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gold 

Yesterday, gold prices rose by 0.51%, closing at 72,203 rupees per 10 grams, driven by signs of cooling U.S. inflation that bolstered hopes for interest rate cuts from the Federal Reserve later this year. Data indicating that U.S. inflation stabilized in April supports the expectation that the Fed might cut rates, with traders currently pricing in a 56% chance of a rate cut in September, according to the CME FedWatch tool. Additionally, the European Central Bank is expected to trim rates by a quarter point to 3.75% on Thursday, potentially becoming the first major central bank to cut rates in this cycle. However, gold imports to China via Hong Kong saw a significant decline, falling 38% in April compared to March, with net imports totaling 34.6 metric tons, down from 55.8 tons. This decline contrasts with the high consumption recorded in the first quarter, where China saw a 5.94% year-on-year increase in gold consumption, reaching 308.91 metric tons. The decrease in imports is attributed to high gold prices, which dampened retail demand across Asian markets. In India, dealers offered discounts on gold for the fourth consecutive week, with discounts of up to $9 an ounce over official domestic prices, down from $13 the previous week, as subdued wedding season demand impacted market activity. Technically, the gold market is under short covering, evidenced by a 0.84% drop in open interest to settle at 16,906, while prices increased by 369 rupees. Gold is currently supported at 71,530 rupees, with a potential test of 70,855 if this level is breached. On the upside, resistance is expected at 72,640 rupees, with a move above this level potentially pushing prices to test 73,075 rupees.

Trading Ideas:
* Gold trading range for the day is 70855-73075.
* Gold gains as signs of cooling U.S. inflation lifted hopes for interest rate cuts from Fed.
* Slowdown in US econ data to lift gold prices
* Focus this week on US payrolls data due on Friday

silver

Yesterday, silver prices rose by 0.51% to settle at 92,033 as investors awaited crucial U.S. economic reports. The recent inflation data suggested the Federal Reserve might have room for rate cuts in 2024, raising market optimism. Fed Vice Chair Michael Barr highlighted the need for more time to evaluate the effectiveness of current restrictive policies, while Atlanta Fed President Raphael Bostic reiterated his expectation of only one rate cut this year. High interest rates typically reduce the appeal of non-bearing assets like silver, but the metal remains supported by its significant industrial applications. Silver is poised for its fourth consecutive year of deficit due to tightening supplies. Stockpiles tracked by the London Bullion Market Association fell to their second-lowest level on record in April, and volumes at exchanges in New York and Shanghai hovered near seasonal lows. The Fed's preferred inflation measure met estimates, recording the smallest increase this year at 2.7% in April. Wage growth and consumer spending growth moderated more than expected, easing investor concerns about inflation and interest rates. India's silver imports in the first four months of 2024 have already surpassed the total for all of 2023, driven by rising demand from the solar panel industry and investor bets on silver's outperformance versus gold. Technically, the silver market is under short covering, with open interest decreasing by -0.68% to settle at 24,642 as prices rose by 463 rupees. Silver finds support at 90,540, with further support at 89,045. Resistance is anticipated at 92,980, and a move above this level could see prices testing 93,925.

Trading Ideas:
* Silver trading range for the day is 89045-93925.
* Silver gains as investors awaited multiple U.S. economic reports this week.
* Fed’s Barr emphasized the need for more time to evaluate restrictive policy effectiveness.
* Silver is headed into its fourth consecutive year of deficit amid tightening supplies.

crude oil

Yesterday, crude oil prices fell sharply by 4.22%, settling at 6,181 rupees per barrel. This decline came as investors evaluated the intricate deal brokered by OPEC+ to extend various layers of output cuts, primarily into 2025. OPEC+ agreed to sustain most of its significant oil production cuts, totaling 5.86 million barrels per day (bpd), which accounts for about 5.7% of global demand, well into 2025. Specifically, the group will extend cuts of 3.66 million bpd until the end of 2025 and prolong cuts of 2.2 million bpd until September 2024, with a phased reduction of the latter starting in October 2024. OPEC+ expects demand for its crude to average 43.65 million bpd in the second half of 2024, implying a drawdown of 2.63 million bpd if output remains at April's level of 41.02 million bpd. The International Energy Agency projects lower demand, estimating it at 41.9 million bpd in 2024. In the U.S., crude production rose by 0.6% in March, reaching 13.2 million bpd, the highest level since December 2023. Meanwhile, stocks of crude oil decreased by 4.16 million barrels in the week ending May 24, the largest decline in five weeks and significantly more than the expected 1.95 million barrels. Technically, the crude oil market is experiencing fresh selling pressure, as indicated by a substantial 154.34% increase in open interest, settling at 16,982 contracts while prices dropped by 272 rupees. Currently, crude oil is supported at 6,087 rupees, with a potential test of 5,992 if this support level fails. On the upside, resistance is likely to be seen at 6,359 rupees, with a move above this level possibly pushing prices to test 6,536 rupees.

Trading Ideas:
* Crudeoil trading range for the day is 5992-6536.
* Crude oil inches lower as investors weigh up extended OPEC+ supply cuts
* OPEC+ extends deep oil production cuts into 2025
* OPEC expects demand for OPEC+ crude to average 43.65 million bpd in the second half of 2024

natural gas

Yesterday, natural gas prices rose by 4.65% to settle at 225.2, driven by forecasts indicating higher demand for the upcoming week and increased gas flows to liquefied natural gas (LNG) export plants. However, the price increase was moderated by signs of increased drilling activity, lower-than-expected demand for the current week, and concerns about the significant oversupply of gas in storage. In May, gas output in the Lower 48 U.S. states averaged 97.8 billion cubic feet per day (bcfd), down from April's 98.2 bcfd and significantly below the record 105.5 bcfd in December 2023. Despite this, daily output has increased by about 1.4 bcfd since early May, indicating that the recent 58% rise in futures prices has incentivized some drillers to boost production. Nonetheless, U.S. gas production remains down approximately 8% in 2024, as companies like EQT and Chesapeake Energy have delayed well completions and reduced drilling activities following the price drops to 3.5-year lows earlier in the year. Meteorologists predict that weather across the Lower 48 states will remain mostly warmer than normal through mid-June, with a few near-normal days. U.S. utilities added 84 billion cubic feet of gas to storage for the week ending May 24th, the largest build in over a month and exceeding expectations of a 77 billion cubic feet increase. This marks the eighth consecutive week of seasonal storage increases. Technically, the natural gas market is under short covering, with open interest dropping by 13.95% to settle at 17,006 as prices increased by 10 rupees. Natural gas finds support at 217.9, with further support at 210.5. Resistance is expected at 232.8, and a move above this level could see prices testing 240.3.

Trading Ideas:

* Naturalgas trading range for the day is 210.5-240.3.
* Natural gas gains due to forecasts for increased demand and increased gas flow to LNG export plants.
* Gas output in Lower 48 U.S. states fell to an average of 97.8 billion cubic feet per day in May, down from 98.2 bcfd in April.
* Daily output has increased by about 1.4 bcfd since a 15-week low of 96.3 bcfd on May 1

Copper

Copper prices surged by 0.95% yesterday to settle at 880.1, fueled by strong factory activity in China, the world's top consumer, and indications of stabilizing U.S. inflation, which reinforced expectations of the Federal Reserve's potential interest rate cuts later in the year. China's manufacturing activity in May marked its fastest pace in about two years, driven by robust production and new orders across smaller, export-oriented firms, as per a private sector survey. This contrasted with a surprise decline in the broader official purchasing managers' index. Moreover, last week's data showing stabilized U.S. inflation kept the door open for potential Fed rate cuts. Despite some improvement in physical demand indicated by the tightening discount to import copper into China, overall consumption remained subdued due to persistently high and volatile prices. The International Monetary Fund revised up its growth forecast for China, though it warned about risks posed by the property sector. Shanghai copper stocks have surged by 240% year-on-year, with deliveries to LME warehouses. China's daily refined copper production rate hit a record high in April, while copper inventories in Shanghai Futures Exchange warehouses reached four-year highs. The global refined copper market showed a surplus of 125,000 metric tons in March, compared to 191,000 metric tons in February, according to the International Copper Study Group (ICSG). Technically, the copper market witnessed fresh buying momentum, with open interest increasing by 1.03% to settle at 6,165 as prices rose by 8.3 rupees. Copper finds support at 871.6, with further support at 863.2. Resistance is likely at 884.7, and a move above this level could see prices testing 889.4.

Trading Ideas:
 * Copper trading range for the day is 863.2-889.4.
* Copper advanced amid strong factory activity in China
* The discount to import copper into China tightened to $10 a ton, indicating some improvement in physical demand.
* IMF revised its China growth forecast to 5% for 2024 and 4.5% in 2025


Zinc
Zinc prices experienced a decline of 1.39% yesterday, settling at 261.9 rupees, primarily driven by a drop in China's manufacturing activity in May. The official Purchasing Managers' Index (PMI) fell to 49.5 from 50.4 in April, signaling a contraction in the manufacturing sector and dampening demand outlook in the world's largest metals consumer. China's refined zinc output also witnessed a decrease in April, down by 3.99% month-on-month, attributed to maintenance activities at smelters in various regions and raw material issues at certain facilities. However, domestic zinc alloy production saw a slight increase. The Chinese government's efforts to stimulate the economy, including historic support packages and potential interest rate cuts, have provided some support to the industrial outlook for zinc. These measures, coupled with hopes for interest rate cuts, have bolstered confidence in the commodity's future demand. On the global front, data from the International Lead and Zinc Study Group (ILZSG) revealed a decrease in the zinc market surplus to 52,300 metric tons in March, down from 66,800 tons in February. Despite this reduction, the surplus during the first three months of the year remained higher compared to the same period last year. From a technical standpoint, the zinc market is witnessing fresh selling pressure, with a 7.48% increase in open interest, settling at 2,988 contracts, while prices dropped by -3.7 rupees. Currently, zinc is supported at 260 rupees, with a potential test of 258 if this support level is breached. On the upside, resistance is likely at 264.9 rupees, with a move above potentially pushing prices to test 267.8 rupees.

Trading Ideas:
* Zinc trading range for the day is 258-267.8.
* Zinc prices dropped as China's manufacturing activity unexpectedly fell in May.
* The global zinc market surplus fell to 52,300 metric tons in March from 66,800 tons in February – ILZSG.
* China's refined zinc output was 504,600 mt, a month-on-month decrease of 20,900 mt or 3.99%.

Aluminium
Aluminium prices experienced a marginal decline of 0.04% yesterday, settling at 240.8 rupees, as funds offloaded bullish positions amid concerns over the impact of high interest rates on metals demand, especially in China. Shortages of alumina, a critical intermediary product in aluminium production, emerged due to reduced output from China and disruptions to Rio Tinto's Australian exports. Rio Tinto's declaration of force majeure on alumina cargoes from its Australian refineries further raised supply concerns, considering its significance as the world's second-largest producer. Despite these challenges, one global aluminium producer demonstrated confidence in the demand outlook by offering Japanese buyers a premium of $175 a metric ton for July-September, marking an 18% to 21% increase on a quarterly basis. Global primary aluminium output in April showed a year-on-year increase of 3.3%, reaching 5.898 million tonnes, according to data from the International Aluminium Institute (IAI). Meanwhile, China's imports of unwrought aluminium and products surged by 72.1% year-on-year in April, totaling 380,000 metric tons. This trend continued in the first four months of the year, with imports rising by 86.6% compared to the same period last year. Russian imports also witnessed significant growth, reaching 392,775 tons in the first quarter, up 127.7% from the previous year. Technically, the aluminium market is witnessing fresh selling pressure, with a 2.49% increase in open interest, settling at 3,373 contracts, while prices dropped by -0.1 rupees. Currently, aluminium is supported at 238.3 rupees, with a potential test of 235.7 if this support level is breached. On the upside, resistance is likely at 243 rupees, with a move above potentially pushing prices to test 245.1 rupees.

Trading Ideas:
* Aluminium trading range for the day is 235.7-245.1.
* Aluminium dropped triggered by concerns that high interest rates are curbing metals demand
* A continued inflow of "wider money" into metals, providing further support for aluminium.
* Shortages of alumina, emerged recently because of lower output from China and disruption to Rio Tinto's Australian exports.


Cotton candy
Cotton candy prices experienced a decline of -0.9% yesterday, settling at 57,080, primarily due to concerns over sluggish milling demand amid muted global yarn demand. However, the downside was limited as India continued to witness strong demand for cotton from countries like Bangladesh and Vietnam. Additionally, prospects of a better crop in countries such as Australia also influenced market sentiment. The International Cotton Advisory Committee (ICAC) projected increases in cotton-producing areas, production, consumption, and trade for the next season, 2024-25. India's cotton stocks are anticipated to decrease by nearly 31% in 2023/24, reaching their lowest level in over three decades, driven by lower production and rising consumption. This decrease in stockpiles is expected to constrain exports from the world's second-biggest producer, supporting global prices while potentially lifting domestic prices and impacting the margins of local textile companies. India's cotton production for the current season is estimated at 30.97 million bales, with consumption expected to rise to 31.70 million bales. Looking ahead to the 2024/25 marketing year, India's cotton production is estimated to decrease by 2% due to farmers shifting acreage to higher return crops. However, mill consumption is forecasted to increase by 2% as yarn and textile demand improves in major international markets. China's cotton imports for the same period are expected to rise to meet higher demand for textile and apparel products, while production is forecasted to remain stable in Xinjiang but decline in other regions. Technically, the cotton candy market witnessed fresh selling pressure, with open interest increasing by 1.11% while prices declined by -520 rupees. Support levels are seen at 56,900 and 56,720, while resistance is likely at 57,280, with a potential move above leading to testing of 57,480.

Trading Ideas:
* Cottoncandy trading range for the day is 56720-57480.
* Cotton dropped as sluggish milling demand is still concerns amid muted demand of yarn.
* U.S. ending stocks projected 1.3 million bales above 2023/24 level
* Global supplies in 2024/25 projected to be higher than previous year
* In Rajkot, a major spot market, the price ended at 26906 Rupees dropped by -0.51 percent.


Turmeric
Turmeric prices experienced a decline of 2.1% yesterday, settling at 17,236 rupees, attributed to an increase in supplies marking the end of the harvesting season. However, the downside was limited as farmers withheld stocks in anticipation of further price increases. The current heatwave sweeping across the country threatens to damage crop yields, exacerbating the supply crunch and supporting prices. The India Meteorological Department forecasts continued hot weather, with most parts of India expecting more heatwave days than usual in May. Insufficient rainfall over southern India in April, significantly below normal levels, further adds to concerns about crop yields. The Ministry of Agriculture and Farmers’ Welfare's estimate projects a decrease in turmeric production for 2023-24 to 10.74 lakh tonnes compared to 11.30 lakh tonnes the previous year. Additionally, demand destruction has been observed as prices surged, leading many to adopt a hand-to-mouth approach. Turmeric exports during Apr-Mar 2024 dropped by 4.75% compared to the previous year, with a notable increase seen in March. Conversely, turmeric imports during the same period decreased by 12.71%, indicating a decrease in demand for imported turmeric. In Nizamabad, a major spot market, turmeric prices ended higher at 18,116 rupees, gaining 0.43%. Technically, the turmeric market is undergoing long liquidation, with a 5.64% drop in open interest to settle at 11,535 contracts, while prices fell by 370 rupees. Currently, turmeric is supported at 16,890 rupees, with a potential test of 16,546 if this support level is breached. On the upside, resistance is likely at 17,786 rupees, with a move above potentially pushing prices to test 18,338 rupees. Despite short-term fluctuations, the overall outlook remains influenced by supply dynamics and weather conditions.

Trading Ideas:
* Turmeric trading range for the day is 16546-18338.
* Turmeric dropped amid increase in supplies at the end of harvesting season.
* The current heat wave could severely damage the crop yield, further contributing to the supply crunch.
* The Ministry of Agriculture first advance estimate for turmeric production in 2023-24 is estimated at 10.74 lakh tonnes
* In Nizamabad, a major spot market, the price ended at 18116 Rupees gained by 0.43 percent.


Jeera
Jeera prices surged by 5.57% yesterday, closing at 28,600, driven by robust domestic and export demand coupled with tight global supplies. The market was further bolstered by farmers holding back their stocks in anticipation of better prices. However, the expectation of higher production, with a projected 30% increase this season, could potentially weigh on prices. Increased cultivation areas in Gujarat and Rajasthan contribute to this anticipation. While the upside in prices seems limited due to the expectation of higher production, there are indications of significant increases in jeera production globally, particularly in China, where output has more than doubled. Similarly, Syria, Turkey, and Afghanistan are also expected to witness increased production, with new supplies entering the market in June and July. These factors are likely to lead to a decline in prices as the new harvest reaches the market. Despite a drop in jeera exports during Apr-Mar 2024 compared to the previous year, there was a significant rise in exports in March 2024 compared to both February 2024 and March 2023, indicating some fluctuation in export volumes. Additionally, international cumin prices have declined, which may stimulate exports in the coming months. Technically, the jeera market experienced short covering, with a drop in open interest by -2.04% as prices rose by 1510 rupees. Support levels for jeera are seen at 27,570 and 26,530, while resistance is likely at 29,180, with a potential move above this level testing 29,750. Traders should closely monitor production forecasts and global supply dynamics to gauge future price movements in the jeera market.

Trading Ideas:
* Jeera trading range for the day is 26530-29750.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 28635.05 Rupees gained by 0.31 percent.

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