc

Zinc yesterday settled down by -1.7% at 223.2 as the global zinc market surplus increased to 26,700 tonnes in March from 22,800 tonnes a month earlier, which led to a decline in zinc prices. According to ILZSG statistics, there was a surplus of 49,000 tonnes during the first three months of 2023 as opposed to a surplus of 116,000 tonnes during the same time period in 2022. Expectations for a significant supply rebound this year following a lengthy smelter bottleneck in 2022 are also putting pressure on zinc prices. The International Lead and Zinc Study Group (ILZSG) continues to predict that there will be a shortage of refined zinc on the world market this year, but it has reduced its projection from 150,000 tonnes at the time of its most recent statistical update in October to a more modest 45,000 tonnes. According to ILZSG's April predictions, global demand would decline by 3.9% in 2022, with China, the world's largest zinc consumer, expected to have the highest decline of 4.9%. Galvanised steel, which is frequently used in the construction and automotive industries and which both took a significant blow from China's rolling lockdowns last year, accounts for almost 60% of all zinc use. According to ILZSG, the nation's demand is anticipated to increase by 2.1% this year, keeping pace with the rest of the world. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.34% to settle at 3550 while prices are down -3.85 rupees, now Zinc is getting support at 221.6 and below same could see a test of 220 levels, and resistance is now likely to be seen at 226.1, a move above could see prices testing 229.

Trading Ideas:
* Zinc trading range for the day is 220-229.
* Zinc prices dropped as Global zinc market surplus rises
* During the first three months of 2023, ILZSG data showed a surplus of 49,000 tonnes
* Refined zinc production also fell last year to the tune of 3.8% but it will bounce back by a robust 3.1% this year

Aluminium

Aluminium yesterday settled up by 0.26% at 208.85 as China's aluminium output in April fell 1.2% from March, as power curbs in the southwest limited production of the metal. China produced 3.33 million tonnes of aluminium last month, down from 3.37 million tonnes in March, though that was up 0.8% compared with a year ago, according to data from the National Bureau of Statistics. Output growth is being capped by ongoing issues in Yunnan province, China's fourth biggest aluminium-producing province, with about 12% of the country's total capacity. Yunnan relies heavily on hydropower for power generation but has asked aluminium producers to cut production since last September amid low rainfall and water levels. Capacity of 255,000 tonnes per annum also resumed last month, mostly in the southwestern Guangxi and Guizhou regions, according to a survey by information provider Mysteel. For the first four months of the year, China produced 13.3 million tonnes of aluminium, up 3.9% from the corresponding period in 2022, the data also showed. Aluminium stocks at three major Japanese ports fell by 3.3% to 358,400 tonnes at the end of April from 370,700 tonnes at the end of March, Marubeni Corp said. Technically market is under short covering as the market has witnessed a drop in open interest by -0.86% to settle at 2994 while prices are up 0.55 rupees, now Aluminium is getting support at 207.9 and below same could see a test of 207 levels, and resistance is now likely to be seen at 209.6, a move above could see prices testing 210.4.

Trading Ideas:
* Aluminium trading range for the day is 207-210.4.
* Aluminium gains as China April output down 1.2% on power curbs
* Yunnan relies heavily on hydropower for power generation but has asked aluminium producers to cut production
* Japan aluminium stocks down 3.3% m/m in April

Mentha oil

Mentha oil yesterday settled up by 0.12% at 952.8 on low level buying after prices dropped on better sowing conditions in UP and Bihar. The recent period of rain in Uttar Pradesh and Bihar has been beneficial to planting efforts. The forecast of above-average rainfall in May would be beneficial to Mentha seeding efforts. Rising menthol imports, as well as China's limited purchasing, will put pressure on pricing. Mentha exports during Apr-Feb 2023, dropped by 10.67 percent to 2,227.55 tonnes as compared to 2,493.53 tonnes exported during Apr-Feb 2022. In February 2023 around 210.78 tonnes of Mentha was exported as against 233.21 tonnes in January 2023 showing a drop of 9.62%. In February 2023 around 210.78 tonnes of Mentha was exported as against 157.90 tonnes in February 2022 showing a rise of 33.49%. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. 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, 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. In Sambhal spot market, Mentha oil gained by 4.6 Rupees to end at 1131.6 Rupees per 360 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -12.5% to settle at 490 while prices are up 1.1 rupees, now Mentha oil is getting support at 951.2 and below same could see a test of 949.6 levels, and resistance is now likely to be seen at 955.2, a move above could see prices testing 957.6.

Trading Ideas:
* Mentha oil trading range for the day is 949.6-957.6.
* In Sambhal spot market, Mentha oil gained  by 4.6 Rupees to end at 1131.6 Rupees per 360 kgs.
* Menthaoil gains on low level buying after prices dropped on better sowing conditions in UP and Bihar.
* The forecast of above-average rainfall in May would be beneficial to Mentha seeding efforts.
* Rising menthol imports, as well as China's limited purchasing, will put pressure on prices.

Turmeric

Turmeric yesterday settled down by -2.47% at 8282 on profit booking in expectation of rise in domestic supplies. Traders are also showing lesser interest at prevailing price levels and avoiding bulk buying in expectation of fall in prices. Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce. Losses in prices are looking limited due to weaker production prospects supported by delayed monsoon forecast. India Meteorological Department projected onset of monsoon is likely to be delayed by three days. The southwest monsoon, which normally sets in over Kerala on June 1, is likely to arrive on June 4. Turmeric exports during Apr-Feb 2023, rose by 10.42 percent at 151,298.89 tonnes as compared to 137,017.23 tonnes exported during Apr- Feb 2022. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 12,484.25 tonnes in January 2023 showing a rise of 18.60%. In February 2023 around 14,806.30 tonnes of turmeric was exported as against 10,358.22 tonnes in February 2022 showing a rise of 42.94%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. The Spices Board has pegged turmeric production at 1.33 mln tn, up 18.4% on year. In Nizamabad, a major spot market in AP, the price ended at 7669.75 Rupees gained 210.3 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.42% to settle at 15085 while prices are down -210 rupees, now Turmeric is getting support at 8124 and below same could see a test of 7966 levels, and resistance is now likely to be seen at 8504, a move above could see prices testing 8726.

Trading Ideas:
* Turmeric trading range for the day is 7966-8726.
* Turmeric dropped on profit booking in expectation of rise in domestic supplies.
* Supplies in Maharashtra and Telangana are likely to increase as farmers are getting fair realization on their produce.
* India Meteorological Department projected onset of monsoon is likely to be delayed by three days.
* In Nizamabad, a major spot market in AP, the price ended at 7669.75 Rupees gained 210.3 Rupees.

Jeera

Jeera yesterday settled down by -4.08% at 44710 on profit booking after prices rose due to good export demand and expectations of lower stocks end of the current marketing year. Prices rose on crop worries grow due to unseasonal rains and hailstorms in Rajasthan, the major producing state. The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers. The jeera growing regions in southern and north-western parts of Rajasthan in the districts of Alwar, Jaisalmer, Jaipur, Bikaner, Bhilwara, and Barmer have received a fresh spell of unseasonal rains in the past week, triggering concerns on the crop condition. According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. One bag holds 55kg. This will result in a demand-supply imbalance. Currently, at least 70% of the crop in Rajasthan and around 30% in Gujarat have yet to be harvested. Because of the rain in both states, the total yield will be reduced. The cumin crop was destroyed by two bouts of unseasonal rainfall during the harvest season. In comparison to the planned arrival of 70 lakh bags, the stock will be reduced to 60-65 lakh bags, with a carry-forward stock of 5 lakh bags from last year. In Unjha, a key spot market in Gujarat, jeera edged down by -302 Rupees to end at 46756.2 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.14% to settle at 9327 while prices are down -1900 rupees, now Jeera is getting support at 43565 and below same could see a test of 42420 levels, and resistance is now likely to be seen at 46390, a move above could see prices testing 48070.

Trading Ideas:
* Jeera trading range for the day is 42420-48070.
* Jeera dropped on profit booking after prices rose due to good export demand
* The market is expecting a lower yield and quality of jeera this season, which has boosted the demand from domestic and export buyers.
* Cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags.
* In Unjha, a key spot market in Gujarat, jeera edged down by -302 Rupees to end at 46756.2 Rupees per 100 kg.

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