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Gold

Gold fell -0.03% to 71127 yesterday as investors waited for additional signals from various Fed officials scheduled to speak this week, hoping to get a better understanding of the probable timing of rate reduction. Minneapolis Fed President Neel Kashkari said that due to stagnant inflation, the US central bank may need to maintain borrowing prices steady for a long time, maybe throughout the year, especially given the strength of the housing market. According to CME's FedWatch Tool, the probability of a rate decrease in September has increased to 65%. Meanwhile, the US claimed discussions on a Gaza truce should be able to bridge the gap between Israel and Hamas, as Israeli soldiers gained control of Rafah's major border crossing yesterday. China's central bank added 60,000 troy ounces of gold to its holdings in April, according to official figures, extending its streak of uninterrupted acquisitions to 18 months despite rising gold prices. China owned 72.80 million ounces of gold at the end of April, up from 72.74 million ounces the previous month, according to statistics. China's gold reserves increased to $167.96 billion from $161.07 billion. The World Gold Council forecasts global central banks' purchases to drop in 2024 compared to this year's 1,037.4 tonnes, but to remain higher than they were before 2022.Technically, the market is in long liquidation, with open interest falling by -3.69% to settle at 15789 and prices falling by -21 rupees. Gold is now receiving support at 70915, and a move below that could see prices test 70700 levels, while resistance is now likely to be seen at 71330, with a move above potentially seeing prices test 71530.

Trading Ideas:
* Gold trading range for the day is 70700-71530.
* Gold held steady as investors anticipated new signals from several Fed officials.
* Fed’s Kashkari said that due to stalled inflation, the US central bank may need to keep borrowing costs unchanged for an extended period.
* Markets now show a 65% chance of a rate cut in September, per CME's FedWatch Tool.

Silver

Silver prices settled flat by 0.14% to settle at 82994, influenced by a strengthening U.S. dollar, which overshadowed the demand stemming from geopolitical tensions. Minneapolis Fed President Neel Kashkari's remarks highlighted the possibility of the U.S. central bank maintaining interest rates unchanged throughout the year, citing stalled inflation partially buoyed by a robust housing market. Kashkari emphasized the need for sustained positive inflation readings to instill confidence in achieving the desired 2% inflation target before considering any policy normalization stance. Market sentiment reflects a 65% probability of a Fed rate cut in September, according to the CME's FedWatch Tool. Richmond Fed President Thomas Barkin echoed sentiments of maintaining current interest rates, deeming them sufficiently restrictive to temper economic growth and steer inflation back towards the 2% target. Attention now turns to the preliminary University of Michigan Consumer Sentiment Index, anticipated to decline from 77.2 in April to 76.0 in May, potentially impacting market sentiment. In economic indicators, U.S. wholesale inventories declined by 0.4% month-over-month in March 2024, aligning with the advance estimate and following a downward revision in the prior month, reflecting shifts in inventory levels. From a technical standpoint, the silver market witnessed fresh buying, with a 1.9% increase in open interest to settle at 25466. Despite a notable increase in prices by 116 rupees, the market remains dynamic. Support levels are identified at 82475 and 81955, while resistance is expected at 83340, with a potential breakout leading to testing of 83685 levels.

Trading Ideas:
* Silver trading range for the day is 81955-83685.
* Silver prices settled flat as the U.S. dollar strengthened.
* Worsening Middle East tensions keep the downside in the price supported.
* Fed’s Barkin said the current level of interest rates is restrictive enough to cool the economy and bring inflation back to the 2% target.

Crude oil
Crude oil prices marginally increased by 0.03% to settle at 6587 following the release of EIA data indicating a draw in US crude oil stocks. The decrease of 1.361 million barrels fell slightly short of market expectations, leading to a tempered market response. However, reports suggesting potential discussions within OPEC+ about increasing crude production contributed to a drop in crude oil prices during trading. Meanwhile, the US Energy Department's announcement of plans to purchase up to 3.3 million barrels of oil for the Strategic Petroleum Reserve (SPR) highlighted ongoing efforts to replenish reserves, which were depleted following President Biden's directive for a significant sale of 180 million barrels after Russia's 2022 invasion of Ukraine. The decision to halt oil purchases for the reserve reflects crude oil prices consistently trading above the desired price threshold. The U.S. Energy Information Administration (EIA) revised its forecasts, anticipating slower growth in global oil demand compared to earlier projections. The agency attributed this adjustment to increased output from regions outside the Organization of the Petroleum Exporting Countries (OPEC) and decreased demand from developed economies. Despite the slight downward revision, the EIA maintains expectations for growth in oil consumption this year. From a technical standpoint, the market observed short covering, with a decrease in open interest and a modest increase in prices. Crude oil is expected to find support at 6476, with potential downside testing of 6366 levels. Conversely, resistance is likely at 6654, with a breakout possibly leading to a test of 6722.

Trading Ideas:
* Crudeoil trading range for the day is 6366-6722.
* Crude oil prices rebounded as EIA data showed a draw in US crude oil stocks.
* US seeks to buy more than 3 mln barrels of oil for SPR, Energy Department says
* US EIA cuts 2024 world oil demand growth forecast

Natural gas
Natural gas prices experienced a decline of -0.92%, settling at 182.5 amid concerns regarding the significant oversupply in storage. Despite a decrease in output and forecasts indicating higher demand over the next two weeks, prices softened as the market grapples with abundant supply dynamics. Factors such as increased gas flow to liquefied natural gas (LNG) export facilities and heightened gas consumption for air conditioning in Texas due to hot weather failed to offset worries about oversupply. U.S. gas production witnessed an 11% decline so far in 2024, as energy companies like EQT and Chesapeake Energy curtailed drilling activities in response to plunging prices earlier in the year. Production in the Lower 48 states dipped to a preliminary 15-week low, reflecting efforts to balance supply with demand. Meteorological projections indicate a shift towards warmer-than-normal weather from May 15-22, potentially impacting gas demand. LSEG's forecast suggests a decline in gas demand in the Lower 48, including exports, from 92.6 bcfd this week to 90.4 bcfd next week, revised downwards from previous outlooks. This downward revision underscores prevailing concerns regarding oversupply and its implications on market dynamics. From a technical standpoint, the natural gas market observed fresh selling pressure, with a 3.42% increase in open interest to settle at 23170. Despite a decline in prices by -1.7 rupees, the market remains dynamic. Support levels are identified at 179.2 and 176, while resistance is expected at 187.8, with a potential breakout leading to testing of 193.2 levels.

Trading Ideas:
* Naturalgas trading range for the day is 176-193.2.
*  Natural gas eased on worries the tremendous oversupply of gas in storage will increase.
* Limiting gains was a forecast calling for demand to decline more than expected over the next two weeks.
* U.S. gas production was down about 11% so far in 2024 after several energy firms, including EQT and Chesapeake Energy.

Copper
Copper prices experienced a decline of -1.16% to settle at 855, attributed partly to a firmer dollar, which curtailed the importing power for key foreign manufacturers. Despite this setback, copper prices remain significantly higher, up 13% since the beginning of the second quarter, fueled by concerns over potential supply deficits. Challenges in global mines have intensified pressure on copper ore availability, prompting major smelters in China, responsible for half of global supply, to implement a 10% joint output cut this year. Moreover, the industry's reluctance to commit to new mining projects has spurred M&A activity, exemplified by BHP's recent attempt to acquire Anglo American. On the demand side, PMI surveys indicate robust demand for Chinese manufactured goods in foreign markets, bolstering the premium paid by factories for physical deliveries of copper. Chile's copper exports surged by 25.3% year-on-year in April, reaching $4.19 billion, according to the central bank, underscoring the metal's economic significance. China's policy initiatives, including support for the economy through prudent monetary and proactive fiscal measures, have also influenced copper markets. Relaxation of home purchase restrictions in Shenzhen, aimed at boosting the property market, has further stimulated demand for industrial materials, including copper. Technically, the market observed fresh selling pressure, with an increase in open interest and a decline in prices. Copper is anticipated to find support at 849.6, with potential downside testing of 844.1 levels. Conversely, resistance is likely at 861.3, with a breakout possibly leading to a test of 867.5. Traders will closely monitor geopolitical developments and policy shifts for insights into future price movements.

Trading Ideas:
* Copper trading range for the day is 844.1-867.5.
* Copper prices dropped after the dollar firmed.
* However, downside seen limited amid increased attention to risks of supply deficits.
*  Mounting pressure for copper ore availability amid setbacks in global mines hampered margins for key smelters in China.

Zinc

Zinc prices faced a decline of -1.49%, settling at 258.2, with Boliden's decision to restart production at its Tara zinc mine in Ireland serving as a prominent factor. The mine, which was put on care and maintenance last year amidst low zinc prices, is set to resume operations in the fourth quarter of this year, with full production expected from January 2025. Additionally, Nyrstar's Budel smelting operations in the Netherlands are poised to resume production, driven by improved zinc prices used in steel galvanization. Despite production restarts, the global zinc market witnessed a widening surplus to 40,100 metric tons in February, up from 12,300 tons in January, as reported by the International Lead and Zinc Study Group (ILZSG). This surplus trend persisted into the first two months of the year, marking a shift from a deficit experienced in the same period last year. From a technical perspective, the zinc market saw long liquidation, evidenced by a significant drop of -24.05% in open interest to settle at 3464, coinciding with a decline in prices by -3.9 rupees. Support levels for zinc are identified at 254.9 and 251.5, while resistance is anticipated at 261.6, with a potential breakout leading to testing of 264.9 levels. The widening surplus in the zinc market underscores challenges ahead, necessitating close monitoring of production trends, demand indicators, and price movements for insights into future market direction.

Trading Ideas:
* Zinc trading range for the day is 251.5-264.9.
* Zinc dropped as Boliden to restart its Tara zinc mine in Ireland
* Nyrstar to resume zinc production at Dutch smelter in May
* Global zinc market surplus widens in February, ILZSG says

Aluminium
Aluminium prices witnessed a decline of -0.85% to settle at 232.35, driven by profit-taking spurred by a firm dollar. Despite this, sentiments remain buoyed by expectations of robust demand from the energy transition and new technologies, alongside concerns about tight supplies. Production curbs in Yunnan due to the annual dry season further limited downside potential. Supply dynamics were also influenced by apprehensions that Western consumers might hesitate to engage in Russian metal buying outside LME contracts, fearing future restrictions. China's substantial increase in imports of unwrought aluminium and products, up 89.8% in March and 92.3% in the first quarter, according to customs data, underscored robust demand trends. Concurrently, China's primary aluminium output surged by 7.4% in March, driven by rising prices and increased demand across sectors like automotive, housing, and packaging production. China's manufacturing sector exhibited signs of recovery, expanding for the first time in six months, further bolstering demand for aluminium. The country's impressive production figures for the first quarter of 2024, with a 6.8% rise in aluminium output compared to the same period last year, reflected sustained momentum in the industry. Technically, the market observed long liquidation, marked by a decrease in open interest and a decline in prices. Aluminium is expected to find support at 230.5, with potential downside testing of 228.7 levels. Conversely, resistance is likely at 234.1, with a breakout possibly leading to a test of 235.9. Traders will continue to monitor supply dynamics, demand indicators, and geopolitical developments for insights into future price movements.

Trading Ideas:
* Aluminium trading range for the day is 228.7-235.9.
* Aluminium dropped as a firm dollar triggered profit-taking
* But expectations of robust demand from the energy transition and new technologies along with concerns about tight supplies supported sentiment.
* Smelters in Yunnan, remained subject to production curbs due to the annual dry season.

Cottoncandy
Cotton candy prices edged up by 0.1% to settle at 57580, fueled by robust demand for Indian cotton from key buyers like Bangladesh and Vietnam. However, the upside remained limited due to expectations of a better crop yield in countries such as Australia. The International Cotton Advisory Committee (ICAC) projected increases in cotton production, consumption, and trade for the upcoming 2024-25 season, indicating positive prospects for the cotton market. In India, cotton stocks are anticipated to decline by nearly 31% in 2023/24, reaching their lowest level in over three decades, driven by reduced production and increasing consumption. Lower stockpiles are expected to constrain exports, support global prices, and potentially uplift domestic prices while weighing on the margins of local textile companies. India's cotton exports for the current season are forecasted to rise to 2.20 million bales, marking a significant increase from the previous year. Looking ahead to the 2024/25 marketing year, India's cotton production is estimated to decrease by two percent due to farmers shifting acreage to higher-return crops. However, mill consumption is projected to increase by two percent, driven by improving yarn and textile demand in major international markets. Additionally, with the recent removal of import duty on extra-long staple (ELS) cotton, imports are expected to rise by 20 percent. In China, cotton imports for the 2024/25 marketing year are forecasted at 2.4 million metric tons, driven by higher demand for textile and apparel products domestically and internationally. Technically, the cotton candy market observed short covering, with a drop in open interest by -1.04% and a price increase of 60 rupees. Support levels are identified at 57360 and 57150, while resistance is anticipated at 57720, with potential for further upward movement.

Trading Ideas:
* Cottoncandy trading range for the day is 57150-57870.
* Cotton gains as demand for India cotton continues to be strong.
* However upside seen limited amid prospects of a better crop in countries such as Australia.
* Cotton stocks at the end of 2023/24 marketing year could fall to 2 million bales  - CAI
* In , a major spot market, the price ended at  Rupees dropped by  percent.

Turmeric

Turmeric prices surged by 2.2% to settle at 18878, driven by below-normal supplies and active festive demand. However, the upside was tempered by expectations of new arrivals from the Marathwada region in Maharashtra. The influx of new crop supply, including 5,400 bags at the Nanded spot market, alongside higher arrivals in Nizamabad and Erode, contributed to the market dynamics. Despite the increased arrivals, demand for quality turmeric remained strong in regions such as Sangli, Basmat, and Hingoli, buoyed by expectations of an uptick in sowing area for the current year. Turmeric exports during Apr-Feb 2024 witnessed a decline of 4.42% compared to the same period in 2023, totaling 144,585.68 tonnes. However, there was a notable increase in exports in February 2024 compared to January 2024, indicating a potential resurgence in demand. Conversely, turmeric imports during Apr-Feb 2024 decreased by 15.36% compared to the previous year, with a significant rise observed in February 2024 compared to both January 2024 and February 2023, reflecting fluctuating trade patterns. From a technical standpoint, the turmeric market experienced fresh buying, with a 0.69% increase in open interest to settle at 19725, alongside a substantial price increase of 406 rupees. Support levels are identified at 18320 and 17760, while resistance is anticipated at 19270, with potential for further upside movement. Continued monitoring of supply levels, demand trends, and technical factors will be crucial for market participants to navigate future price movements effectively.

Trading Ideas:
* Turmeric trading range for the day is 17760-19660.
* Turmeric gained amid below normal supplies and active festive demand.
* However, upside seen limited as new arrivals are expected from the Marathwada region in Maharashtra.
*  The Ministry of Agriculture first advance estimate for turmeric production in 2023-24 is estimated at 10.74 lakh tonnes
*  In , a major spot market, the price ended at  Rupees dropped by  percent.

Jeera

Jeera prices experienced a decline of -1.26% to settle at 25380, driven by the anticipation of increased arrivals in the market. Despite this pressure, downside movement remained limited due to robust export demand and aggressive buying by stockists. Global buyers continue to prefer Indian jeera amidst tightening global supplies, further supporting prices. The influx of 10,000 to 12,000 bags of jeera daily in Rajkot Mandi, coupled with increased arrivals in Gujarat and Rajasthan, has resulted in a surplus of supply compared to demand. Favorable weather conditions and an expansion in sowing areas have led to a significant increase in cumin production in major producing regions of India. Trade analysts anticipate a substantial increase in cumin exports, projected to reach about 14-15 thousand tonnes by February 2024. However, despite expectations of increased exports in 2024, jeera exports during April-February 2024 witnessed a decline of 23.75% compared to the previous year. This decline is attributed to various factors, including volatile domestic prices and international market conditions. In February 2024, jeera exports decreased both month-on-month and year-on-year, indicating ongoing challenges in the export market. Technically, the market observed fresh selling pressure, with an increase in open interest and a significant decline in prices. Jeera is expected to find support at 24960, with potential downside testing of 24530 levels. Conversely, resistance is likely at 25960, with a breakout possibly leading to a test of 26530. Traders will closely monitor market dynamics and export trends for insights into future price movement.

Trading Ideas:
* Jeera trading range for the day is 24530-26530.
* Jeera dropped as there is a possibility of further increase in arrivals pressure in the market.
*  Global buyers preferred Indian jeera with tightening global supplies.
* New arrivals have started in Gujarat since last 20-25 days and new arrivals have started in Rajasthan also since last 15 days.
* In Jodhpur, a major spot market, the price ended at 26500 Rupees dropped by 0 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views.