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Gold

Gold prices saw a notable uptick of 0.72% yesterday, settling at 71639, attributed to a slight decline in the dollar index following unexpected surges in initial jobless claims, signaling softness in the labor market and potentially paving the way for a Fed interest rate cut. The increase in Americans filing for unemployment benefits, reaching a 6-month high, adds weight to the argument for monetary easing. Consequently, the likelihood of a rate reduction in September rose to 69%, reflecting market sentiment post-claims release. However, conflicting signals emerge from Fed policymakers, with some suggesting rates will remain elevated for a while longer. Meanwhile, Bank of England policymakers hinted at further support for a rate cut, aligning with expectations for ECB to lower borrowing costs in June. In a global context, the People's Bank of China's continued bullion reserves accumulation for the 18th consecutive month is notable. Yet, April marked a significant decline in purchases compared to previous months, signaling a potential shift in sentiment as record-high gold prices may be tempering central bank enthusiasm. Technically, the market exhibits signs of short covering, evidenced by a drop in open interest by -6.69% to settle at 14732, coupled with a price increase of 512 rupees. Currently, gold finds support at 71110, with a potential test of 70575 levels below, while resistance is anticipated at 71945, with a potential upswing to 72245 upon breach. This suggests a cautious market stance amidst macroeconomic uncertainties and evolving central bank policies, with investors closely monitoring indicators for further direction in gold prices.
 

Trading Ideas:
* Gold trading range for the day is 70575-72245.
* Gold gains as dollar index fell slightly after initial jobless claims unexpectedly soared.
* The gains of Americans filing new claims for unemployment benefits increased more than expected last week.
* The likelihood of a rate reduction in September increased to 69% from 65% before the claims release.

Silver

Silver prices surged by 1.81% yesterday, closing at 84499, driven by a significant increase in initial jobless claims in the US, which heightened expectations of a Federal Reserve interest rate cut. Remarks from several Fed officials, including Richmond Fed President Barkin, Fed Bank of New York President Williams, and Fed Bank of Minneapolis President Kashkari, supported this view, reinforcing the narrative of a softening labor market. The rise in jobless claims, surpassing expectations, indicates ongoing challenges in the labor market's recovery, with seasonal factors contributing to the uptick. Despite the labor market's gradual rebalancing, fueled by previous interest rate hikes aimed at curbing overall economic demand, concerns persist regarding inflationary pressures. Federal Reserve Bank of Boston President Susan Collins emphasized the need for a cooldown in economic activity to align demand with supply and facilitate a sustainable return of inflation to the central bank's 2% target. From a technical standpoint, the silver market witnessed fresh buying interest, as evidenced by an 8.29% increase in open interest, coupled with a substantial price uptick of 1505 rupees. Support for silver is identified at 83545, with potential downside testing at 82585 levels. On the upside, resistance is anticipated at 85020, with a breakthrough potentially leading to a test of 85535. However, investors should remain vigilant for any shifts in fundamental drivers that could impact silver's price trajectory in the near term.
 

Trading Ideas:
* Silver trading range for the day is 82585-85535.
* Silver gains after initial jobless claims unexpectedly soared to 6-month highs
* Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000.
* Fed’s Collins said that the U.S. economy needs to cool off as an avenue toward getting inflation back to the central bank’s 2% target.

Crude oil
Crude oil prices saw a modest uptick of 0.29% yesterday, closing at 6606, buoyed by declining U.S. crude inventories and robust Chinese imports, signaling promising demand prospects in the world's largest oil-consuming nations. The Energy Information Administration's report indicating a 1.4 million barrel decrease in U.S. crude inventories to 459.5 million barrels contributed to market optimism. Additionally, the U.S. Energy Department's intention to purchase up to 3.3 million barrels of oil to replenish the Strategic Petroleum Reserve (SPR) underscored efforts to bolster supply security. Despite recent inventory adjustments, the SPR remains near 40-year lows following significant drawdowns prompted by geopolitical events, including Russia's invasion of Ukraine. The Biden administration's decision to halt oil purchases for the reserve due to elevated crude prices reflects cautious fiscal management. Furthermore, the U.S. Energy Information Administration revised its global oil demand growth forecasts downward while increasing production estimates outside OPEC, leading to a more balanced market outlook. However, concerns persist over the disparity between demand expectations and supply growth, particularly in developed economies, signaling potential challenges ahead. From a technical perspective, the market witnessed short covering, evidenced by a substantial drop in open interest by -22.82% to settle at 7328, coupled with a price increase of 19 rupees. Currently, crude oil finds support at 6575, potentially testing 6544 levels below, while resistance is anticipated at 6656, with a potential upswing to 6706 upon breach. This suggests a cautious yet optimistic market sentiment, with investors closely monitoring supply-demand dynamics and geopolitical developments for further price direction in crude oil.
 

Trading Ideas:
* Crudeoil trading range for the day is 6544-6706.
* Crude oil prices rose as falling U.S. crude inventories and higher Chinese imports supported.
* US crude stockpiles fall, products post surprise build, EIA says
* US seeks to buy more than 3 mln barrels of oil for SPR, Energy Department says

Natural gas
Natural gas prices surged by 4.71% yesterday, closing at 191.1, driven by a smaller-than-expected storage build in the US. Despite market expectations of an 87 billion cubic feet (bcf) increase in gas storage, utilities added only 79 bcf, contributing to a significant rally in prices. Notably, gas stockpiles are currently 33.3% higher than the seasonal average, indicating ample supply in the market. Forecasts suggest heightened demand for the upcoming weeks, coupled with a continuous decline in output, which has dropped by approximately 2.3 bcfd over the past six days, hitting a preliminary 16-week low. Additionally, natural gas flow to Freeport LNG's export plant in Texas is expected to reach a 16-week peak, signaling a potential return to full power. The startup and shutdown of Freeport and other US liquefied natural gas (LNG) export plants often influence global gas prices significantly. In May, gas output in the Lower 48 US states averaged 96.8 bcfd, down from 98.1 bcfd in April and significantly lower than the monthly record of 105.5 bcfd in December 2023. Daily output is projected to decline by approximately 3.5 bcfd over the past four days, reaching a preliminary 16-week low of 94.3 bcfd. From a technical standpoint, the natural gas market observed short covering, with a decrease of -0.96% in open interest, accompanied by a price increase of 8.6 rupees. Support for natural gas is identified at 183.2, with potential downside testing at 175.3 levels. Conversely, resistance is expected at 196.1, with a breakthrough potentially leading to a test of 201.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 175.3-201.1.
* Natural gas rose after a smaller-than-expected storage build.
* US utilities added 79 billion cubic feet (bcf) of gas into storage last week
* US natgas flows to Freeport LNG in Texas seen at 16 – week high

Copper
Copper prices saw a modest uptick of 0.57% yesterday, closing at 859.85, as markets continued to weigh near-term demand dynamics against concerns of potential supply deficits. China, the world's largest producer of refined copper, demonstrated resilience in its demand for copper ore, with imports surging by 11.8% in April compared to the previous year, despite sharp price increases. This trend aligned with the country's robust factory activity, as indicated by PMI data during the period. However, setbacks in key mines and pessimistic future availability of copper ore have led to concerns among Chinese smelters, potentially resulting in a 10% output cut this year. While demand for copper ore remained strong, imports of unwrought copper and products in China dipped by 7.6% in April compared to March, reflecting dampened buying appetite amidst soaring global prices. The surge in copper prices, fueled by raw material shortages and optimism in sectors like new energy and AI, weighed on buying sentiment, as indicated by a drop in the Yangshan premium to zero for the first time on record in late April, signaling subdued import demand. Technically, the copper market observed fresh buying interest, with a 2.43% increase in open interest to settle at 6956, accompanied by a price increase of 4.85 rupees. Currently, copper finds support at 853.9, potentially testing 848 levels below, while resistance is anticipated at 863.3, with a potential upward move to 866.8 upon breach. This suggests a nuanced market sentiment, with investors monitoring both demand-side dynamics and supply-side challenges for further direction in copper prices.
 

Trading Ideas:
* Copper trading range for the day is 848-866.8.
* Copper gains as markets continued to assess near-term demand and concerns of supply deficits.
* Data from China showed that imports of copper ore jumped by 11.8% from the previous year to 2.35 million tonnes in April
* China's unwrought copper imports fell 7.6% in April from the prior month, customs data showed

Zinc

Zinc prices edged up by 0.23% yesterday, settling at 258.8, buoyed by positive signs in China's trade data, which showed growth in both exports and imports in April, indicating a rebound in domestic and overseas demand. This improvement in China's trade activity bodes well for the global zinc market, as China is a major consumer and producer of the metal. Additionally, the decision by Swedish mining group Boliden to restart production at its Tara zinc mine in Ireland further supported market sentiment. The mine, which was paused in 2023 due to low zinc prices, will resume operations in the fourth quarter of this year, with full production expected from January 2025. Similarly, Nyrstar's Budel smelting operations in the Netherlands will resume production, partly due to higher zinc prices, after being suspended in January. The flexibility of operations at Budel since late 2021 reflects the company's strategic response to market conditions. However, despite these positive developments, the global zinc market recorded a surplus of 40,100 metric tons in February, according to data from the International Lead and Zinc Study Group (ILZSG), widening from 12,300 tons in January. This surplus indicates ongoing challenges in balancing zinc supply and demand, which could influence price dynamics in the near term. From a technical perspective, the zinc market witnessed fresh buying interest, with a 4.45% increase in open interest, coupled with a modest price uptick of 0.6 rupees. Support for zinc is identified at 256.1, with potential downside testing at 253.4 levels. On the upside, resistance is expected at 260.7, with a breakthrough potentially leading to a test of 262.6.
 

Trading Ideas:
* Zinc trading range for the day is 253.4-262.6.
* Zinc gains as some positive signs were seen in China's overall trade data.
* Swedish mining group Boliden will restart production at its Tara zinc mine in Ireland
* The global zinc market surplus widened to 40,100 metric tons in February from 12,300 tons in January

Aluminium

Aluminium prices edged up by 0.82% yesterday, settling at 234.25, as market attention focused on China's aluminium export data and inventory levels. China, a major player in the global aluminium market, reported a 12.6% year-on-year increase in aluminium exports in April, contributing to a total of 1.998 million metric tons exported in the first four months of the year. Despite the rise in exports, concerns over inventory levels emerged, with a weekly increase of 6,500 tons in bonded zone inventories, reaching a total of 43,800 tons. While efforts to stimulate consumption and support real estate continued, downstream consumption remained subdued due to high aluminium prices. The market also observed production constraints in Yunnan due to the annual dry season, further impacting supply dynamics. Additionally, fears of future restrictions on Russian metal buying outside LME contracts added to supply concerns, potentially influencing Western consumer behavior. On the demand side, China's imports of unwrought aluminium surged by 89.8% in March and continued to rise in the first quarter, driven by robust demand and industry profitability. From a technical perspective, the aluminium market experienced short covering, with a 3.3% drop in open interest to settle at 3870, coupled with a price increase of 1.9 rupees. Currently, aluminium finds support at 232.4, potentially testing 230.4 levels below, while resistance is expected at 235.4, with a potential upswing to 236.4 upon breach. This suggests a nuanced market sentiment, with a delicate balance between supply dynamics, demand factors, and technical indicators shaping price movements in the aluminium market.
 

Trading Ideas:
* Aluminium trading range for the day is 230.4-236.4.
* Aluminium gains as China exported unwrought aluminum and aluminum semis in April, up 12.6% YoY
* Aluminum inventory in Shanghai bonded zone was 38,300 tons, and the inventory in Guangdong bonded zone was 5,500 tons.
* Supporting real estate and stimulating consumption still dominated the market.

Cottoncandy

Cotton candy prices dipped slightly by -0.28% yesterday, settling at 57420, primarily influenced by prospects of a stronger crop in countries like Australia. However, the downside was limited as demand for Indian cotton remained robust, particularly from buyers in countries such as Bangladesh and Vietnam. The International Cotton Advisory Committee (ICAC) projected an increase in cotton-producing areas, production, consumption, and trade for the upcoming 2024-25 season, indicating a positive outlook for the cotton market. India's cotton stocks are anticipated to decline by nearly 31% in the 2023/24 marketing year, reaching their lowest level in over three decades due to lower production and rising consumption. This reduction in stockpiles is expected to constrain exports from the world's second-largest producer, supporting global prices while potentially impacting the margins of local textile companies. Looking ahead, India's cotton production for the marketing year 2024/25 is estimated to decrease by two percent, with farmers likely to shift acreage to higher return crops. However, mill consumption is forecasted to increase by two percent, driven by improving demand in major international markets. Import estimates for extra-long staple (ELS) cotton have also risen by 20%, reflecting the market's dynamics and demand patterns. Meanwhile, China's cotton imports for the 2024/25 marketing year 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 experienced long liquidation, with a drop in open interest by -0.52% and prices decreasing by -160 rupees. Support for cotton candy is identified at 57320, with potential downside testing at 57220 levels, while resistance is likely at 57520, with a breakthrough potentially leading to a test of 57620.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57220-57620.
* Cotton dropped amid prospects of a better crop in countries such as Australia.
* However downside seen limited as demand for India cotton continues to be strong
* 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 experienced a slight decline of -0.78% yesterday, settling at 18730, primarily attributed to expectations of new arrivals from the Marathwada region in Maharashtra. However, the downside remains limited due to below-normal supplies and active festive demand in the market. Despite the new arrivals, reports indicate that supplies are still below average, maintaining some support for prices. Around 5,400 bags of new arrivals were reported in the Nanded spot market, while Nizamabad and Erode also saw increased arrivals compared to the previous week. The Ministry of Agriculture and Farmers’ Welfare’s first advance estimate suggests a slight decrease in turmeric production for 2023-24 compared to the previous year. Additionally, demand destruction has been observed as prices surged, leading to a shift towards hand-to-mouth purchasing behavior. However, turmeric-growing regions such as Sangli, Basmat, and Hingoli are witnessing good demand for quality turmeric, driven by expectations of an increase in sowing area in the current year. On the export front, turmeric exports during Apr-Feb 2024 declined slightly compared to the previous year, while imports showed a decrease as well. Notably, there was a significant rise in imports in February 2024 compared to January 2024, indicating fluctuating trade patterns. From a technical perspective, the turmeric market observed long liquidation, with a drop in open interest by -0.79% to settle at 19570, coupled with a price decrease of -148 rupees. Currently, turmeric finds support at 18590, potentially testing 18450 levels below, while resistance is likely at 18910, with a potential upswing to 19090 upon breach.
 

Trading Ideas:
* Turmeric trading range for the day is 18450-19090.
* 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 experienced a decline of -0.75% yesterday, settling at 25190, primarily due to the anticipation of further increases in arrivals, leading to pressure in the market. However, the downside was limited by robust export demand and aggressive buying by stockists. Indian jeera remained preferred among global buyers due to tightening global supplies, despite the influx of 10,000 to 12,000 bags daily in Rajkot Mandi, surpassing current market demand. The increase in sowing area and favorable weather conditions in major cumin-producing regions of Gujarat and Rajasthan resulted in a significant surge in production. Gujarat is estimated to produce a record-breaking 4.08 lakh tonnes of cumin, while Rajasthan also saw a 53% increase in production. This surge, doubling compared to the previous year, is expected to lead to a substantial increase in cumin exports, with estimates suggesting exports could reach about 14-15 thousand tonnes by February 2024. However, despite the positive outlook for exports, jeera exports during Apr-Feb 2024 witnessed a decline of 23.75% compared to the same period in 2023. In February 2024 alone, exports dropped by 11.54% compared to January 2024 and by 3.49% compared to February 2023. Technically, the jeera market observed fresh selling, with a significant increase in open interest by 12.01% and prices declining by -190 rupees. Support for jeera is identified at 24850, with potential downside testing at 24520 levels, while resistance is likely at 25590, with a breakthrough potentially leading to a test of 26000.
 

Trading Ideas:
* Jeera trading range for the day is 24520-26000.
* 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.

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