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Gold

Gold fell -0.1% to 70668 yesterday as optimism over a ceasefire deal between Israel and Hamas, mediated by Egypt, weakened gold's safe-haven appeal. In April, the US economy created 175K jobs, falling short of market predictions of 243K, and the unemployment rate climbed to 3.9%, while pay growth lagged projections. US Fed funds futures now show a 78% possibility of a rate drop in September, up from 63% before the employment report. Physical gold demand in India remained weak despite a minor price adjustment as purchasers waited for an even greater drop, while Chinese premiums fell for the second week in a row owing to slow holiday demand. Indian dealers charged up to $1 per ounce above official domestic rates, compared to a $5 premium last week. In China, dealers charged premiums of $18-$20 per ounce above benchmark prices, down from the $20-$35 premiums recorded the previous week. In Singapore, gold was sold at prices ranging from par to $2 premiums, but in Hong Kong, merchants charged par to 2.25 premiums. In Japan, dealers sold gold for $0.5-$0.75 premiums, which was somewhat lower than the previous week's range. India's gold demand increased by 8% in the March quarter compared to the previous year, according to the World Gold Council (WGC).Technically, the market is in long liquidation, as open interest fell by -5.03% to settle at 17132, while prices fell by -68 rupees. Gold is now receiving support at 70120, and a move below could see prices test 69575 levels, while resistance is now likely to be seen at 71170, with a move above potentially seeing prices test 71675.
 

Trading Ideas:
* Gold trading range for the day is 69575-71675.
*  Gold dropped as optimism for a ceasefire agreement between Israel and Hamas, reduced safe-haven appeal.
*  US Fed funds futures now indicate a 78% chance of a rate cut in September, up from 63% prior to the jobs data release.
*  The US economy added 175K jobs in April, less than market expectations of 243K, and the unemployment rate rose to 3.9%.

Silver

Silver fell -0.39% to 81043 Tuesday, despite the fact that US Nonfarm Payrolls (NFP) statistics for April came in lower than projected. The US NFP data revealed that companies employed 175K job seekers, which was lower than the consensus of 243K and the previous figure of 315K, which had been revised higher from 303K. The unemployment rate climbs to 3.9%, when investors expected it to stay at 3.8%. The Average Hourly Earnings, which drives consumer spending and ultimately reflects inflation expectations, fell to 3.9%. Investors expected wage growth to slow to 4.0%, down from 4.1% in March. Monthly pay growth data increased at a slower rate of 0.2%, compared to the estimates and the previous reading of 0.3%. Weak labour demand and slow wage growth would push the Federal Reserve (Fed) to ease its restrictive policy framework, which it has been implementing for over two years. Currently, investors anticipate that the Fed will begin lowering interest rates after the September meeting. The Federal Reserve held interest rates steady, and Fed Chair Jerome Powell said that any future rate adjustments will be determined by economic statistics, with little chance of rate rises in the short term. In recent weeks, traders have reduced their expectations for the Fed's first rate decreases this year, citing strong economic statistics and sustained inflation.Technically, the market is under fresh selling, as open interest increased by 0.62% to settle at 24004 while prices fell by -320 rupees. Silver is now receiving support at 80365, and a move below could see prices test 79680 levels, while resistance is now likely to be seen at 81805, with a move above potentially seeing prices test 82560.
 

Trading Ideas:
*  Silver trading range for the day is 79680-82560.
*  Silver prices dropped despite the US Nonfarm data for April turned out weaker than expected
*  The US NFP report for April exhibited weak labor demand and soft wage growth.
*  Weak labor demand will boost Fed rate cut prospects for September.

Crude oil

Crude oil fell -0.83% yesterday to 6546 as receding worries of a larger war in the Middle East, evidence of increasing US crude supply, and rising uncertainty about demand outlook weighed on oil prices. Egypt spearheaded attempts this week to restart stalled peace talks between Israel and Hamas, with US Secretary of State Antony Blinken urging Hamas to accept Israel's ceasefire-for-hostages offer. Last week, the Energy Information Administration reported that U.S. crude oil and petrol stocks increased while distillate stockpiles declined. The EIA reported that crude stocks increased by 7.3 million barrels to 460.9 million barrels in the week ending April 26. Crude stockpiles at the Cushing, Oklahoma, delivery hub increased by 1.1 million barrels. Furthermore, poor expectations for US Federal Reserve interest rate decreases weighed on the outlook for global demand. Meanwhile, OPEC+ indicated it may prolong its voluntary production curbs of 2.2 million bpd beyond June if oil demand does not recover. According to the Energy Information Administration, U.S. commercial crude oil stockpiles increased by 7.3 million barrels to 460.9 million barrels in the week ending April 26, the highest level since June 2023. Technically, the market is in long liquidation, as open interest has dropped by -1.17% to settle at 12678, while prices have fallen by -55 rupees. Crude oil is now receiving support at 6508, and a move below could see prices test 6470 levels, while resistance is now likely to be seen at 6616, with a move above potentially seeing prices test 6686.
 

Trading Ideas:
*  Crudeoil trading range for the day is 6470-6686.
*  Crude oil dropped as fading concerns about a wider conflict in the Middle East.
*  Pressure also seen amid signs of robust US crude supplies and growing uncertainty on the demand outlook
*  Crude inventories rose by 7.3 million barrels to 460.9 million barrels, the EIA said.

Natural gas

Natural gas surged by 5.35% in yesterday's trading session, settling at 179.1, buoyed by a bullish rise in liquefied natural gas (LNG) exports and a continued reduction in output. The uptrend was, however, tempered by bearish forecasts projecting less demand over the next two weeks compared to previous expectations, coupled with persistent oversupply conditions in storage. The decline in US gas production by approximately 9% so far in 2024, attributed to various energy firms delaying well completions and scaling back drilling activities amidst a price slump in February and March, contributed to the market's bullish sentiment. Notable players such as EQT and Chesapeake Energy adjusted their operations, with Chesapeake poised to become the largest producer following its merger with Southwestern Energy. Financial firm LSEG reported a decrease in gas output in the Lower 48 US states to 96.3 billion cubic feet per day (bcfd) in May, compared to 98.1 bcfd in April, marking a notable decline from the monthly record of 105.5 bcfd in December 2023. Meteorologists' forecasts indicating near-normal to warmer-than-normal weather across the Lower 48 states until May 18 added further support to natural gas prices, potentially driving up demand for cooling purposes. Technically, the market witnessed short covering, with a significant drop in open interest by -11.24% to settle at 29,371 contracts, while prices surged by 9.1 rupees. Natural gas is currently finding support at 171.7, with a potential test of 164.3 levels if the support is breached. On the upside, resistance is anticipated at 183.3, with the possibility of prices testing 187.5 upon breaking above this level.

Trading Ideas:
*  Naturalgas trading range for the day is 164.3-187.5.
*  Natural gas gains amid a bullish rise in liquefied natural gas exports and a continued reduction in output.
*  However, upside seen limited as bearish forecasts for less demand over the next two weeks than previously expected.
*  U.S. gas production down about 9% in 2024 due to delayed well completions and reduced drilling activities.

Copper

Copper exhibited a robust performance in yesterday's trading session, closing up by 1.11% at 855.3, buoyed by several factors. A softer dollar following weak U.S. jobs data and revisions to forecasts indicating diminished supply due to mine disruptions contributed to the positive momentum. The International Copper Study Group's sharp reduction in its estimate for a global surplus this year, coupled with the suspension of operations at Cobre Panama, the world's largest open-pit copper mine, and power cuts affecting key mines in Zambia, added to supply concerns. On the demand side, the bullish outlook for copper remains supported by its integral role in electrification projects, indicating sustained demand over the longer term. Despite the Fed signaling a leaning towards eventual interest rate reductions, it reiterated the importance of gaining "greater confidence" in the trajectory of inflation before implementing rate cuts, hinting at cautious monetary policy adjustments. Interestingly, amid the backdrop of heightened demand and supply disruptions, Chinese copper producers are planning to export up to 100,000 metric tons of metal, marking the largest volume in 12 years. From a technical standpoint, the market witnessed short covering as open interest dropped by -3.46% to settle at 6632 contracts, while prices surged by 9.35 rupees. Copper is currently finding support at 847.2, with a potential test of 839.2 levels if this support is breached. Conversely, resistance is anticipated at 860, with a possibility of prices testing 864.8 upon breaking above this level.

Trading Ideas:
*  Copper trading range for the day is 839.2-864.8.
*  Copper rebounds on weak dollar after US jobs data
*  ICSG made a sharp cut to its estimate for a global surplus this year, to 162,000 tons from the 467,000 tons forecast in October.
*  Cobre Panama, the world’s largest open-pit copper mine was suspended, while power cuts in Zambia hit key mines.

Zinc

Zinc prices exhibited a modest increase of 0.37% in yesterday's trading session, settling at 257.8, propelled by concerns over supply disruptions and optimism surrounding China's economic recovery. The global zinc market witnessed a widening surplus, reaching 40,100 metric tons in February, compared to 12,300 tons in January, as reported by the International Lead and Zinc Study Group (ILZSG). Despite this surplus, the market sentiment remained positive due to various factors influencing supply dynamics. Nyrstar's Budel smelting operations in the Netherlands, with a capacity of 315,000 metric tons per year, are set to resume production during the week of May 13. Although the smelter will restart at reduced capacity, this development indicates a response to market conditions and underscores the demand for zinc. China, the world's largest zinc consumer, saw an increase in refined zinc production to 525,500 metric tons in March, marking a month-on-month growth of 4.57%. The total output from January to March was 1.595 million metric tons, surpassing expectations and indicating a year-on-year increase of 1.63%. Furthermore, a private survey from China revealed that factory activity expanded at its fastest pace in over a year in March, aligning with official readings and suggesting a strengthening industrial sector. Technically, the zinc market witnessed fresh buying momentum, with open interest rising by 4.4% to settle at 4,053 contracts, while prices climbed by 0.95 rupees. Currently, zinc finds support at 255.6, with a potential test of 253.3 levels if the support is breached. On the upside, resistance is anticipated at 259.4, with the possibility of prices testing 260.9 upon breaking above this level.

Trading Ideas:
*  Zinc trading range for the day is 253.3-260.9.
*  Zinc gains amid supply disruption concern and optimism around China's economic recovery.
*  The global zinc market surplus widened to 40,100 metric tons in February from 12,300 tons in January
*  Zinc production at Nyrstar's Budel smelting operations in the Netherlands will resume

Aluminium

Aluminium demonstrated resilience in yesterday's trading session, edging up by 0.58% to settle at 233.3. The market sentiment was influenced by ongoing production curbs in Yunnan, China, due to the annual dry season, which continued to constrain supply. The Aluminum Corp of China highlighted concerns regarding bauxite security, underscoring China's reliance on Guinea, which has faced disruptions following an explosion in a crucial fuel depository. Moreover, apprehensions over future restrictions on Russian metal buying outside LME contracts further clouded supply prospects, exacerbating market uncertainties. China's robust appetite for aluminium was evident in the significant surge in imports, with unwrought aluminium and products increasing by 89.8% to 380,000 metric tons in March, according to customs data. Import volumes for the first quarter soared by 92.3% year-on-year, reflecting strong demand dynamics. Despite production gains, China's primary aluminium output in March rose by 7.4% from the previous year, driven by elevated metal prices bolstering industry profitability. The uptick in manufacturing activity in China, expanding for the first time in six months, contributed to heightened demand for aluminium, which is widely used in automotive, housing, and packaging sectors. Technically, the market experienced short covering, with a drop in open interest by -3.85% to settle at 4145 contracts, while prices rose by 1.35 rupees. Currently, aluminium is finding support at 231.1, with potential downside testing at 228.9 levels if this support level is breached. Conversely, resistance is anticipated at 235.1, with a possible upward move leading to prices testing 236.9.

Trading Ideas:
*  Aluminium trading range for the day is 228.9-236.9.
*  Aluminium gains as smelters in Yunnan, remained subject to production curbs.
*  Supply prospects were further hurt by fears that Western consumers will be hesitant to engage in Russian metal buying outside LME contracts.
*  China's imports of unwrought aluminium and products jumped 89.8% at 380,000 metric tons in March

Cottoncandy

Cotton prices saw a modest increase of 0.52% in yesterday's trading session, settling at 57580, propelled by strong demand for Indian cotton from countries like Bangladesh and Vietnam. The USDA's weekly export sales report revealed a significant uptick in net sales, indicating robust demand for the 2023/2024 season. However, gains were tempered by expectations of improved crops in countries like Australia, limiting the upside potential. Looking ahead, the International Cotton Advisory Committee (ICAC) projects growth in cotton-producing areas, production, consumption, and trade for the next season, 2024-25. In India, cotton stocks are expected to decline 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 is anticipated to constrain exports from India, supporting global prices while potentially impacting the margins of local textile companies. For the marketing year 2024/25, India's cotton production is estimated to decrease slightly to 25.4 million 480 lb. bales, driven by the expectation of farmers shifting acreage to higher return crops. However, mill consumption is projected to increase, reflecting improving demand for yarn and textiles in major international markets. Additionally, China's cotton imports are forecasted to rise to 2.4 million metric tons (MMT) in 2024/25, driven by higher domestic and international demand for textile and apparel products. Technically, the cotton market witnessed short covering, with a drop in open interest by -0.26% and prices increasing by 300 rupees. Currently, Cottoncandy finds support at 57200, with a potential test of 56830 levels if the support is breached. On the upside, resistance is anticipated at 57800, with the possibility of prices testing 58030 upon breaking above this level.

Trading Ideas:
* Cottoncandy trading range for the day is 56830-58030.
* Cotton gains as demand for India cotton continues to be strong from buyers
* India's cotton stocks set to plunge 31% y/y to lowest in decades
* 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 experienced a decline in yesterday's trading session, settling down by -1.68% at 18832, primarily driven by expectations of new arrivals from the Marathwada region in Maharashtra. Despite the downward pressure, the downside was limited due to below-normal supplies and active festive demand in the market. Reports indicated significant new crop arrivals, with over 25% higher quantities compared to the previous week, particularly in Nanded, Nizamabad, and Erode. However, the Ministry of Agriculture and Farmers' Welfare's first advance estimate projected a decrease in turmeric production for the 2023-24 season, standing at 10.74 lakh tonnes compared to 11.30 lakh tonnes in the previous year. Additionally, demand destruction was observed as prices surged, with many consumers resorting to hand-to-mouth purchasing practices. On the export front, turmeric exports during Apr-Feb 2024 declined by 4.42% compared to the previous year, while imports dropped by 15.36% during the same period. Despite a rise in turmeric exports in February 2024 compared to January 2024, there was a decrease in exports from February 2023, indicating some volatility in international trade patterns. From a technical standpoint, the market witnessed long liquidation as open interest dropped by -0.18% to settle at 19530 contracts, while prices declined by -322 rupees. Currently, turmeric is finding support at 18590, with a potential test of 18346 levels if this support is breached. On the upside, resistance is expected at 19228, with a possibility of prices testing 19622 upon breaking above this level.
 

Trading Ideas:
* Turmeric trading range for the day is 18346-19622.
* Turmeric dropped as new arrivals are expected from the Marathwada region in Maharashtra.
* However, downside seen limited amid below normal supplies and active festive demand.
* 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 faced a decline of -1.38% in yesterday's trading session, settling at 24230, primarily due to expectations of increased arrivals putting pressure on the market. However, the downside was limited as global buyers continued to prefer Indian jeera amidst tightening global supplies. The market witnessed a substantial influx of 10000 to 12000 bags of jeera daily in Rajkot Mandi, surpassing demand levels. This surge in arrivals can be attributed to new arrivals in Gujarat and Rajasthan, with sowing areas witnessing significant expansions. In Gujarat alone, production is estimated to reach a new record of 4.08 lakh tonnes, marking a substantial increase from previous years. Similarly, Rajasthan's cumin production also surged by 53%, contributing to the overall increase in production across major cumin-producing regions in India. Despite the surge in production, trade analysts anticipate a significant increase in cumin exports, projecting figures to reach about 14-15 thousand tonnes by February 2024. This comes in contrast to the volatile period witnessed in 2023, where domestic prices soared, resulting in a decline in exports compared to previous years. Technically, the jeera market observed long liquidation, with a notable drop in open interest by -15.3% to settle at 1362 contracts, while prices decreased by -340 rupees. Currently, Jeera finds support at 23840, with a potential test of 23450 levels if the support is breached. On the upside, resistance is anticipated at 24880, with the possibility of prices testing 25530 upon breaking above this level.

Trading Ideas:
* Jeera trading range for the day is 23450-25530.
* Jeera dropped as there is a possibility of further increase in arrivals pressure in the market.
* However, downside seen limited as 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 25500 Rupees dropped by 0 percent.

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