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Gold

Gold prices declined by 0.47% yesterday, settling at 74,021, as investors re-evaluated the Federal Reserve's monetary policy stance in light of recent comments from Fed officials. Signs of a slowdown in US consumer inflation and stagnant retail sales have given the Fed more flexibility to consider easing monetary policies. While the Fed hasn't officially shifted its stance, market expectations are already factoring in potential rate cuts for 2024. This reassessment impacted gold prices, despite support from heightened geopolitical tensions and robust central bank purchases, particularly by China as it aims to reduce its dependence on the US dollar. China's efforts to stabilize its property sector have also bolstered expectations for continued strong retail demand for gold. However, this comes amidst concerns that high gold prices might lead some central banks to slow their purchases and as outflows from gold exchange-traded funds persist. In India, dealers offered discounts up to $10 per ounce over official domestic prices, an increase from the previous week's $7 discount. Notably, India's gold imports surged in April, more than doubling to $3.11 billion from $1.53 billion in March. In China, premiums ranged from $16 to $30 per ounce over benchmark spot prices, down from $26 to $35 the previous week. Technically, the market is experiencing long liquidation, with open interest dropping by 7.78% to 9,678 contracts, while prices decreased by 346 rupees. Gold finds support at 73,705, with a potential test of 73,390 levels if it falls below this point. Resistance is likely at 74,330, and a move above this level could see prices testing 74,640, indicating a mixed technical outlook in the near term.
 

Trading Ideas:
* Gold trading range for the day is 73390-74640.
* Gold dropped as investors reassessed Fed’s monetary policy outlook.
* Furthermore, the upward trend was supported by strong central bank buying
* India's April gold imports more than doubled to $3.11 billion, compared with $1.53 billion in March.

Silver

Silver prices experienced a slight retreat of 0.57% yesterday, settling at 94,725, pulling back from recent record highs as investors digested remarks from Federal Reserve officials. Despite limited interest from ETFs, physical sales of silver have surged as the metal appeared undervalued, particularly when compared to gold. The gold-to-silver ratio, which surpassed 90 in January, has narrowed to around 80 and is anticipated to decrease further to 70 if the Fed implements rate cuts while the US economy maintains resilience. This narrowing ratio reflects growing investor confidence in silver's potential. While recent US consumer inflation data and the monthly jobs report have bolstered expectations for Fed rate reductions in 2024, rising export and import prices and hawkish comments from policymakers have tempered these expectations. Nonetheless, silver continues to benefit from its utility in solar panels, with demand expected to reach a record high this year, contributing to the metal's fourth consecutive year of deficit. The Silver Institute industry association forecasts a 17% increase in the global silver deficit to 215.3 million troy ounces in 2024, driven by a 2% growth in demand, predominantly from robust industrial consumption, coupled with a 1% decline in total supply. Technically, the silver market is witnessing long liquidation, with open interest declining by 9.05% to 27,646 contracts, while prices dropped by 542 rupees. Silver is currently supported at 93,030, with a potential test of 91,340 levels if it breaks below this support. Resistance is anticipated at 96,180, and a move above this level could see prices testing 97,640, suggesting a cautious outlook in the near term amid market adjustments.
 

Trading Ideas:
* Silver trading range for the day is 91340-97640.
* Silver retreats from new record highs, as investors weighed the recent remarks from Fed officials.
* US consumer inflation data and key monthly jobs report bolstered the chances of Fed rate reductions in 2024.
* Prices continued to benefit from its use in solar panels, and push the market into its fourth consecutive deficit.

Crude oil

Crude oil prices declined slightly by -0.17% to settle at 6568, as the market showed little concern about immediate supply disruptions. US Energy Information Administration (EIA) data revealed that US crude stockpiles fell by 2.508 million barrels last week, marking the second consecutive weekly decline and surpassing expectations of a 1.362 million barrel draw. This data, alongside softer US consumer inflation, has bolstered expectations for potential rate cuts from the Federal Reserve, which could in turn stimulate economic growth and energy demand. Despite these positive indicators for demand, the International Energy Agency (IEA) revised its global demand growth forecast for this year downward by 140,000 barrels per day to 1.1 million barrels per day. Meanwhile, OPEC's latest report indicated that its member countries exceeded their production cap by 568,000 barrels per day in April, while maintaining robust demand projections of 2.25 million barrels per day for 2024 and 1.85 million barrels per day for 2025. Additionally, Azerbaijan's oil production decreased slightly to 476,000 barrels per day in April from 481,000 barrels per day in March. In the US, the EIA's monthly Drilling Productivity Report projected that oil output from the top shale-producing regions would rise to 9.85 million barrels per day in June, the highest level in six months.  Technically, the crude oil market is experiencing fresh selling pressure, with open interest rising by 4.03% to 5786 contracts while prices fell by 11 rupees. Crude oil is currently supported at 6507, with further support at 6445. On the upside, resistance is expected at 6612, and surpassing this level could see prices testing 6655.
 

Trading Ideas:
* Crudeoil trading range for the day is 6445-6655.
* Crude oil dropped as markets don’t appear too worried about oil supply
* EIA data showed that US crude stockpiles fell by 2.508 million barrels last week, declining for the second straight week.
* Azerbaijan oil production drops to 476,000 bpd in April, ministry says

Natural gas

Natural gas prices experienced a decline of 1.54% yesterday, settling at 223.6, driven by several factors impacting market sentiment. Signs that producers were no longer cutting output, coupled with concerns regarding the bankruptcy of a contractor involved in Exxon Mobil/Qatar Energies' Golden Pass LNG export plant in Texas, contributed to worries about potential delays in the project and a subsequent reduction in expected gas demand next year. Additionally, speculators cashed in their long bets after prices surged approximately 63% over the prior three weeks to reach a four-month high in the previous session. According to financial firm LSEG, gas output in the Lower 48 U.S. states declined to an average of 97.3 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April. However, the May average was slightly higher than the previous day, potentially suggesting that elevated prices are prompting drillers to gradually increase gas production. Meteorological forecasts indicate warmer-than-normal weather across the Lower 48 states from May 21-27 and again from June 2-5, with near-normal conditions expected from May 28 to June 1. LSEG anticipates gas demand in the Lower 48, including exports, to rise from 91.5 bcfd this week to 92.3 bcfd next week. Technically, the natural gas market is witnessing long liquidation, with a notable decrease in open interest by 14.89% to 16,400 contracts, alongside a price decline of 3.5 rupees. Natural gas currently finds support at 218.2, with a potential test of 212.9 levels if it breaks below this support. Resistance is likely at 231.1, and a move above this level could see prices testing 238.7, suggesting a cautious outlook amid market adjustments and potential supply concerns.
 

Trading Ideas:
* Naturalgas trading range for the day is 212.9-238.7.
* Natural gas eased on signs producers were no longer cutting output.
* Gas output in the Lower 48 U.S. states fell to an average of 97.3 billion cubic feet per day (bcfd) so far in May.
* Meteorologists projected weather across the Lower 48 states would be warmer than normal from May 21-27.


Copper

Copper prices experienced a slight decline of 0.14% yesterday, settling at 935.15, driven by profit booking activities following earlier gains fueled by bets of higher demand in China, the top consumer of the metal. The Chinese government's announcement of plans to purchase unsold housing inventory to address oversupply concerns and prevent defaults among distressed developers contributed to bullish sentiment. Additionally, the injection of CNY 1 trillion in stimulus through long-dated bond issuance, primarily aimed at infrastructure projects, further supported demand for copper, However, despite robust demand projections, concerns over low copper availability have hindered output forecasts for smelters in China, which account for over half of the global supply. The prospects of increased mine supply remain bleak, as the high costs associated with committing to new projects have incentivized major miners to focus on merger and acquisition activities rather than initiating new ventures. This trend was exemplified by BHP's recent attempt to acquire Anglo American, signaling a shift in strategic priorities within the industry. The Chilean Copper Commission revised its average copper price estimates upwards for both this year and next. Cochilco now anticipates average copper prices to reach $4.30 a pound for this year, up from $3.85 previously, and $4.25 a pound for next year, up from $3.90 previously. From a technical standpoint, the copper market is witnessing long liquidation, with a significant drop in open interest by 14.46% to 4,016 contracts, while prices decreased by 1.35 rupees. Copper is currently supported at 925.1, with a potential test of 915 levels if it falls below this support. Resistance is likely at 945.6, and a move above this level could see prices testing 956, indicating a cautious stance amid market dynamics and technical factors.
 

Trading Ideas:
* Copper trading range for the day is 915-956.
* Copper dropped on profit booking after prices rose as bets of higher demand in China magnified concerns of supply deficits.
* Low copper availability hampered output forecasts for smelters in China, responsible for over half of global supply
* Chile's Cochilco raises 2024, 2025 copper price estimates

Zinc

Zinc prices saw a marginal increase of 0.09% yesterday, settling at 275.3, against the backdrop of China's recent stimulus measures, which offered insights into future construction demand. As zinc plays a crucial role in construction, it has faced challenges due to the property crisis in China, where unsold home inventories have reached an eight-year peak. To tackle this slump, Chinese authorities introduced a historic support package, including lower minimum mortgage interest rates for first and second-time homebuyers and initiatives to convert unsold homes into affordable housing. These measures, combined with expectations of interest rate cuts, have bolstered the industrial outlook for zinc. China's economic indicators paint a mixed picture: while retail sales rose by 2.3% year-on-year in April 2024, missing market forecasts and marking the softest gain in 15 months, industrial production expanded by 6.7% year-on-year, surpassing expectations and indicating robust growth across all sectors. However, new home prices continued to decline, dropping by 3.1% year-on-year in April, despite Beijing's efforts to stabilize the property market and support economic recovery. Technically, the zinc market is experiencing short covering, with a notable drop in open interest by 9.68% to 2,296 contracts, while prices increased by 0.25 rupees. Zinc is currently supported at 272.2, with a potential test of 269.1 levels if it breaks below this support. Resistance is anticipated at 279.1, and a move above this level could see prices testing 282.9.
 

Trading Ideas:
* Zinc trading range for the day is 269.1-282.9.
* Zinc gains amid China’s recent 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 surged by 2.14% yesterday, closing at 247.65, buoyed by widespread gains in main base metals following China's announcement of fresh support for its struggling property sector. The surge in on-warrant LME stocks in Malaysian Port Klang ahead of the key delivery deadline of May 15th has raised concerns about uncertain supply for major Western clients. This increase in warrants in key warehouses reflects trading giants' strategic decisions to capitalize on new contract rules following US and UK sanctions on Russian aluminum, which have disrupted availability in the market. China's primary aluminium production witnessed a notable uptick in April, rising by 7.2% compared to the previous year, fueled by increasing prices for the metal both domestically and globally. The National Bureau of Statistics reported that China, the world's largest aluminium producer, churned out 3.58 million metric tons of primary aluminium in April. Average daily output also saw an uptick, reaching 119,333 tons in April, compared to 115,806 tons in March. Moreover, average profits for China's aluminium industry nearly doubled year-on-year to 3,615 yuan per ton, showing a substantial increase from the previous month, according to a report by research house Antaike. From a technical standpoint, the aluminium market is witnessing short covering, with a significant drop in open interest by 21.33% to settle at 1,888 contracts, while prices increased by 5.2 rupees. Aluminium currently finds support at 241.5, with a potential test of 235.2 levels if it falls below this support. Resistance is likely at 253.1, and a move above this level could see prices testing 258.4, indicating a cautiously optimistic outlook in the near term amid market adjustments and supply concerns.
 

Trading Ideas:
* Aluminium trading range for the day is 235.2-258.4.
* Aluminum rose after China announced fresh support for its ailing property sector.
* On-warrant LME stocks in Malaysian Port Klang continued to soar, extending concerns of uncertain supply
* China's primary aluminium production in April rose 7.2% from a year earlier, official data showed

Cottoncandy

Cottoncandy prices experienced a decline of 0.61% yesterday, settling at 55,760, primarily driven by concerns surrounding sluggish milling demand amidst muted global yarn demand. However, the downside was limited as India continued to witness strong demand for cotton from countries like Bangladesh and Vietnam, among others. Additionally, prospects of a better crop in countries such as Australia contributed to the market sentiment. The International Cotton Advisory Committee (ICAC) projected increases in the cotton-producing area, production, consumption, and trade for the next season, 2024-25. Notably, cotton stocks in India are expected to fall by nearly 31% in 2023/24, reaching their lowest level in more than three decades due to lower production and rising consumption.  Looking ahead to the marketing year 2024/25, India's cotton production is estimated to decrease by two percent, with a shift in acreage towards higher return crops. Import duty recension on extra-long staple (ELS) cotton is anticipated to result in higher imports. Meanwhile, China's cotton imports for the marketing year 2024/25 are forecasted to increase on the back of higher domestic and international demand for textile and apparel products.  Technically, the cottoncandy market is undergoing long liquidation, with a significant drop in open interest by 13.31% to settle at 306 contracts, while prices decreased by 340 rupees. Cottoncandy is currently finding support at 55,560, with a potential test of 55,360 levels if it falls below this support. Resistance is likely at 56,020, and a move above this level could see prices testing 56,280. This technical overview suggests a cautious sentiment prevailing in the market amidst evolving demand dynamics and technical factors.
 

Trading Ideas:
* Cottoncandy trading range for the day is 55360-56280.
* Cotton dropped as sluggish milling demand is still concerns amid muted demand of yarn in global market.
* 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 27199.75 Rupees dropped by -0.05 percent.

Turmeric

Turmeric prices surged by 6% to settle at 18952 as farmers withheld stocks in anticipation of further price hikes amidst concerns over the ongoing heat wave across India potentially damaging crop yields. The India Meteorological Department's forecast of continued hot weather in May adds to the worries, with little relief expected. However, profit booking and increased supplies towards the end of the harvesting season limited the upside. Reduced rainfall in April, particularly in southern India, further exacerbated supply concerns, as turmeric production for 2023-24 is estimated to decrease to 10.74 lakh tonnes compared to the previous year's 11.30 lakh tonnes. Despite the bullish outlook, there has been demand destruction as surging prices led many to adopt a hand-to-mouth approach. Nonetheless, regions like Sangli, Basmat, and Hingoli are witnessing increased demand for quality turmeric in anticipation of a rise in the sowing area. On the trade front, turmeric exports during Apr-Mar 2024 dropped by 4.75% compared to the previous year, while imports decreased by 12.71%. In March 2024, exports rose by 34.90% compared to February 2024 but declined by 7.37% compared to March 2023. Conversely, imports in March 2024 decreased by 24.67% compared to February 2024 but increased by 32.70% compared to March 2023. Technically, the turmeric market is witnessing fresh buying interest, with open interest rising by 1.88% to settle at 16815 contracts, accompanied by a price increase of 1072 rupees. Currently, turmeric is supported at 18344, with further support at 17736, while resistance is likely at 19256, with a potential move towards 19560 if surpassed.
 

Trading Ideas:
* Turmeric trading range for the day is 17736-19560.
* 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 17667.35 Rupees gained by 2.04 percent.

Jeera

Jeera prices surged by 6% yesterday, closing at 29,510, driven by a slowdown in arrival pace as stockists and farmers hesitated to release their stocks amidst better price realization. The arrival of jeera at major APMC mandis across India increased marginally, indicating a steady supply trend. Export demand is anticipated to rise at the current rate, supporting further upward movement in jeera prices. Robust export demand and aggressive buying by stockists also contributed to the upward momentum. Global buyers favored Indian jeera due to tightening global supplies, further bolstering prices. Increased sowing area and favorable weather conditions in major cumin-producing regions of Gujarat and Rajasthan led to a significant surge in production. Gujarat is estimated to produce a record 4.08 lakh tonnes of cumin, while Rajasthan's production increased by 53%. Despite volatile conditions in 2023, with domestic prices soaring, 2024 is expected to see an increase in exports due to higher production and declining international cumin prices. However, jeera exports during Apr-Mar 2024 witnessed a decline of 13.53% compared to the previous year, amounting to 152,189.32 tonnes. Nonetheless, there was a notable increase in exports in March 2024 compared to the previous month and the same period last year. From a technical perspective, the jeera market is undergoing short covering, with a significant drop in open interest by 6.7% to settle at 3,468 contracts, while prices increased by 1,670 rupees. Jeera is currently finding support at 28,830, with a potential test of 28,160 levels if it falls below this support. Resistance is likely at 29,840, and a move above this level could see prices testing 30,180.
 

Trading Ideas:
* Jeera trading range for the day is 28160-30180.
* Jeera 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 30823.45 Rupees gained by 0.18 percent.

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