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Gold

Gold prices rose by 0.37% to settle at 72,668, driven by a decline in the yield on the US 10-year Treasury note to 4.28%, near three-week lows. This movement in yields reflects traders' speculation on the future monetary policy stance of the Federal Reserve, with increased bets that the Fed will cut interest rates later this year. During his testimony before Congress, Fed Chair Jerome Powell emphasized that rate cuts would not be considered until there is clear evidence of inflation moving sustainably towards the 2% target, despite acknowledging some progress on inflation and a stabilized labor market. Market participants are betting on two rate cuts in 2024, with a 75% probability of a reduction in September. In international developments, the People's Bank of China did not increase its gold reserves for the second consecutive month, maintaining its holdings at 2,264 tonnes. Gold imports to China via Hong Kong fell by 38% in April compared to March, reflecting a decline in demand from the world's largest gold consumer. This decline contrasts with high consumption levels recorded in the first quarter of 2024. Indian dealers provided discounts up to $11 an ounce over official domestic prices, while Chinese dealers charged premiums between $11 and $24 per ounce over international spot prices. Technically, the gold market experienced short covering, with open interest dropping by 2.19% to settle at 12,301 contracts. Gold prices found support at 72,460, with further downside testing possible at 72,245 levels. Resistance is expected at 72,930, and a move above this level could see prices testing 73,185.

Trading Ideas:

* Gold trading range for the day is 72245-73185.

* Gold gains as the yield on the US 10-year Treasury edged lower to three-week lows

* Investors continue to bet on two rate cuts this year, with the odds for a September reduction standing around 75%.

* China halts gold purchases for the second month, while other central banks boost reserves

Silver

Silver prices fell by 0.15% to settle at 92,832, following comments from Federal Reserve Chair Jerome Powell, which suggested a stronger case for interest rate cuts. Powell acknowledged improved inflation conditions but emphasized the need for more positive data before considering policy loosening. Market expectations, as reflected by the CME Group's FedWatch Tool, indicate a 75% chance of a rate cut in September, with another cut anticipated by December. This sentiment was bolstered by soft U.S. economic data, including lower year-ahead consumer inflation expectations at 3% in June, down from 3.2% in May, rising unemployment, contracting services activity, and weak private employment figures. Despite the dip in prices, demand for silver from the solar panel sector continued to lend support to the market. In India, the world's largest silver consumer, imports surged in the first four months of 2024, surpassing the total imports for all of 2023. This increase is attributed to rising demand from the solar panel industry and investor bets on silver's outperformance relative to gold. India imported a record 4,172 metric tons of silver from January to April, significantly higher than the 455 tons imported during the same period last year, with almost half of these imports coming from the United Arab Emirates to benefit from lower import duties. Technically, the silver market experienced long liquidation, with open interest decreasing by 0.17% to settle at 23,312 contracts. Silver prices are currently finding support at 92,410, with potential testing of lower levels at 91,995 if this support is breached. On the upside, resistance is expected at 93,510, and a move above this level could see prices testing 94,195.

Trading Ideas:

* Silver trading range for the day is 91995-94195.
* Silver steadied after Fed Powell's comments suggested the case for interest rates cuts is getting stronger
* Powell maintained a cautious stance, acknowledging improved inflation.
* Soft US economic data reinforced expectations for rate reductions from the US central bank

Crudeoil

Crude oil prices edged up by 0.41% to settle at 6,858, bolstered by a larger-than-expected decline in US crude stockpiles as reported by the Energy Information Administration (EIA). The EIA highlighted that crude inventories fell by 3.4 million barrels to 445.1 million barrels for the week ending July 5, significantly more than the anticipated 1.3 million-barrel draw. Crude stocks at the Cushing, Oklahoma delivery hub also decreased by 702,000 barrels. Additionally, refinery crude runs increased by 317,000 barrels per day, with utilization rates rising by 1.9 percentage points. Conversely, US gasoline stocks dropped by 2 million barrels to 229.7 million barrels, surpassing the forecasted 0.6 million-barrel draw, while distillate stockpiles surged by 4.9 million barrels to 124.6 million barrels, contrary to the expected 0.8 million-barrel rise. The EIA projects global oil demand to reach 104.7 million barrels per day (bpd) by 2025, slightly exceeding the anticipated supply of 104.6 million bpd, suggesting a potential future deficit. This outlook is reinforced by OPEC's prediction of strong growth in global oil demand, expecting a rise of 2.25 million bpd in 2024 and 1.85 million bpd in 2025, unchanged from previous forecasts. On the technical front, the crude oil market witnessed short covering, indicated by a 12.09% drop in open interest to settle at 4,536 while prices increased by 28 rupees. Currently, crude oil is finding support at 6,775, with a potential test of 6,692 if this support level is breached. On the upside, resistance is likely at 6,920, and a move above this level could see prices testing 6,982.

Trading Ideas:

* Crudeoil trading range for the day is 6692-6982.
* Crude oil gains after the EIA reported a larger-than-expected decline in US crude stockpiles.
* OPEC sticks to 2024 oil demand view, sees strong travel season
* OPEC said world oil demand will rise by 2.25 mbpd in 2024 and by 1.85 million bpd in 2025.
 

Naturalgas

Natural gas prices fell by 2.11% to settle at 194.9, influenced by forecasts predicting lower demand for the upcoming week and recent increases in production. Additionally, the temporary shutdown of the Freeport LNG facility in Texas due to Hurricane Beryl contributed to a decline in the amount of gas flowing to LNG export plants. The U.S. Energy Information Administration (EIA) projected that natural gas production would slightly decline in 2024 to 103.5 billion cubic feet per day (bcfd) from a record 103.8 bcfd in 2023. The EIA also anticipated that domestic gas consumption would rise to a record high of 89.4 bcfd in 2024, up from 89.1 bcfd in 2023, before slightly easing to 89.2 bcfd in 2025. In line with these projections, data from financial firm LSEG indicated that gas output in the Lower 48 U.S. states averaged 102.4 bcfd so far in July, up from 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. This increase follows a period where many producers reduced drilling activities due to low prices. U.S. natural gas production had previously hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists project that weather conditions across the Lower 48 states will remain hotter than normal through at least July 24, potentially influencing demand. On the technical front, the natural gas market is under fresh selling pressure, evidenced by a 7.3% increase in open interest to settle at 35,676 while prices dropped by 4.2 rupees. Currently, natural gas prices are finding support at 191.5, with a further test at 188 levels if this support is breached. On the upside, resistance is likely to be encountered at 199.1, and a move above this level could see prices testing 203.2.

Trading Ideas:

* Naturalgas trading range for the day is 188-203.2.
* Natural gas eased on forecasts for less demand, recent increases in output.
* Pressure also seen amid drop in the amount of gas flowing to LNG export plants after Freeport LNG in Texas shut for Hurricane Beryl.
* US natgas output to decline in 2024, while demand rises to record high, EIA says
 

Copper

Copper prices settled marginally lower by 0.02% at 868.7 due to signs of an easing supply shortage in China. China's top copper smelters have set third-quarter guidance for copper concentrate processing treatment and refining charges (TC/RCs) at $30 per metric ton and 3.0 cents per pound. This indicates expectations of a slight alleviation in supply constraints in the coming months. Consumer prices in China rose less than expected in June, while producer deflation persisted for the 21st consecutive month, signaling weak demand. China's refined copper output rose 8.2% in the first five months to 5.54 million tons, driven by increased capacity among smelters. In Chile, state miner Codelco's copper production rose slightly by 0.7% year-on-year to 111,700 metric tons in May. Despite weak physical consumption, China's unwrought copper imports in May rose 15.8% year-on-year to 514,000 metric tons, surpassing market expectations. This increase came despite record high copper prices and weak demand. Imports of copper concentrate in May fell 11.7% year-on-year to 2.26 million tons, while total imports for the first five months of 2024 were up 2.7% year-on-year at 11.59 million tons. The global refined copper market showed a 13,000 metric tons surplus in April, compared with a 123,000 metric tons surplus in March. Technically, the copper market is under long liquidation, with a slight drop in open interest by 0.66% to settle at 6899. Prices are finding support at 862.3, with a potential test of 856 levels below that. Resistance is now likely at 875.7, and a move above this level could see prices testing 882.8.

Trading Ideas:

* Copper trading range for the day is 856-882.8.
* Copper rose amid signs that China's smelters expected the supply shortage of copper concentrates
* China's refined copper output grew 8.2% in the first five months to 5.54 million tons this year
* Chile's Codelco copper output edges up in May
 

Zinc

Zinc prices rose by 0.7% to 273.6, driven by expectations of stronger demand from China. Optimism over Chinese demand has been bolstered by the upcoming Communist Party's third plenum from July 15-18, which is expected to focus on economic policy and reforms. In the Shanghai Bonded Zone, zinc inventory increased by 1,500 metric tons week-on-week to 15,000 metric tons. MMG Ltd's halt in operations at the mill of its Dugald River zinc mine in Australia for about two months of repair work has further tightened the already constrained zinc concentrates market. Investors are keenly assessing the potential impact of anticipated Chinese stimulus measures, particularly those aimed at supporting the country’s property market, which could drive demand for construction materials, including zinc. Data indicating ongoing distress in home demand has raised expectations that the Chinese government may announce supportive measures for the debt-ridden property sector in the upcoming Third Plenum. On the supply side, zinc inventories in warehouses registered with the London Metal Exchange (LME) rebounded by 9% to their highest level in nearly three months, suggesting an increase in surplus metal. In late February, LME zinc stocks reached their highest levels since May 2021 at 276,100 tons but have since declined by 13% until Friday. Technically, the zinc market is experiencing short covering as evidenced by a 6.69% drop in open interest to settle at 2582 while prices increased by 1.9 rupees. Zinc is currently supported at 271, with a potential test of 268.4 levels below that. Resistance is likely to be seen at 275.3, and a move above this level could see prices testing 277.

Trading Ideas:

* Zinc trading range for the day is 268.4-277.
* Zinc gains as prospects of stronger demand from China triggered short-covering.
* China's MMG Ltd has halted operations at a mill at its Dugald River zinc mine in Australia for about two months of repair work.
* Zinc inventories in warehouses registered with LME rebounded 9% to their highest level in nearly three months
 

Aluminium

Aluminium prices fell by 0.61% to 228.95 due to disappointing economic data from China, the world's largest consumer of the metal. China's primary aluminium production is nearing last year's record highs, with output increasing by 5% year-on-year to 3.65 million metric tons in May, according to the International Aluminium Institute. National production is now close to an annualised 43.0 million tons, near the record highs seen in late 2022. The People's Bank of China reiterated its commitment to supportive monetary policies to bolster economic stability, yet concerns over weak economic data continue to weigh on market sentiment. The U.S. Manufacturing PMI rose to a three-month high of 51.7 in June 2024 from 51.3 in May, exceeding forecasts of 51, which provided some global economic optimism but was insufficient to lift aluminium prices significantly. Global primary aluminium output rose 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. China's aluminium production specifically increased by 7.2% to 3.65 million tonnes in May compared to the previous year. For the first five months of the year, China's output reached 17.89 million tonnes, up 7.1% from the same period last year. China's aluminium imports surged by 61.1% in May from a year earlier, driven by rising shipments from Russia. Technically, the aluminium market is experiencing fresh selling, indicated by a 1.2% gain in open interest to settle at 3786 while prices dropped by 1.4 rupees. Aluminium is currently supported at 228.2, with a potential test of 227.3 levels below that. Resistance is likely to be seen at 230, and a move above this level could see prices testing 230.9.

Trading Ideas:

*Aluminium trading range for the day is 227.3-230.9.
* Aluminium dropped as disappointing economic data in top consumer China dampened market sentiment.
* China’s increased production by 5% year-on-year to 3.65 million metric tons in May
* Domestic alumina supply has struggled to keep up with demand from the smelter restarts in Yunnan.

 Cottoncandy

Cottoncandy prices settled down by 0.29% at 58000 on expectations of favorable weather boosting supplies from key growing regions. Despite this, the downside was limited due to delayed shipments from the US and Brazil, which triggered demand for Indian cotton from mills in neighboring countries. A firm trend in cottonseed prices is also supporting cotton prices, even as sowing for the kharif 2024 season has begun in the southern states of Karnataka, Telangana, and Andhra Pradesh following the onset of monsoon rains. The trade anticipates an increase in cotton acreage in Telangana, where some chili farmers are likely to switch to cotton due to weak prices for chili. In North India, where cotton planting begins early from mid-April, acreage is expected to drop by about a fourth due to increased pest infestation in recent years and rising labor costs. For the 2024/25 US cotton projections, higher beginning and ending stocks are expected compared to the previous month, while projected production, domestic use, and exports remain unchanged. The 2024/25 season average upland farm price is down 4 cents from the May forecast to 70 cents per pound due to a decline in new-crop cotton futures. Ending stocks are projected to be 400,000 bales higher at 4.1 million, or 28% of use. The global 2024/25 cotton balance sheet shows increased beginning stocks, production, and consumption, with unchanged world trade, leading to projected world ending stocks being 480,000 bales higher than in May at 83.5 million. In Rajkot, a major spot market, the price ended at 27703.5 Rupees, gaining by 0.01 percent. Technically, the market is under long liquidation with a drop in open interest by 0.27% to settle at 369 while prices decreased by 170 rupees. Cottoncandy is getting support at 58000, and a move below this level could test 58000. Resistance is likely to be seen at 58000, and a move above could see prices testing 58000.

Trading Ideas:

* Cottoncandy trading range for the day is 58000-58000.
* Cotton dropped tracking ICE cotton prices on expectations of good weather boosting supplies.
* China's agriculture ministry raised its forecast for cotton imports in the 2023/24 crop year by 200,000 metric tons
* The 2024/25 U.S. cotton projections show higher beginning and ending stocks compared to last month.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.

Turmeric

Turmeric prices settled up by 0.28% at 15494 as farmers held back stocks in anticipation of further price increases. This bullish sentiment among farmers was driven by expectations of reduced availability, despite news of increased sowing. The recent uptick in prices can be attributed to a combination of factors, including low sowing last year and unfavorable weather conditions, which led to an estimated production of 45-50 lakh bags. However, reports suggest a significant increase in turmeric sowing this year across major producing states such as Maharashtra, Telangana, Andhra Pradesh, and Erode. It is estimated that turmeric sowing could increase to around 3.75-4 lakh hectares this year, compared to 3-3.25 lakh hectares last year. This increase in acreage, coupled with favorable weather conditions, is expected to boost production to around 70-75 lakh bags for the upcoming season. Despite the anticipated increase in production, the current season's outstanding stock is expected to remain zero, suggesting that the availability of turmeric will still be less than the consumption needs in 2025. Export data showed a decline in April 2024, with 14,109.09 tonnes of turmeric exported, down 19.07% from March 2024 and 27.98% from April 2023. Conversely, imports surged significantly in April 2024, with 3,588.11 tonnes imported, marking a 192.36% rise from March 2024 and a substantial 570.31% increase from April 2023. Technically, the market is under fresh buying pressure, with a 1.05% increase in open interest to settle at 15420 while prices rose by 44 rupees. Turmeric is currently getting support at 15324, with a potential test of 15154 levels. On the upside, resistance is likely at 15620, with a move above potentially testing 15746.
Trading Ideas:

* Turmeric trading range for the day is 15154-15746.
* Turmeric gains on short covering as farmers are holding back stocks in anticipation of a further rise.
* Turmeric sowing on the Erode line is reported to be double as compared to last year.
* Turmeric was sown in about 3/3.25 lakh hectares in the country last year, which is estimated to increase to 3.75/4 lakh hectares this year.
* In Nizamabad, a major spot market, the price ended at 16494.9 Rupees gained by 0.22 percent.

 Jeera

Jeera prices settled up by 0.74% at 27830, driven by robust domestic and export demand alongside tight global supplies. However, the upside potential is limited due to expectations of higher production this season. Farmers have been holding back stocks in anticipation of better prices, further bolstering the market. Jeera production is projected to increase by 30% this season, reaching 8.5-9 lakh tonnes, thanks to a substantial rise in cultivation area, particularly in Gujarat and Rajasthan. Globally, jeera production has surged, with China's output jumping to over 55-60 thousand tons from the previous 28-30 thousand tons. High prices from the prior season have also incentivized increased production in Syria, Turkey, and Afghanistan. New seeds are expected to enter the market in June and July, potentially leading to a decline in cumin prices. In India, the sowing area in Gujarat increased by 104%, and in Rajasthan by 16%. Favorable weather conditions have led to record production levels, with Gujarat's cumin production estimated at 4.08 lakh tonnes, a new record. Exports are expected to rise significantly, potentially reaching 14-15 thousand tonnes in February 2024, despite a volatile 2023 for cumin exports due to soaring domestic prices. India's average annual cumin export is about 0.2 million tonnes, but 2023 saw a decline to 1,76,011 tonnes. Technically, the market is under short covering, with a 0.7% drop in open interest to settle at 27700, while prices rose by 205 rupees. Jeera is currently supported at 27650, with a potential test of 27460 levels. On the upside, resistance is likely at 28000, with a move above potentially testing 28160.

Trading Ideas:

* Jeera trading range for the day is 27460-28160.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 27985.7 Rupees gained by 0.16 percent.

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