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Gold

Gold prices increased by 1.06% to settle at 72,009, driven by investor sentiment reassessing the likelihood of U.S. interest rate cuts ahead of a crucial inflation report. The minutes from the latest Federal Reserve policy meeting indicated that inflation is expected to take longer to fall to the 2% target. Fed Governor Christopher Waller mentioned the potential for a rise in a key underlying interest rate influencing monetary policy, although it remains uncertain. In terms of global demand, China's net gold imports via Hong Kong fell significantly by about 38% in April, dropping to 34.575 metric tons from 55.836 tons in March, as per data from the Hong Kong Census and Statistics Department. This decline reflects reduced demand from the world's largest gold consumer. In India, gold demand saw a slight uptick following a price correction from record highs. However, retail purchases remained below normal, prompting dealers to widen discounts. Indian dealers offered discounts of up to $13 an ounce over official domestic prices, up from the previous week's $10 discount. In China, premiums on gold ranged between $15-$20 per ounce over benchmark spot prices, down from $16-$30 in the previous week, indicating subdued demand. Technically, the gold market is experiencing short covering, evidenced by a 13.28% decrease in open interest, which settled at 5,970 contracts, while prices increased by 753 rupees. The technical setup indicates that gold finds support at 71,605, with a potential test of 71,195 if it falls below this level. On the upside, resistance is expected at 72,275, and a move above this level could push prices towards 72,535.

Trading Ideas:
* Gold trading range for the day is 71195-72535.
* Gold ticked up as investors assessed diminishing bets of U.S. interest rate cuts.
* Federal Reserve officials indicated that it would likely take longer than anticipated for inflation to fall to 2%.
* China's April net gold imports via Hong Kong down 38% from March
 
 
 Silver
Silver prices surged by 4.48% to settle at 94,608, driven by renewed optimism regarding China’s economic growth prospects and escalating geopolitical tensions between Israel and Hamas. China’s launch of a new state-backed investment fund with a substantial registered capital of CNY 344 billion aimed at boosting the semiconductor industry added a positive sentiment for silver, which is widely used in electronics. Market participants are also closely monitoring the upcoming release of the personal consumption expenditures (PCE) price index, the U.S. central bank's preferred inflation gauge, due on Friday. This data is critical as it will influence the Federal Reserve’s future monetary policy decisions. Currently, traders are pricing in a roughly 61% chance that the Fed will cut rates in November, slightly down from a 63% chance previously. This expectation is in part due to comments from Federal Reserve officials. Atlanta Fed President Raphael Bostic highlighted the ongoing upward pressure on prices, suggesting that the U.S. central bank may need to delay rate cuts. Similarly, Cleveland Fed President Loretta Mester underscored the detailed commentary provided by the Fed on economic conditions and monetary policy, reflecting a cautious approach to rate adjustments. Technically, the silver market is experiencing fresh buying interest, as indicated by an 8.73% increase in open interest, which settled at 27,230 contracts. Prices have risen by 4,060 rupees, showcasing strong bullish momentum. Silver finds support at 92,455, with a potential test of 90,300 if it falls below this level. On the upside, resistance is anticipated at 95,770, with a move above this level likely driving prices towards 96,930.

Trading Ideas:
* Silver trading range for the day is 90300-96930.
* Silver gains due to optimism about China's economic growth and escalation in Israel-Hamas war.
* China launched a state-backed investment fund to boost semiconductor industry.
* Fed’s Bostic warns of upward pressure on prices and potential delay in interest rate cuts.
 
 
Crudeoil  
Crude oil prices increased by 1.17% to settle at 6,547 as market participants anticipate potential output cut extensions by major producers to address global oversupply concerns. This rise is supported by robust gasoline demand in the U.S., which reached its highest level since November, according to the Energy Information Administration (EIA). U.S. drivers account for about a tenth of global oil demand, making this surge in gasoline consumption a significant factor in supporting crude oil prices. Despite the positive demand outlook, stronger U.S. PMI data has tempered expectations for Federal Reserve interest rate cuts, potentially affecting the U.S. economy and energy demand. In terms of supply dynamics, U.S. weekly imports of crude oil from Mexico fell to a record low of 184,000 barrels per day (bpd) last week, down from the previous low of 208,000 bpd recorded in April. This decline is attributed to Petroleos Mexicanos, the state energy company, reducing exports to supply more to domestic refineries. Additionally, U.S. crude inventories rose by 1.8 million barrels to 458.8 million barrels, according to the EIA, against expectations for a 2.5 million-barrel draw. Crude stocks at the Cushing, Oklahoma delivery hub also increased by 1.3 million barrels. Technically, the crude oil market is experiencing short covering, as indicated by an 11.93% drop in open interest, which settled at 6,333 contracts, while prices increased by 76 rupees. Crude oil currently finds support at 6,489, with a potential test of 6,431 if it falls below this level. On the upside, resistance is anticipated at 6,585, and a move above this level could push prices towards 6,623.

Trading Ideas:
* Crudeoil trading range for the day is 6431-6623.
* Crude oil gains as market participants await potential output cut extensions.
* Gasoline demand in the U.S. reached its highest level since November
* The stronger US PMI data dampened expectations for Federal Reserve interest rate cuts.
 
 
 Naturalgas
Natural gas prices remained unchanged at 234.7 as the market balanced various factors affecting supply and demand. There are several notable developments influencing the natural gas market. Firstly, forecasts for weekly demand have been lifted, supporting prices. Additionally, more gas is flowing to LNG export plants, with flows to the Freeport LNG plant in Texas reaching an 11-month high. In other supply-related news, the U.S. gas pipeline venture, Mountain Valley Pipeline, has delayed its target in-service date from "prior to June 1" to early June. This pipeline, which runs from West Virginia to Virginia, is a significant infrastructure project that will impact supply dynamics once operational. According to financial firm LSEG, gas output in the Lower 48 U.S. states has averaged 97.5 billion cubic feet per day (bcfd) in May, down from 98.2 bcfd in April. This is a significant decline from the monthly record of 105.5 bcfd set in December 2023. Despite the recent daily increase of about 1.5 bcfd from a 15-week low of 96.2 bcfd on May 1, overall production in 2024 remains down around 8%.  Meteorologists forecast warmer-than-normal weather across the Lower 48 states from May 24-28 and again from June 3-8, with a near-normal stretch from May 29-June 2.  Technically, the market is experiencing fresh selling pressure, as indicated by a 7.74% increase in open interest, settling at 13,468 contracts. Prices have remained steady, showing no change at 234.7. Natural gas is currently finding support at 229.2, with a potential test of 223.6 if it falls below this level. On the upside, resistance is anticipated at 239.2, and a move above this level could see prices testing 243.6.

Trading Ideas:
* Naturalgas trading range for the day is 223.6-243.6.
* Natural gas recovered from lows on lifted forecasts for weekly demand
* More gas was flowing to LNG export plants with flows to Freeport LNG's plant in Texas up to an 11-month high.
* The number of rigs drilling for natural gas in the US fell by 4 this week to 99.
 
 
 
Copper  
Copper prices increased by 0.89% to settle at 899.6, buoyed by positive developments in China, including property stimulus measures and better-than-expected industrial output data. The rise was also supported by systematic buying, with funds betting on a shortage of copper due to the metal's critical role in the transition to a green economy. Despite these bullish factors, copper inventory levels in China, the world's largest consumer, remain at a four-year high, indicating some softness in demand. This inventory stands close to 300,000 tons in Shanghai Futures Exchange (SHFE) monitored warehouses, with seasonal withdrawals slower than usual due to the recent high prices surpassing $10,000 a ton. On the global front, the International Copper Study Group (ICSG) reported a surplus of 125,000 metric tons in the refined copper market for March, down from a 191,000 metric ton surplus in February. World refined copper output in March was 2.33 million metric tons, while consumption stood at 2.20 million metric tons. In terms of production, China’s refined copper output saw a significant year-on-year increase of 9.2% in April, reaching 1.14 million metric tons. On a daily basis, this translates to an average output of 38,000 tons, based on official data. From a technical perspective, the copper market is under fresh buying pressure, as evidenced by a 12.05% increase in open interest, settling at 5,466 contracts. Prices rose by 7.95 rupees, suggesting strong buying momentum. Copper is currently supported at 893.4, with a potential test at 887.2 if this support level is breached. On the upside, resistance is anticipated at 904.6, and a move above this level could see prices testing 909.6.

Trading Ideas:
* Copper trading range for the day is 887.2-909.6.
* Copper rose amid property stimulus measures in China
* Funds have been buying copper, betting it would be in shortage, as the world needs those metals to transition into a green economy.
* Copper inventory remained at a four-year high in China
 
 
 Zinc
Zinc prices rose by 0.83% to settle at 273.75, driven by a decrease in the global zinc market surplus and various factors affecting supply and demand. Data from the International Lead and Zinc Study Group (ILZSG) showed that the global zinc market surplus fell to 52,300 metric tons in March from 66,800 tons in February. This reduction in surplus suggests a tightening of the zinc market, contributing to upward price pressure. During the first three months of the year, the global surplus stood at 144,000 tons compared to 201,000 tons in the same period last year, indicating a significant improvement year-on-year. In April 2024, China's refined zinc output decreased by 3.99% month-on-month to 504,600 metric tons, with a year-on-year decrease of 6.56%. Domestic zinc alloy production in China saw an increase in April, reaching 95,500 metric tons, while the output of domestic smelters declined due to routine maintenance and equipment issues in various regions. Additionally, China's retail sales rose by 2.3% year-on-year in April, marking the 15th consecutive month of increase but falling short of market forecasts and moderating from the prior period. From a technical standpoint, the zinc market is experiencing fresh buying, with a 4.63% increase in open interest, settling at 3,163 contracts. Prices rose by 2.25 rupees, indicating strong buying momentum. Zinc is currently finding support at 270.4, with a potential test at 267 if this support level is breached. On the upside, resistance is likely at 276, with a move above this level potentially pushing prices towards 278.2.

Trading Ideas:
* Zinc trading range for the day is 267-278.2.
* Zinc gains as the global zinc market surplus fell to 52,300 metric tons in March.
* In April 2024, China's refined zinc output was 504,600 mt, a month-on-month decrease of 3.99%.
* In April, the output of domestic smelters declined, mainly due to routine maintenance of smelters.
 
 
 
Aluminium  
Aluminium prices edged up by 0.46% to settle at 242.2, driven by supply concerns amidst setbacks in production. Gas shortages prompted mining giant Rio Tinto to declare force majeure on alumina cargoes from its Australian refineries, exacerbating worries about supply from the world's second-largest producer. Additionally, uncertain meteorological conditions in China's key producing region of Yunnan threatened hydroelectric power availability, further straining production prospects. Moreover, disruptions to aluminium supply were compounded by developments in trading dynamics. On-warrant aluminium LME stocks in Port Klang, Malaysia, saw a significant decline following the key delivery deadline of May 15th, reflecting trading giants' adjustments to new contract rules post-US and UK sanctions on Russian aluminium. Despite these supply challenges, global primary aluminium output in April showed resilience, rising by 3.3% year-on-year to 5.898 million tonnes according to data from the International Aluminium Institute (IAI). However, China's April imports of unwrought aluminium and products surged by 72.1% year-on-year to 380,000 metric tons, contributing to a notable increase in imports for the first four months of the year, which stood at 1.49 million tons, up 86.6% from the same period last year. Of particular interest is the forthcoming release of March data by China on specific origin countries for imports, providing insight into the sourcing landscape for aluminium. From a technical perspective, the aluminium market is experiencing fresh buying, with a 3.08% increase in open interest, settling at 3,348 contracts. Prices rose by 1.1 rupees, indicating bullish momentum. Aluminium is currently finding support at 241.1, with a potential test at 239.9 if this support level is breached. Resistance is anticipated at 243.9, with a move above potentially leading prices towards 245.5.

Trading Ideas:
* Aluminium trading range for the day is 239.9-245.5.
* Aluminium gains amid setbacks to supply.
* Gas shortages drove mining giant Rio Tinto to declare force majeure on alumina cargoes from its Australian refineries, raising concerns about supply.
* On-warrant aluminum LME stocks in Port Klang, Malaysia, plunged after the key delivery deadline of May 15th.
 
 
Cottoncandy  
Cottoncandy prices experienced a decline of -1% to settle at 57700, driven by concerns over sluggish milling demand amidst muted demand for yarn in the global market. However, the downside was limited as India's cotton continued to attract strong demand from buyers in countries such as Bangladesh and Vietnam. The International Cotton Advisory Committee (ICAC) has projected increases in the cotton-producing area, production, consumption, and trade for the next season, 2024-25. India's cotton stocks are expected to decline by nearly 31% in 2023/24, reaching their lowest level in more than three decades due to lower production and rising consumption.  For marketing year (MY) 2024/25, India's cotton production is estimated at 25.4 million 480 lb. bales, representing a two percent decrease from the previous year due to farmers shifting acreage to higher return crops. However, mill consumption is expected to rise by two percent, driven by improving demand for yarn and textiles in major international markets. Import duties on extra-long staple (ELS) cotton have been recensed, leading to an estimated 20 percent increase in imports. In China, cotton imports for MY 2024/25 are forecasted at 2.4 million metric tons (MMT) due to higher domestic and international demand for textile and apparel products. This follows a rebound in exports of textile and apparel products, along with increased demand for imported cotton. From a technical standpoint, the cottoncandy market is currently under fresh selling pressure, as evidenced by a significant increase in open interest by 17.27%, settling at 326 contracts. Prices witnessed a decline of -580 rupees, with support observed at 57480 and potential further support at 57250 levels. Resistance is likely at 57960, with a potential upward move towards 58210 if resistance levels are breached.

Trading Ideas:
* Cottoncandy trading range for the day is 57250-58210.
* 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 27203.6 Rupees dropped by -0.27 percent.
 
 
 Turmeric
Turmeric prices experienced a slight decline of -0.67% to settle at 19838, primarily due 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 rises. Moreover, the prevailing heat wave across India threatens to damage crop yields, exacerbating the supply crunch and supporting prices. The India Meteorological Department's forecast suggests that most parts of the country will continue to experience more heat wave days than usual in May, further impacting crop output. Despite the decrease in production estimated at 10.74 lakh tonnes for 2023-24 compared to 11.30 lakh tonnes the previous year, demand destruction has occurred as prices surged, with many consumers adopting a hand-to-mouth approach. Nonetheless, regions like Sangli, Basmat, and Hingoli, known for turmeric cultivation, are witnessing robust demand for quality produce on expectations of an increase in sowing area in the current year. Turmeric exports during Apr-Mar 2024 declined by 4.75% compared to the previous year, totaling 162,018.50 tonnes. However, there was a notable increase in exports in March 2024 compared to February 2024, showcasing a rise of 34.90%. Conversely, turmeric imports during Apr-Mar 2024 dropped by 12.71% compared to the previous year, totaling 14,637.55 tonnes. In terms of technical analysis, the turmeric market is currently witnessing long liquidation, as evidenced by a drop in open interest by -1.99%, settling at 15535 contracts. Prices experienced a decline of -134 rupees, with support observed at 19554 and potential further support at 19270 levels. On the upside, resistance is likely at 20276, with a potential upward move towards 20714 if resistance levels are surpassed.

Trading Ideas:
* Turmeric trading range for the day is 19270-20714.
* 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 18335.05 Rupees gained by 1.93 percent.
 
 
Jeera  
Jeera prices witnessed a significant decline of -2.72% to settle at 28590, primarily driven by profit booking following a recent uptrend. The pace of arrivals has slowed down as stockists and farmers are reluctant to release their stocks at current price levels, contributing to the downward pressure on prices. Despite this, export demand is expected to increase, supported by robust demand and aggressive buying by stockists, particularly as global buyers prefer Indian jeera amidst tightening global supplies. The first week of May saw an increase in jeera arrivals at major APMC mandies across India compared to the prior week, indicating continued market activity. Additionally, the arrival of 10000 to 12000 bags of jeera daily in Rajkot Mandi suggests ongoing market participation. Increased sowing areas in Gujarat and Rajasthan, coupled with favorable weather conditions, have led to a significant increase in production, reaching a new record in Gujarat and increasing by 53% in Rajasthan. However, despite expectations of increased exports, jeera exports during Apr-Mar 2024 declined by 13.53% compared to the previous year, totaling 152,189.32 tonnes. Nonetheless, there was a notable increase in exports in March 2024 compared to February 2024 and March 2023, indicating some recovery in demand. In terms of technical analysis, the jeera market is currently witnessing long liquidation, with a drop in open interest by -5.02% and prices down by -800 rupees. Support levels are observed at 28220, with potential further support at 27840, while resistance is likely at 29110, with a potential upward move towards 29620 if resistance levels are surpassed.

Trading Ideas:
* Jeera trading range for the day is 27840-29620.
* Jeera dropped on profit booking after prices rose arrival pace has started slowed down
* 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 Unjha, a major spot market, the price ended at 29446.85 Rupees dropped by -1.07 percent.

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