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Gold

Gold prices settled up by 0.09% at 72,398 as markets continued to assess the timing and extent of rate cuts expected by the Federal Reserve in upcoming quarters. Recent data indicated a softening labor market in the US, with the unemployment rate reaching a two-and-a-half-year high and wage growth falling to a three-year low, suggesting possible early interest rate cuts by the US central bank. Fed Chair Jerome Powell emphasized that the Fed does not expect to reduce interest rates until it is confident that inflation is moving sustainably toward 2%. Although recent inflation readings showed modest progress, more good data would strengthen the case for a rate cut. Currently, markets are pricing in a 77% probability of the Fed reducing interest rates in September, with another cut expected in December. Geopolitical developments in the Middle East are also being monitored, with prospects of a ceasefire deal between Israel and Hamas. In China, the People's Bank of China did not increase its gold reserves for the second consecutive month, holding at 2,264 tonnes. Meanwhile, the National Bank of Poland increased its gold reserves by 4 tonnes in June, marking the third consecutive month of buying. Technically, the market is under short covering as it witnessed a drop in open interest by 3.57% to settle at 12,577 contracts, while prices rose by 65 rupees. Gold is getting support at 72,125, and a move below this level could see a test of 71,855. Resistance is likely to be seen at 72,650, and a move above could see prices testing 72,905.
 

Trading Ideas:
* Gold trading range for the day is 71855-72905.
*  Gold steadied as markets continued to assess the timing and extent of Fed’s rate cuts expected
* Chair Powell reinforces cautious on rate cuts
* China halts gold purchases for the second month, while other central banks boost reserves
 
 
 Silver
Silver prices settled up by 0.38% at 92,969, supported by expectations for rate reductions from the US Federal Reserve following soft economic data. The latest economic indicators showed that year-ahead consumer inflation expectations fell for the second consecutive month to 3% in June from 3.2% in May. This data suggests that inflationary pressures are easing, which could justify the Fed considering rate cuts. Additionally, rising unemployment, contracting services activity, and weak private employment data further reinforced the expectation of an economic slowdown, prompting market speculation on rate cuts. Currently, markets see around a 76% chance of a Fed rate cut in September, with a second reduction anticipated in December. Despite these expectations, the upside in silver prices was limited as the dollar index remained just above 105. Fed Chair Jerome Powell reiterated caution on rate cuts during his testimony before Congress, stating that the central bank does not expect it will be appropriate to reduce interest rates until there is greater confidence that inflation is moving sustainably towards the 2% target. This cautious stance from the Fed has kept the dollar strong, capping silver's gains. Technically, the silver market is under short covering, with open interest decreasing by 0.25% to settle at 23,351 contracts while prices increased by 355 rupees. Silver is currently getting support at 92,330, with a potential test of 91,685 if it falls below this level. On the upside, resistance is likely to be seen at 93,655, and a move above this level could see prices testing 94,335.
 

Trading Ideas:
* Silver trading range for the day is 91685-94335.
* Silver gains as soft US economic data reinforced expectations for rate reductions from Fed.
* Fed Governor Michelle Bowman warns of elevated inflation, indicating no appropriate rate cuts.`
* The Fed has a more cautious approach to rate cuts, requiring more confidence in the inflation outlook.
 
 
 Crudeoil
Crude oil prices settled down by 0.7% at 6,830, primarily due to Hurricane Beryl causing less damage than anticipated to key U.S. oil-producing hubs in Texas. The hurricane, which weakened into a tropical storm after hitting the Texas coast, had minimal impact on major refineries along the U.S. Gulf Coast. This reduction in potential supply disruption eased market concerns. Further dampening crude oil prices were concerns over energy demand in China. New data indicated that the number of oil supertankers headed for China dropped to its lowest level in two years, signaling weaker demand from the world's largest crude importer. Despite these pressures, some supportive data emerged from the U.S. The number of operating oil rigs remained unchanged at 479, holding at its lowest level since December 2021, according to Baker Hughes. U.S. crude stocks fell significantly by 12.2 million barrels to 448.5 million barrels in the week ending June 28, compared with expectations for a 680,000-barrel draw. Gasoline and distillate inventories also fell, with gasoline stocks down by 2.2 million barrels to 231.7 million barrels and distillate stockpiles down by 1.5 million barrels to 119.7 million barrels. Technically, the market is under fresh selling pressure as indicated by a 1.14% gain in open interest to settle at 5,160, while prices dropped by 48 rupees. Crude oil is currently getting support at 6,786, with a potential test of 6,743 if it falls below this level. On the upside, resistance is likely to be seen at 6,879, and a move above this level could see prices testing 6,929.
 

Trading Ideas:
* Crudeoil trading range for the day is 6743-6929.
* Crude oil slips as concerns over hurricane damage ease
* A fresh wave of pessimism over energy demand in China also pressured crude oil.
* The number of operating oil rigs in the U.S. were unchanged at 479 last weeks, holding at its lowest since December 2021
 
 
 Naturalgas
Natural gas prices increased by 0.66% to 199.1 due to forecasts predicting that the intense heat wave covering much of the U.S. will persist through at least late July. This extended heat wave is expected to increase the demand for electricity as air conditioners work overtime, compelling power generators to burn more natural gas. Despite this price increase, forecasts suggest less demand for natural gas next week compared to previous expectations. Adding to the complex market dynamics are recent increases in natural gas output and a decrease in the gas flow to liquefied natural gas (LNG) export plants, primarily because Freeport LNG in Texas shut down ahead of Hurricane Beryl. LSEG reported that gas production in the Lower 48 U.S. states has risen to an average of 102.4 billion cubic feet per day (bcfd) in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. The higher prices observed in April, May, and June have encouraged some producers, including EQT and Chesapeake Energy, to increase their gas extraction efforts. On a daily basis, production peaked at a 17-week high of 103.0 bcfd on Sunday. Technically, the market is under fresh buying pressure, as indicated by a 0.85% increase in open interest, bringing the total to 33,248 contracts. Prices rose by 1.3 rupees. Natural gas is currently finding support at 194.7, and a move below this level could see prices testing 190.2. On the upside, resistance is expected at 204.2, with a potential move above this level pushing prices to test 209.2.
 

Trading Ideas:
* Naturalgas trading range for the day is 190.2-209.2.
* Natural gas prices increased due to forecasts of a heatwave in the US through late July.
* This increase was despite recent output increases, and a drop in gas flowing to LNG export plants.
* Gas output in Lower 48 US states rose to an average of 102.4 billion cubic feet per day in July
 
 
 Copper
Copper prices dipped by 0.1% to 868.9, reflecting persistent weak demand signals from top metals consumer China. Despite the drop, the downside was limited due to a bullish short-term outlook driven by supply concerns and signs of improving physical demand from China. Recent data indicated a shift in the import copper discount to a premium of $3 a ton, pointing to growing physical consumption, especially from the renewable energy sector. China's forthcoming Third Plenum, where new stimulus measures are expected to be introduced to achieve a 5% growth target, also supports the market sentiment. Meanwhile, softening US economic data has bolstered bets for Federal Reserve interest rate cuts, enhancing the outlook for commodity prices. The global refined copper market recorded a surplus of 13,000 metric tons in April, a decrease from the 123,000 metric tons surplus in March, according to the International Copper Study Group (ICSG). For the first four months of the year, the market had a surplus of 299,000 metric tons, compared to a surplus of 175,000 metric tons in the same period a year earlier. China's unwrought copper imports in May rose by 15.8% year-on-year to 514,000 metric tons, exceeding market expectations despite weak physical consumption. This marked a 17.4% increase from the previous month. Technically, the copper market is under fresh selling pressure as indicated by a 2.43% increase in open interest, settling at 6945 contracts. Prices saw a minor decline of 0.9 rupees. Copper is currently finding support at 863.6, with a potential test of 858.1 if prices fall below this level. On the upside, resistance is expected at 875.4, with a move above this level possibly pushing prices to test 881.7.
 

Trading Ideas:
* Copper trading range for the day is 858.1-881.7.
* Copper prices dropped amid persisting weak demand signals from China.
* China imported 1.61 million tons of refined copper in the first five months of the year
* Chinese smelters, have been exporting copper to LME, driving stocks up above 190,000 metric tons for the first time since October.
 
 
 Zinc
Zinc prices saw a slight increase of 0.06%, closing at 271.7, driven by expectations of stronger demand from China, which triggered short-covering. This optimism is fueled by the upcoming Communist Party's Third Plenum, scheduled for July 15-18, where economic policies and reforms are expected to be discussed. The zinc inventory in the Shanghai Bonded Zone increased by 1,500 metric tons to 15,000 metric tons, indicating potential supply waiting for favorable import conditions. China's MMG Ltd recently announced a halt in operations at a mill at its Dugald River zinc mine in Australia for about two months due to repair work, which is anticipated to exacerbate the already tight zinc concentrates market. Despite this stoppage, MMG expects minimal impact on its overall 2024 production. Investors are also speculating on the potential impact of incoming stimulus measures from Beijing on zinc demand. Meanwhile, zinc inventories in London Metal Exchange (LME) warehouses increased by 9% to their highest level in nearly three months, signaling a surplus of metal in the market. This rebound in LME zinc stocks comes after a decline of 13% since February, when stocks had reached their strongest levels since May 2021 at 276,100 tons. Technically, the zinc market is under fresh buying pressure as open interest increased by 3.17%, settling at 2767 contracts. Prices saw a modest rise of 0.15 rupees. Currently, zinc finds support at 270.5, with a potential test of 269.1 if prices fall below this level. On the upside, resistance is likely at 273.5, and a move above this level could see prices testing 275.1.
 

Trading Ideas:
* Zinc trading range for the day is 269.1-275.1.
* 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 dropped by 0.99%, settling at 230.35, as China's production of primary aluminium nears last year's record highs due to the ramp-up of previously idled capacity in Yunnan province. In May, China's aluminium output increased by 5% year-on-year to 3.65 million metric tons, according to the International Aluminium Institute. The country's annualized production is approaching 43.0 million tons, close to the record highs observed in September and October of the previous year. China's central bank reaffirmed its commitment to maintaining a supportive monetary policy stance to ensure economic stability. Globally, primary aluminium output rose by 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. China's aluminium production in May was up by 7.2% from a year earlier, reaching 3.65 million tons. For the first five months of the year, production totaled 17.89 million tons, an increase of 7.1% compared to the same period last year. China's aluminium imports surged by 61.1% in May compared to the previous year, driven largely by increased shipments from Russia. This rise is attributed to Western sanctions on Russian metals, which led Russia to increase its exports to China. From January to April, China imported 500,741 tons of primary aluminium from Russia, a significant increase of 91.6% compared to the same period last year. Technically, the aluminium market is experiencing long liquidation, with open interest decreasing by 3.23% to settle at 3741 contracts. Prices dropped by 2.3 rupees, with support now at 228.9 and potential further downside to 227.2 levels. On the upside, resistance is expected at 233, with a move above this level potentially testing 235.4.
 

Trading Ideas:
* Aluminium trading range for the day is 227.2-235.4.
* Aluminium dropped as China's production is closing record highs as idled capacity ramps up in Yunnan.
* 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 0.12% at 58170, influenced by expectations of favorable weather boosting supplies from key growing regions. However, the downside was limited due to a delay in shipments from the US and Brazil, which triggered demand for Indian cotton from mills in neighboring countries. Additionally, firm cottonseed prices are supporting cotton prices even as sowing for the Kharif 2024 season has begun in southern states like Karnataka, Telangana, and Andhra Pradesh following the onset of monsoon rains. In Telangana, cotton acreage is expected to rise as some chili farmers may switch to cotton due to weak chili prices. Conversely, in North India, cotton acreage might drop by about 25% due to increased pest infestations in recent years and rising labor costs. The 2024/25 US cotton projections indicate higher beginning and ending stocks compared to last month, with production, domestic use, and exports unchanged. The season average upland farm price is down 4 cents from the May forecast to 70 cents per pound, influenced by 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. Globally, the 2024/25 cotton balance sheet shows increased beginning stocks, production, and consumption, with world trade unchanged. World ending stocks are projected to be 480,000 bales higher than in May at 83.5 million. Production forecasts are up by 90,000 bales due to higher area and yield in Burma. In the Rajkot spot market, cotton prices ended at 27661.6 rupees, down by 0.15%. Technically, the market is under long liquidation with a 0.27% drop in open interest to settle at 370, and prices down by 70 rupees. Cottoncandy now has support at 57990, with a potential test of 57810 levels, and resistance at 58370, with a move above potentially testing 58570.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57810-58570.
* 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 rose by 1.34% to 15450 as farmers held back stocks in anticipation of further price increases. This rise was moderated by news of increased sowing activities. With growers receiving fair prices, turmeric cultivation is expected to be robust across all producing states this year. Sowing in the Erode region has reportedly doubled compared to last year, and in Maharashtra, Telangana, and Andhra Pradesh, an estimated 30-35% increase in sowing is projected. Last year, turmeric was sown in approximately 3-3.25 lakh hectares across the country. This year, the sowing area is estimated to increase to 3.75-4 lakh hectares. Additionally, the previous year experienced unfavorable weather conditions, leading to a lower production estimate of 45-50 lakh bags of turmeric for 2024. Despite this, there was an outstanding stock of 35-38 lakh bags. Sources indicate that even with increased sowing this season, the upcoming crop will be around 70-75 lakh bags, with no outstanding stock left. Export data indicates that in April 2024, around 14,109.09 tonnes of turmeric were exported, a decrease from 17,432.83 tonnes in March 2024, marking a 19.07% drop. Compared to April 2023, when 19,590.87 tonnes were exported, there was a significant decline of 27.98%. In the major spot market of Nizamabad, prices ended at 16700.8 Rupees, a drop of 3.15%. Technically, the market is experiencing short covering, with a 3.23% drop in open interest to settle at 15260 contracts, while prices rose by 204 rupees. Currently, turmeric is receiving support at 15180, with a potential test of 14908 levels below this. Resistance is likely to be seen at 15644, with prices potentially testing 15836 above this level.
 

Trading Ideas:
* Turmeric trading range for the day is 14908-15836.
* 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 16458.25 Rupees dropped by -1.45 percent.
 
 
 Jeera
Jeera prices dropped by 0.93% to settle at 27625, largely due to expectations of higher production weighing on the prices. Despite this, prices found some support as farmers held back stocks in anticipation of better future prices. Robust domestic and export demand, along with tight global supplies, also provided a floor to prices. This season, jeera production is expected to be 30% higher, reaching 8.5-9 lakh tonnes due to a significant increase in the cultivation area. In Gujarat, the sowing area increased by 104%, while in Rajasthan it rose by 16%. Globally, jeera production has surged, particularly in China, where output soared to 55-60 thousand tons from the previous 28-30 thousand tons. High prices last season incentivized increased production in Syria, Turkey, and Afghanistan. Turkey expects to produce 12-15 thousand tons, and Afghanistan's output could double, weather permitting. Despite the pressure from higher expected production, domestic and international demand remains strong. In Unjha, a major spot market, prices ended at 28131 Rupees, a drop of 1.7%. The expectation of a substantial rise in exports, driven by increased production and favorable weather conditions, provides a bullish outlook for jeera prices. In April 2024, 38,026.96 tonnes of jeera were exported, an increase of 18.37% from March 2024 and a significant rise of 133.55% from April 2023. Technically, the market is under long liquidation, with a 1.12% drop in open interest, settling at 27895 contracts. Jeera prices are currently supported at 27450, with a potential test of 27280 levels below. Resistance is likely to be seen at 27840, and a move above this level could see prices testing 28060.
 

Trading Ideas:
*  Jeera trading range for the day is 27280-28060.
*  Jeera dropped as the expectation of higher production could weigh on the prices.
* 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 27923.55 Rupees dropped by -0.35 percent.

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