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Gold

Gold prices fell by 1.32% yesterday, settling at 73,046, as investors anticipated the release of minutes from the Federal Reserve's latest policy meeting. The minutes revealed that recent data had not bolstered the Fed's confidence in reaching the 2% medium-term inflation target, indicating that the disinflation process may take longer than expected. Some policymakers suggested a readiness to tighten policy further if inflation risks warrant it. Fed Governor Christopher Waller expressed skepticism about the necessity of further rate hikes, emphasizing the need for convincing data before supporting any rate cuts. Atlanta Fed President Raphael Bostic highlighted the need for caution in making the first rate move, preferring to wait to ensure inflation remains stable. Cleveland Fed President Loretta Mester indicated that maintaining restrictive rates is not a concern given the robust job market, while Boston Fed President Susan Collins noted that achieving a lower rate adjustment would take more time. Financial markets are anticipating the first rate cut in September at the earliest, with two quarter-point reductions expected by the end of the year, according to the CME Group's FedWatch tool. Meanwhile, Russia's gold reserves slightly increased to 75.1 million troy ounces at the start of May from 75.0 million troy ounces the previous month, as reported by the central bank. From a technical perspective, the gold market is experiencing long liquidation, as evidenced by a 13.71% drop in open interest to 8,351 contracts while prices fell by 975 rupees. Gold is currently finding support at 72,675, with further support likely at 72,300 if this level is breached. On the upside, resistance is anticipated at 73,725, and a move above this level could see prices testing 74,400.

Trading Ideas:
* Gold trading range for the day is 72300-74400.
* Gold slipped as investors strapped in Fed minutes for further insights on interest rate cuts.
* Recent data had not increased Fed confidence in progress toward the 2% medium-term target, FOMC minutes.
* Russian gold reserves slightly up to 75.1 mln oz as of May 1 – c.bank

silver

silver prices settled down by 1.81% at 93013 as investors booked profits, causing a temporary cooldown in the rally. This shift in focus occurred as market participants awaited minutes from the Federal Reserve's recent policy meeting to gain more clarity on the central bank's rate trajectory. Recent comments from top Federal Reserve officials highlighted uncertainty about the sustainability of the recent disinflation trends, despite encouraging data from April showing a slowdown in consumer price pressures. Fed officials like Jefferson emphasized the premature nature of declaring a long-lasting trend in disinflation. Federal Reserve Chairman Jerome Powell and his colleagues have refrained from making explicit forecasts about interest rate cuts this year. Instead, they are focusing on various near-term economic paths and their likely responses to each scenario. In the housing market, existing home sales in the US declined by 1.9% month-over-month to an annualized rate of 4.14 million units in April 2024, the lowest in three months. On the supply-demand front, the global silver deficit is projected to rise by 17% to 215.3 million troy ounces in 2024. This increase is driven by a 2% growth in demand, primarily due to robust industrial consumption, coupled with a 1% decline in total supply, as reported by the Silver Institute industry association. Technically, the silver market is undergoing long liquidation, with a 4.32% drop in open interest to 26500, while prices fell by 1712 rupees. Silver finds support at 92200, with further downside potential testing at 91395 levels. Resistance is anticipated at 94340, and a move above this level could see prices testing 95675.

Trading Ideas:
* Silver trading range for the day is 91395-95675.
* Silver prices fell as the rally cooled with investors booking profits.
* Two top Fed officials said they're not yet ready to say inflation trends are again moving sustainably back to the central bank's 2% target
* Existing home sales in the US declined 1.9% month-over-month

Crude

Crude oil prices declined by 1.16% yesterday, settling at 6,492 INR, following an unexpected rise in U.S. crude stockpiles. The Energy Information Administration (EIA) reported an increase of 1.825 million barrels in U.S. crude inventories last week, contrary to market expectations of a 2.55 million barrel decrease. Additionally, distillate stockpiles rose while gasoline stocks fell less than anticipated. The American Petroleum Institute (API) also reported a 2.48 million barrel increase in crude inventories. The geopolitical risk premium from Middle Eastern tensions has diminished as oil supplies have not been disrupted. Market participants are now focusing on the upcoming OPEC+ meeting on June 1, where major oil producers are expected to extend output cuts to prevent global oversupply and support prices. Data from the U.S. Energy Information Administration highlighted a significant drop in weekly crude oil imports from Mexico to 184,000 bpd, the lowest on record. The physical crude markets have shown signs of weakening, as evidenced by the narrowing premium of Brent's first-month contract over the second, known as backwardation, which is at its lowest since January. This trend indicates easing concerns over tight prompt supply. Technically, the crude oil market is experiencing fresh selling pressure, with open interest increasing by 21.43% to settle at 7,026 contracts while prices dropped by 76 rupees. Crude oil is currently supported at 6,452, with further support expected at 6,412 if this level is breached. On the upside, resistance is anticipated at 6,535, and a move above this level could see prices testing 6,578.

Trading Ideas:
* Crudeoil trading range for the day is 6412-6578.
* Crude oil fell following a surprise rise in US crude stockpiles.
* Crude oil inventories in the US rose by 1.825 million barrels last week
* The risk premium from Middle Eastern tensions has waned as oil supplies remain unaffected.


natural gas

natural gas prices surged by 4.74% to settle at 234.2 amid a significant increase in gas flows to liquefied natural gas (LNG) export plants, particularly Freeport LNG's Texas facility, which saw flows reach an 11-month high. Despite this bullish development, the upside was somewhat capped by signs of rising production, lower forecasted demand for the coming week, and concerns over substantial gas surplus in storage. According to financial firm LSEG, gas output in the Lower 48 U.S. states averaged 97.3 billion cubic feet per day (bcfd) in May, down from 98.2 bcfd in April, and significantly below the December 2023 record of 105.5 bcfd. However, daily output has increased by about 0.7 bcfd since hitting a 15-week low of 96.2 bcfd on May 1, indicating that the recent 63% surge in futures prices over the past three weeks has incentivized some producers to ramp up production. Meteorologists forecasted warmer-than-normal weather across the Lower 48 states from May 22-27 and again from June 2-6, with a near-normal period in between from May 28-June 1. LSEG projected that gas demand, including exports, in the Lower 48 states would decrease from 92.6 bcfd this week to 91.8 bcfd next week. From a technical perspective, the natural gas market is experiencing fresh buying interest, evidenced by a 3.34% increase in open interest, bringing it to 16947 contracts, while prices rose by 10.6 rupees. Natural gas has support at 222.4, with further downside potential testing at 210.6 levels. On the upside, resistance is anticipated at 241, and a move above this level could see prices testing 247.8.

Trading Ideas:
* Naturalgas trading range for the day is 210.6-247.8.
* Natural gas gains amid an increase in the amount of gas flowing to LNG export plants.
* However upside seen limited on signs producers started increasing output.
* Gas output in the Lower 48 U.S. states fell to an average of 97.3 bcfd so far in May.


copper

copper prices dropped by 4.17% to settle at 896.15, as funds locked in profits following a rally to record highs. This rally had dampened the appetite for industrial consumers to buy the metal. Copper inventories in warehouses monitored by the Shanghai Futures Exchange (SHFE) remained near 300,000 tons, with seasonal withdrawals proceeding slower than usual. In April, China’s refined copper output increased, alleviating concerns over production cuts announced by major smelters in March. Data from China's National Bureau of Statistics showed that refined copper production rose by 9.2% year-over-year to 1.14 million metric tons, translating to an average daily output of 38,000 tons, up from 37,000 tons in March. Despite top smelters' earlier agreement to curb output due to shortages of copper ore and concentrate, production continued to rise. This increase in supply coincided with a decrease in domestic demand, leading Chinese copper sellers to offer discounts to buyers, turning the domestic premium negative. The rally in global copper prices, driven by fund inflows, has also dampened physical demand in China, the world's largest consumer of copper. This weak demand was reflected in the declining output of semi-finished copper products in March and April. Technically, the market is undergoing long liquidation, with a significant 29.56% drop in open interest, settling at 2829 contracts, while prices fell by 39 rupees. Copper finds support at 883.5, with potential further declines to test 870.8 levels. Resistance is now expected at 919.5, and a move above this level could see prices testing 942.8.

Trading Ideas:
* Copper trading range for the day is 870.8-942.8.
* Copper prices slipped as funds locked in profits from a rally to record highs.
* Copper inventory in warehouses monitored by the SHFE remained close to 300,000 tons.
* China's April refined copper output jumps 9% on – year


Zinc

Zinc prices experienced a 1.29% decline yesterday, settling at 271.75, driven by profit booking following earlier gains spurred by China's stimulus measures aimed at boosting construction demand. The commodity, essential in construction, had been facing challenges due to a property crisis in China, which saw unsold home inventories reaching an eight-year high. To tackle this slump, Chinese authorities unveiled significant support measures, including lowering minimum mortgage interest rates for first and second-time homebuyers and encouraging local governments to purchase homes at reasonable prices for conversion into affordable housing. These actions, combined with expectations of interest rate cuts, improved the industrial outlook for zinc. Despite these efforts, China's economic indicators paint a mixed picture. While retail sales rose by 2.3% year-on-year in April 2024, falling short of market forecasts and marking the softest gain in 15 months, industrial production expanded by 6.7%, surpassing expectations and indicating stronger growth across all sectors. However, new home prices continued to decline, dropping by 3.1% year-on-year in April, marking the tenth consecutive month of decrease and the sharpest decline since July 2015, despite Beijing's efforts to stabilize the property market and support economic recovery. From a technical standpoint, the zinc market witnessed long liquidation, with open interest declining by 18.51% to settle at 1,871 contracts, while prices fell by 3.55 rupees. Currently, zinc is finding support at 269, with further support expected at 266.3 if this level is breached. On the upside, resistance is likely at 276.1, and a move above could see prices testing 280.5.

Trading Ideas:
* Zinc trading range for the day is 266.3-280.5.
* Zinc dropped on profit booking after prices gained amid China’s stimulus measures for clues on future construction demand.
* China's industrial production expanded by 6.7% year-on-year in April 2024, faster than a 4.5% growth in the previous month.
* China's retail sales rose by 2.3% year-on-year in April 2024

aluminium

aluminium prices fell by 2.48% to settle at 241.5, influenced by a significant increase in China's aluminium imports. In April, China's imports of unwrought aluminium and products surged by 72.1% year-on-year to 380,000 metric tons, bringing the total imports for the first four months of the year to 1.49 million tons, an 86.6% increase compared to the same period last year. This surge in imports was largely due to higher shipments from Russia, which totaled 392,775 tons in the first quarter, up 127.7% from the previous year's 172,526 tons. The increased imports have led to a rise in aluminium stocks in China, with Shanghai Futures Exchange inventories standing at 231,765 tons, a 139.8% increase from the beginning of the year and nearing a one-year peak. This glut of aluminium in the Chinese market has exerted downward pressure on prices. Globally, primary aluminium output in April rose by 3.3% year-on-year to 5.898 million tonnes, according to the International Aluminium Institute (IAI). China's own primary aluminium production saw a 7.2% increase from the previous year, reaching 3.58 million metric tons in April. The average daily output in April was calculated at 119,333 tons, up from 115,806 tons in March. Technically, the market is under long liquidation, as evidenced by a 20.34% drop in open interest, settling at 1504 contracts, while prices decreased by 6.15 rupees. Aluminium is currently finding support at 237.7, with further potential downside to test 233.9 levels. Resistance is expected at 247.8, and a move above this level could see prices testing 254.1.

Trading Ideas:
* Aluminium trading range for the day is 233.9-254.1.
* Aluminium prices dropped as China's April aluminium imports jump 72.1% YOY
* Aluminium stocks on the SHFE stood at 231,765 tons, up 139.8% from the beginning of this year and near a one-year peak.
* Global aluminium output rises 3.3% year on year in April – IAI


Cotton 

Cotton candy prices edged up by 0.39% to settle at 55980, propelled by robust demand for Indian cotton from buyers in countries like Bangladesh and Vietnam. However, this uptrend was tempered by sluggish milling demand globally, exacerbated by prospects of a better crop in countries such as Australia. The International Cotton Advisory Committee (ICAC) projected increases in cotton-producing area, production, consumption, and trade for the upcoming season, 2024-25. Additionally, India's cotton stocks are expected to plummet by nearly 31% in 2023/24, reaching their lowest level in over three decades due to lower production and rising consumption. This decrease in stockpiles could limit exports from the world's second-largest producer, supporting global prices but potentially weighing on the margins of local textile companies. India's cotton production for the current season is estimated to be slightly lower at 30.97 million bales, with consumption expected to rise. However, exports are projected to increase to 2.20 million bales. Looking ahead to MY 2024/25, India's cotton production is estimated to decrease slightly to 25.4 million bales due to farmers shifting acreage to higher return crops. Meanwhile, China's cotton imports for MY 2024/25 are forecasted to increase to 2.4 million metric tons, driven by higher domestic and international demand for textile and apparel products. Technically, the cotton candy market is experiencing short covering, with a 13.4% drop in open interest and prices up by 220 rupees. Support is found at 55820, with potential downside to 55660 levels. Resistance is likely at 56120, with a possible move above leading to testing at 56260. This technical overview suggests a cautious sentiment amidst fluctuating demand dynamics and production forecasts, both domestically and internationally.

Trading Ideas:
* Cottoncandy trading range for the day is 55660-56260.
* Cotton gains as demand for India cotton continues to be strong from buyers
* 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 27082.75 Rupees dropped by -0.27 percent.


Turmeric

Turmeric prices surged by 3.67% yesterday, settling at 19,648 as farmers withheld stocks in anticipation of further price rises. The ongoing heatwave across India threatens to damage crop yields, exacerbating supply constraints and providing additional support to prices. The India Meteorological Department's forecast of continued hot weather suggests little relief in sight, with more heatwave days expected than usual for May. However, profit booking and increased supplies at the end of the harvesting season are capping the upside potential. Rainfall in southern India during April was significantly below normal, impacting crop growth. The Ministry of Agriculture's estimate projects a decrease in turmeric production for the 2023-24 season compared to the previous year. Additionally, the surge in prices has led to demand destruction, with consumers adopting a hand-to-mouth approach. Export and import data reflect fluctuations in trade activity. Turmeric exports during April-March 2024 decreased by 4.75% compared to the previous year, while imports dropped by 12.71%. However, there was a notable increase in exports in March 2024 compared to February 2024, indicating some recovery in trade activity. In terms of technical analysis, the turmeric market witnessed short covering, with a decline in open interest by 2.29% to settle at 16,430 contracts, while prices surged by 696 rupees. Currently, turmeric is finding support at 18,922, with further support expected at 18,194 if this level is breached. On the upside, resistance is likely at 20,182, and a move above could see prices testing 20,714.

Trading Ideas:
* Turmeric trading range for the day is 18194-20714.
* Turmeric prices gained as farmers are holding back stocks.
* 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 17974.15 Rupees gained by 1.74 percent.


Jeera

Jeera prices experienced a slight decline of -0.91% to settle at 29240, primarily driven by profit booking after a period of gains. The slowing arrival pace, with stockists and farmers holding onto their stocks for better price realization, had initially supported prices. However, the market saw a decrease in open interest by -12.2%, indicating long liquidation. Prices dropped by -270 rupees, signaling a temporary downturn. The export demand for jeera is expected to rise, bolstering the market sentiment despite profit booking. Global buyers prefer Indian jeera due to tightening global supplies, which further supports upward movement in prices. Additionally, aggressive buying by stockists adds to the positive outlook for jeera prices. The increase in sowing area and favorable weather conditions in major cumin-producing regions of Gujarat and Rajasthan resulted in a significant boost in production. Production estimates for Gujarat indicate a new record of 4.08 lakh tonnes, while Rajasthan also saw a substantial increase in cumin production by 53%. This surge in production, coupled with declining international cumin prices, is expected to drive exports higher. However, despite the positive export outlook, jeera exports during Apr-Mar 2024 witnessed a decline of 13.53% compared to the previous year, totaling 152,189.32 tonnes. Although there was a significant rise in exports in March 2024 compared to the previous month and year, the overall annual export volume remains lower. In the spot market, Unjha, prices ended at 30739.85 Rupees, down by -0.69%. Technical analysis suggests that jeera is finding support at 28440, with a possible further decline to 27640 levels. Resistance is expected at 30250, with a potential move above leading to testing at 31260.

Trading Ideas:
* Jeera trading range for the day is 27640-31260.
* Jeera dropped  on profit booking after prices gained as 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 30739.85 Rupees dropped by -0.69 percent.

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