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Gold

Yesterday, gold prices fell by -2.43% to settle at 71,353, pressured by a more hawkish outlook for the Federal Reserve and indications of reduced central bank gold purchases in Asia. The U.S. economy added 272,000 jobs in May, which was nearly 100,000 more than the median market expectations. This robust job growth underlined the resilience of the labor market, increasing expectations that the Fed will delay the start of rate cuts, which negatively impacted gold prices. Gold imports to China via Hong Kong dropped significantly by 38% in April compared to the previous month, totaling 34.6 metric tons as opposed to 55.8 tons in March, according to data from the Hong Kong Census and Statistics Department. This decline marks a departure from the high consumption recorded in the first quarter, where gold consumption rose by 5.94% year-over-year, reaching 308.91 metric tons, according to the China Gold Association. In India, gold prices continued to trade at a discount for the fifth consecutive week. Indian dealers offered discounts of up to $14 per ounce over official domestic prices, compared to the previous week's discount of $9. Similarly, China's central bank paused its 18-month-long gold buying spree in May, a period that saw record highs in benchmark prices. Technically, the gold market is experiencing long liquidation, as indicated by a 4.95% drop in open interest to 16,038 contracts, alongside a price drop of 1,778 rupees. Currently, gold has support at 70,515, with a potential test of 69,670 if it falls below this level. On the upside, resistance is expected at 72,860, and a move above this level could push prices towards 74,360.

Trading Ideas:
* Gold trading range for the day is 69670-74360.
* Gold prices dropped pressured by a hawkish turn in expectations for the Federal Reserve
* The US economy added 272K jobs in May, nearly 100K more than median market expectations.
* China's central bank paused gold purchases in May after 18 months of buying
 
 
 silver
Yesterday, silver prices plunged by -5.04% to settle at 89,089, primarily driven by a strong U.S. payroll report that reignited speculation about the Federal Reserve potentially holding off on multiple interest rate cuts this year. The U.S. economy added 272,000 jobs in May, far exceeding the revised 165,000 in April and the expected 185,000. Pressure on silver prices also came from ongoing assessments of the industrial backdrop for key sectors and the dovish stance of major central banks. The U.S. imposed 50% tariffs on Chinese imports of solar cells, a significant industry for silver, which impacted demand for solar panels across key factories in Asia with corporate bases in China. Despite this, robust demand in the domestic Chinese markets, highlighted by the connection of the world’s largest solar farm in northwestern Xinjiang, helped prevent a further decline in silver prices. In the context of monetary policy, expectations of upcoming interest rate cuts by major central banks helped limit the decline in silver prices. The European Central Bank (ECB) and the Bank of Canada (BoC) have already started their rate cut cycles, with the BoC indicating more cuts are forthcoming. India's silver imports have surged dramatically in the first four months of the year, surpassing the total imports for all of 2023. India imported a record 4,172 metric tons of silver from January to April, compared to just 455 tons during the same period the previous year. Technically, the silver market is experiencing long liquidation, as indicated by a 4.71% drop in open interest to 22,701 contracts, while prices fell by 4,727 rupees. Currently, silver has support at 87,010, with a potential test of 84,925 if it falls below this level. On the upside, resistance is expected at 92,895, and a move above this level could push prices towards 96,695.

Trading Ideas:
* Silver trading range for the day is 84925-96695.
* Silver dropped fueled by a robust payrolls report.
* Pressure also seen as markets continued to assess the industrial backdrop for key sectors and the extent of dovish policy by major central banks.
* The US economy added 272,000 jobs in May, significantly higher than the revised 165,000 in April.
 
 
crude oil
Yesterday, crude oil prices marginally declined by -0.05% to settle at 6,323, influenced by an unexpected announcement from OPEC+ regarding the return of some supply this year. This announcement raised market concerns about potential oversupply amid an already uncertain demand outlook. However, some members of the OPEC+ alliance reassured the market of their commitment to stability, with the Saudi energy minister stating that OPEC+ could pause or reverse production increases if market conditions weaken. However, China's crude oil imports fell by 8.7% year-over-year in May, amounting to 46.97 million metric tons or approximately 11.06 million barrels per day (bpd). This decline was attributed to refiners scaling back purchases amid heavy plant overhauls and subdued profit margins. While this figure was slightly up from April's 10.88 million bpd, it was significantly lower than the 12.11 million bpd recorded in the same period last year. In the United States, crude oil stocks unexpectedly rose by 1.233 million barrels in the week ending May 31, 2024, against market expectations of a 2.30 million barrel decline, according to the EIA Petroleum Status Report. Crude stocks at the Cushing, Oklahoma delivery hub increased by 854,000 barrels, reversing a 1.766 million barrel draw from the previous week. Technically, the crude oil market is under long liquidation, as evidenced by a 12.19% drop in open interest to 8,527 contracts, while prices fell by 3 rupees. Currently, crude oil has support at 6,282, with a potential test of 6,240 if it falls below this level. On the upside, resistance is likely at 6,368, and a move above this level could see prices testing 6,412.

Trading Ideas:
* Crudeoil trading range for the day is 6240-6412.
* Crude oil dropped after an unexpected announcement by OPEC+ to return some supply this year.
*  U.S. jobs data dampens hope for near term rate cut
* China's May crude oil imports fall on weak refining margins

 
Natural gas
Natural gas prices surged by 5.34% to settle at 246.5, driven by a recent drop in daily output and forecasts indicating hotter-than-normal weather for later in June. The rise in prices was also supported by increased gas flows to LNG export facilities, especially with the Freeport LNG plant in Texas resuming operations. However, exports are still below the December 2023 record of 14.7 billion cubic feet per day (bcfd) due to ongoing maintenance at several facilities. Production in the Lower 48 U.S. states has declined to an average of 98.0 bcfd so far in June, down from 98.1 bcfd in May and significantly below the monthly record of 105.5 bcfd set in December 2023. On a daily basis, output is on track to drop by about 2.7 bcfd over the past five days, reaching a preliminary 19-week low of 96.3 bcfd. Meteorologists forecast that weather across the Lower 48 states will remain warmer than normal through June 21, except for some near-normal days between June 7 and 12. LSEG projects gas demand in the Lower 48, including exports, to decrease slightly from 93.7 bcfd this week to 93.1 bcfd next week. In terms of storage, U.S. utilities added 98 billion cubic feet (Bcf) of gas into storage during the week ending May 31, 2024, exceeding market expectations of an 89 Bcf increase. Technically, the natural gas market is under fresh buying pressure, with a 9.45% increase in open interest to settle at 16,464 contracts. Prices rose by 12.5 rupees, indicating strong upward momentum. Natural gas is currently supported at 237.3, with potential testing of 228.1 levels if it falls below this support. On the upside, resistance is expected at 251.8, and a move above this level could see prices testing 257.1.

Trading Ideas:
* Naturalgas trading range for the day is 228.1-257.1.
* Natural gas climbed on a recent drop in daily output and forecasts for hotter weather.
* Additionally, gas flow to LNG export facilities has been on the rise.
* US utilities added 98 billion cubic feet of gas into storage
 
 
 
Copper
Copper yesterday settled down by -3.19% at 853.65as. Copper inventories in warehouses monitored by the Shanghai Futures Exchange have reached a four-year high, following a spike since the beginning of 2024. They climbed 4.7% this week. Unwrought copper imports this month were greater than projected, raising concerns that Chinese stocks will climb further. China's trade figures indicated higher-than-expected exports, indicating that factory owners were able to find consumers overseas. However, imports expanded at a slower rate, underscoring the vulnerability of local demand. Chile, the world's largest copper producer, exported $4.36 billion in May, up 28.1% from the previous year, according to the central bank.The worldwide refined copper market showed a 125,000 metric tonnes surplus in March, compared to a 191,000 metric tonnes surplus in February, according to the International Copper Study Group's (ICSG) most recent monthly report. China's unwrought copper imports in May increased 15.8% from the previous year, according to customs data released on Friday, above market expectations despite poor physical consumption. Imports of unwrought copper and goods in China, the world's largest copper consumer, totaled 514,000 metric tonnes last month, up from 444,010 tonnes the previous year, according to figures from the General Administration of Customs. Imports rose 17.4% from the previous month. Many market participants were surprised by the double-digit gains, given that actual consumption was sluggish last month amid record high copper prices. Technically, the market is under new selling as the market has seen an increase in open interest of 16.31% to end at 6816 while prices are down -28.15 rupees, currently Copper is finding support around 844.2, and a drop below that could see prices test 834.7 levels, while resistance is now expected at 872.1, with a move above that could see prices test 890.5.

Trading Ideas:
* Copper trading range for the day is 834.7-890.5.
* Copper dropped as SHFE inventories are at over four-year high after a surge since the start of 2024.
* Unwrought copper imports last month came in higher than expected
* China May copper imports jump 15.8% on – year, beat expectations
 
 
Zinc
Zinc fell -4.32% yesterday to 250.5 amid signs of low demand in the short future. China's manufacturing PMI fell short of market expectations, indicating a slowdown in manufacturing activity in the world's top metal consumer and reducing further demand. Soft US economic data has bolstered the case for quicker Fed rate cuts, allowing the dollar to recover from its lowest point since mid-March. China's official purchasing managers' index (PMI) dipped to 49.5 in May from 50.4 in April, below the 50-point threshold that separates growth from contraction. According to data from April 2024, China's refined zinc output was 504,600 mt, a decline of 20,900 mt or 3.99% month on month and a decrease of 6.56% year on year. The total output from January to April was 2.1 million mt, a 0.47% decline from the previous year, which was roughly in line with predictions. Domestic zinc alloy output in April totaled 95,500 mt, up 1,100 mt from the previous month. In addition, output decreased somewhat due to equipment maintenance and raw material issues at smelters in Henan, Shaanxi, Yunnan, and Hunan. Chinese officials announced a historic support package, lowering the minimum mortgage interest rate to 15% for first-time purchasers and 25% for second-time buyers. The worldwide zinc market surplus fell to 52,300 metric tonnes in March, down from 66,800 tonnes in February, according to the International Lead and Zinc Study Group (ILZSG). Technically, the market is under fresh selling as open interest has increased by 17.29% to settle at 3677, while prices have fallen by -11.3 rupees. Zinc is now receiving support at 245.5, and a move below could see prices test 240.4 levels, while resistance is now likely to be seen at 259.2, with a move above potentially seeing prices test 267.8. 

Trading Ideas:
* Zinc trading range for the day is 240.4-267.8.
* Zinc prices dropped amid evidence of low demand in the near term.
* China’s manufacturing PMI came in below market expectations, pointing to a contraction in manufacturing activity
* China's refined zinc output was 504,600 mt, a month-on-month decrease of 20,900 mt or 3.99%
 
 
 Aluminium
 
Aluminium fell -2.5% to 235.6 yesterday on a stronger dollar, stronger-than-expected US job statistics, and mixed trade numbers from main metals customer China. The dollar rose as data revealed that the US economy created much more jobs than predicted last month, implying that the Federal Reserve may delay commencing its easing cycle this year. In China, the signs remained mixed. May trade data indicated higher-than-expected exports, indicating that factory owners were finding clients overseas. However, imports expanded at a slower rate, underscoring the vulnerability of local demand. However, alumina shortages, an intermediary product between raw material bauxite and aluminium, have recently occurred as a result of decreasing Chinese supply and disruptions to Rio Tinto's Australian shipments. One global aluminium producer has given Japanese buyers a premium of $175 per metric tonne for July-September, up 18% to 21% on a quarterly basis, indicating confidence in the demand picture. The International Aluminium Institute (IAI) reported that global primary aluminium output increased by 3.3% year on year in April to 5.898 million tonnes. According to customs data, China's April imports of unwrought aluminium and goods increased 72.1% year on year to 380,000 metric tonnes. According to figures from the General Administration of Customs, imports in the first four months totaled 1.49 million tonnes, an increase of 86.6% over the same period last year. Technically, the market is under fresh selling, as open interest increased by 2.02% to settle at 3382, while prices fell -6.05 rupees. Aluminium is now receiving support at 232.9, and a move below could see prices test 230.1 levels, while resistance is now likely to be seen at 240.3, with a move above potentially seeing prices test 244.9.

Trading Ideas:
* Aluminium trading range for the day is 230.1-244.9.
* Aluminium dropped on stronger dollar amid stronger-than-expected U.S. employment data.
* China’s trade data showed better-than-expected exports, suggesting factory owners were managing to find buyers overseas.
* Global primary aluminium output in April rose 3.3% year on year to 5.898 million tonnes
 
 
Cottoncandy
Cottoncandy fell -0.11% yesterday to 56840, as sluggish milling demand remains a concern in the face of weak yarn demand in the worldwide market. However, the downside appears to be limited since demand for Indian cotton remains robust from purchasers in countries such as Bangladesh and Vietnam, among others. There were hopes for a better crop in places like as Australia. The International Cotton Advisory Committee (ICAC) forecasts improvements in cotton-producing area, production, consumption, and trade for the 2024-25 season. Cotton stockpiles in India are predicted to shrink by about 31% in 2023/24, reaching their lowest level in more than three decades, owing to reduced production and growing consumption. Lower stockpiles will constrain exports from the world's second largest producer during the current marketing year, which ends on September 30, supporting global prices. It could also raise domestic pricing and reduce the margins of local textile producers. Cotton stockpiles at the conclusion of the 2023/24 marketing year could fall to 2 million bales (340,000 metric tonnes), according to a statement from the Cotton Association of India (CAI). India is expected to produce 30.97 million bales of cotton this season, down from 31.89 million bales last year, according to the CAI. The country's consumption is predicted to increase to 31.70 million bales, up from 31.10 million bales last year. According to the CAI, India's cotton exports this season might reach 2.20 million bales, up from 1.55 million bales the previous year. Technically, the market is in long liquidation, as open interest has dropped by -0.28% to settle at 362 while prices have fallen by -60 rupees. Cottoncandy is now receiving support at 56660, and a move below could see prices test 56470 levels, while resistance is now likely to be seen at 57120, with a move above potentially seeing prices test 57390.

Trading Ideas:
* Cottoncandy trading range for the day is 56470-57390.
* Cotton dropped as sluggish milling demand is still concerns amid muted demand of yarn
* 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 26834.4 Rupees dropped by -0.13 percent.
 
 
Turmeric
Turmeric prices rose 0.16% yesterday to 17914a, as producers hold back supplies in expectation of additional increases. However, the upside is limited due to an increase in supplies near the end of the harvesting season. The current hot wave in the country might drastically reduce crop productivity, exacerbating the supply shortage and driving up prices. The India Meteorological Department predicts that most portions of India will see more heat wave days than typical in May, making any reprieve from the prevailing scorching weather improbable. Rainfall in southern India in April was 63% lower than typical, totaling 12.6 mm. According to the first advance estimate from the Ministry of Agriculture and Farmers' Welfare, turmeric production in 2023-24 is expected to be 10.74 lakh tonnes, down from 11.30 lakh tonnes the previous year. Turmeric exports during April-March 2024 fell by 4.75 percent to 162,018.50 tonnes, compared to 170,093.84 tonnes exported in April-March 2023. In March 2024, approximately 17,432.83 tonnes of turmeric were exported, compared to 12,922.75 tonnes in February 2024, representing a 34.90% increase. In March 2024, around 17,432.83 tonnes of turmeric were exported, compared to 18,818.95 tonnes in March 2023, representing a 7.37% reduction.Turmeric imports for April-March 2024 fall by 12.71 percent to 14,637.55 tonnes, compared to 16,768.87 tonnes imported in April-March 2023. In Nizamabad, a significant spot market, the price closed at 18096.55 Rupees, up 0.73 percent.Technically, the market is under fresh buying, as open interest has increased by 6.05% to settle at 15685, while prices are up 28 rupees. Turmeric is now receiving support at 17626, and a move below could see prices test 17338 levels, while resistance is now likely to be seen at 18176, with a move above potentially seeing prices test 18438.

Trading Ideas:
* Turmeric trading range for the day is 17338-18438.
* Turmeric prices gained as farmers are holding back stocks in anticipation of a further rise.
*  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 18096.55 Rupees gained by 0.73 percent.
 
 
Jeera
Yesterday, Jeera fell -1.05% to 28180a, as increasing supply expectations weighed on pricing. However, negative risks are expected to be limited due to strong domestic and export demand, as well as constrained global supplies. Farmers holding back their inventories in anticipation of higher prices also boosted prices. This season, jeera production is expected to be 30 percent higher, at 8.5-9 lakh tonnes, due to a significant increase in planting area. Gujarat's sowing area expanded by 104%, while Rajasthan's increased by 16%. Jeera production has increased significantly globally, with China leading the way. China's cumin output increased to around 55-60 thousand tonnes, up from 28-30 thousand tonnes previously. High prices from the previous season have prompted greater production in Syria, Turkey, and Afghanistan, with additional seeds due in June and July. Turkey expects to produce 12–15 thousand tonnes, while Afghanistan's output could quadruple, weather allowing. Cumin prices will fall when fresh supply become available. Furthermore, lower cumin export trade contributes to price declines, showing a shift in global cumin market dynamics. Prices are under pressure at higher levels, as increasing production is expected to weigh on them. This season, jeera production is expected to be 30 percent higher, at 8.5-9 lakh tonnes, due to a significant increase in planting area. Gujarat's sowing area expanded by 104%, while Rajasthan's increased by 16%. In Unjha, a significant spot market, the price closed at 29013.05 rupees, down -0.27 percent.Technically, the market is under fresh selling as open interest increased by 13.23% to settle at 2388, while prices fell by -300 rupees. Jeera is now receiving support at 28030, and a move below could see prices test 27870 levels, while resistance is now likely to be seen at 28400, with a move above potentially seeing prices test 28610.

Trading Ideas:
* Jeera trading range for the day is 27870-28610.
* 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 29013.05 Rupees dropped by -0.27 percent.

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