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Gold 

Gold prices settled down slightly by 0.06% at 73,269 as the US Producer Price Index (PPI) for June came in at 2.6% year-over-year, beating expectations of 2.3%. Despite this higher-than-expected PPI report, other recent data points to cooling inflation in the US. This has solidified expectations of a Federal Reserve interest rate cut in September, bolstered by the annual inflation rate dropping to 3% in June, below market expectations. Consequently, markets are now pricing in a 90% chance of a rate cut in September, up from around 70% earlier this week, with a potential second cut anticipated before the year's end. China's central bank refrained from adding gold to its reserves for the second consecutive month in June, and gold imports to China via Hong Kong fell by 38% in April compared to the previous month. Net imports totaled 34.6 metric tons in April, down from 55.8 tons in March. In Asia, physical gold demand has slouched due to elevated prices, with Indian dealers offering the biggest discounts in nearly 3.5 months to entice consumers. Indian dealers offered discounts of up to $31 an ounce over official domestic prices, compared to last week’s $11 discount. In China, premiums ranged from $8-$19 per ounce over international spot prices this week, down from $11-$24 last week. Technically, the market is under long liquidation as open interest dropped by 4.84% to settle at 12,236 while prices fell by 42 rupees. Gold is currently finding support at 73,030, and a break below this level could see a test of 72,790. On the upside, resistance is likely at 73,400, with a potential move to test 73,530.

Trading Ideas:
* Gold trading range for the day is 72790-73530.
* Gold dropped after US PPI for June comes out at 2.6% year-over-year.
* China's central bank refrained from gold purchases to its reserves for a second consecutive month in June, official data showed.
* Indian dealers offered a discount of up to $31 an ounce over official domestic prices, versus last week’s discount of $11.
 
Silver  
 
Silver prices settled down by 1.15% at 93,109 after a hotter-than-expected producer inflation report challenged hopes for broad-based disinflation following this week’s softer CPI release. Headline producer prices increased by a higher-than-anticipated 0.2% in June from the previous month, with earlier results being revised sharply higher, tracking similar developments in the core gauge. This data contrasted with the unexpected drop in CPI from the previous month, tempering the rally for Treasuries and indicating that inflation may not be cooling as quickly as hoped. Silver prices might push even higher on expectations of a wider supply deficit in 2024, marking the fifth consecutive year of shortfall. In 2023, the supply deficit was 142 million ounces, and this is expected to nearly double to 265 million ounces this year. The industrial demand for silver, driven by green energy, AI, and EVs, now accounts for 64% of global consumption, further tightening the market. India's silver imports have surged in the first four months of 2024, surpassing the total imports for all of 2023. This rise is driven by increased demand from the solar panel industry and investors betting on silver's outperformance relative to gold. India, the world's largest silver consumer, imported a record 4,172 metric tons of silver from January to April, up from 455 tons in the same period a year ago. Technically, the silver market is under long liquidation as open interest dropped by 4.73% to settle at 22,985, with prices down by 1,081 rupees. Silver is currently finding support at 92,120, and a break below this level could see a test of 91,130. On the upside, resistance is likely at 94,055, with a potential move to test 95,000.

Trading Ideas:
* Silver trading range for the day is 91130-95000.
* Silver fell after hotter-than-expected producer inflation data.
* Investors geared up for a key political meeting in China where top officials are expected to tackle reforms and modernization plans.
* Industrial demand for silver, driven by green energy, AI and EVs, now accounts for 64% of global silver consumption.
 
 
Crude oil 

Crude oil prices settled marginally lower by 0.04% at 6890, driven by positive market sentiment stemming from a lower-than-expected US inflation print for June, which bolstered expectations of a Federal Reserve interest rate cut. With traders now pricing in a 90% chance of a rate cut in September, up from 73%, this economic outlook supported oil prices. However, China's crude oil imports in June declined by 11% compared to the previous year, reflecting ongoing challenges in the market. Independent refiners in China continued to limit production due to weak profit margins, contributing to tepid fuel demand. Globally, the International Energy Agency (IEA) projected a slowdown in oil demand growth to just under 1 million barrels per day (bpd) for 2023 and 2024. The IEA's forecast reflects weaker-than-expected Chinese consumption in the second quarter amidst economic challenges, marking the lowest quarterly demand increase in over a year. On the supply side, US crude inventories unexpectedly fell by 3.4 million barrels to 445.1 million barrels in the week ending July 5, according to the EIA. This drawdown exceeded market expectations of a 1.3 million-barrel decrease. Additionally, gasoline stocks declined by 2 million barrels, while distillate stockpiles, including diesel and heating oil, rose by 4.9 million barrels, contrasting with expectations. Technically, the crude oil market saw fresh selling pressure with a notable increase in open interest by 12.42% to settle at 5233 contracts, despite prices declining by 3 rupees. Support levels for crude oil are identified at 6850, with a potential downside target at 6811, while resistance is seen at 6958, with a bullish breakout potentially testing 7027.

Trading Ideas:
* Crudeoil trading range for the day is 6811-7027.
* Crude oil rose driven by positive market sentiment following a lower-than-expected inflation print for the US.
* Additionally, signs of strong summer demand are supporting oil prices.
* China June crude oil imports fall 11% on year, H1 imports down 2.3%
 
 
Natural gas 

Natural gas prices surged by 2.94% yesterday, settling at 196, bolstered by forecasts of warmer-than-usual weather over the coming weeks, which is expected to drive higher air conditioning demand. This weather outlook supported bullish sentiment in the market, as warmer temperatures typically increase electricity generation needs for cooling purposes, thus boosting natural gas consumption. The U.S. Energy Information Administration (EIA) projected a decline in natural gas production for 2024, anticipating output to ease slightly from 103.8 billion cubic feet per day (bcfd) in 2023 to 103.5 bcfd in 2024. Meanwhile, natural gas demand is expected to reach record highs, with the Lower 48 states projected to see average gas demand of 107.1 bcfd this week, before easing to 106.2 bcfd next week, according to LSEG. Inventories of natural gas saw a notable increase, with U.S. utilities adding 65 billion cubic feet into storage during the week ending July 5, 2024, surpassing market expectations. This marked the 13th consecutive week of seasonal storage increases, bringing total stockpiles to 3,199 Bcf. Inventories are currently 283 Bcf higher compared to the same period last year and 504 Bcf above the five-year average, indicating ample supply levels. Technically, the natural gas market experienced short covering, indicated by a significant drop in open interest by 11.47% alongside a price increase of 5.6 rupees. Support levels for natural gas are identified at 190.7, with a potential downside test at 185.4, while resistance is expected at 198.9, with a breakout potentially pushing prices towards 201.8.

Trading Ideas:
* Naturalgas trading range for the day is 185.4-201.8.
* Natural gas rose helped by forecasts for warmer than usual weather over the next two weeks.
* Natural gas production is expected to decline in 2024, while demand is expected to reach a record high.
* EIA predicts dry gas production to ease from 103.8 billion cubic feet per day in 2023 to 103.5 billion in 2024.
 
 
 
Copper 

Copper prices rose by 1.43% yesterday, settling at 868.25, buoyed by a weaker dollar and indications that the surge in exchange stockpiles may be abating, despite tempered demand prospects in China. The support from a weaker dollar was complemented by U.S. producer prices rising moderately in June, reinforcing expectations for a potential interest rate cut by the Federal Reserve in September. Inventory dynamics played a crucial role in market sentiment. Copper inventories in LME-registered warehouses remained elevated, hovering near their highest levels in over 2-1/2 years. However, there was a notable decline in on-warrant stocks, which dropped to 190,500 tons following a significant amount marked for delivery out. On the global front, the International Copper Study Group (ICSG) reported a surplus of 13,000 metric tons in the refined copper market for April, down from 123,000 metric tons surplus in March. Despite the surplus, the market showed improvement year-on-year, with a surplus of 299,000 metric tons for the first four months of the year, compared to 175,000 metric tons surplus in the same period last year. Concerns over demand persisted, particularly from China, where unwrought copper imports dropped to a 14-month low in June due to high global prices and subdued domestic demand. The Yangshan copper premium, an indicator of China's spot import appetite, remained negative throughout June, reflecting weak import sentiment despite a modest increase in imports for the first half of the year. Technically, the copper market saw short covering as open interest declined by 11.69% alongside a price increase of 12.25 rupees. Support levels for copper are identified at 855.7, with potential downside testing at 843.2, while resistance is expected at 875.1, with a breakout potentially pushing prices towards 882.

Trading Ideas:
* Copper trading range for the day is 843.2-882.
* Copper prices rose amid weak dollar and hopes that the growth stockpiles could be coming to an end
* U.S. producer prices rose moderately in June, strengthening the case for a September interest rate cut.
* China June unwrought copper imports slide to 14 – month low
 
Zinc 
 
Zinc prices edged up by 0.11% yesterday, settling at 273.3, driven by optimism surrounding potential demand boosts from China ahead of the Communist Party's third plenum, scheduled from July 15-18. In May 2024, China's refined zinc output increased by 6.26% month-on-month to 536,200 metric tons, indicating robust production despite ongoing market dynamics. However, concerns over supply disruptions emerged as MMG Ltd announced a temporary halt at its Dugald River zinc mine in Australia for maintenance. This decision, amidst an already tight zinc concentrates market, is likely to tighten supply further, potentially supporting prices in the near term. Investors are closely monitoring Beijing's stimulus measures, especially in the property market, to gauge their impact on zinc demand. While these measures could bolster construction activity, they also raise concerns about exacerbating housing oversupply issues, potentially influencing zinc market dynamics. On the inventory front, zinc stocks in the Shanghai Bonded Zone increased, reflecting waiting imports and market conditions. Similarly, London Metal Exchange (LME) registered warehouse inventories rebounded by 9%, reaching their highest level in nearly three months, signaling surplus metal availability despite recent declines. According to the International Lead and Zinc Study Group (ILZSG), the global zinc market showed a surplus of 22,100 metric tons in April, down from 70,100 tons in March. Technically, zinc market conditions witnessed short covering as open interest dropped by 3.57%, coupled with a slight price increase of 0.3 rupees. Key support levels for zinc are identified at 271.3, with potential downside testing at 269.1, while resistance is expected at 274.6, with a breakout potentially pushing prices towards 275.7.
 

Trading Ideas:
* Zinc trading range for the day is 269.1-275.7.
* Zinc prices gains amid fuelling optimism over demand in China.
* China's refined zinc output in May 2024 up 6.26% MoM.
* 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.
 
 
 
 Aluminium
Aluminium prices closed slightly higher by 0.26% yesterday, settling at 229.05, driven by expectations of government support amidst soft economic data from key manufacturing economies. However, gains were tempered by concerns over disappointing economic indicators from China, the world's largest consumer of aluminium, which weighed on market sentiment. China's production of primary aluminium surged, nearing last year's record highs, with a 5% year-on-year increase to 3.65 million metric tons in May. This uptick is part of a broader trend where previously idled capacity in Yunnan province has been brought back online. Despite this robust production growth, there have been challenges in matching alumina supply with the increased demand from smelter restarts in the region. Alumina output lagged behind aluminium production, rising by only 3.4% in the first five months of the year. In response to economic challenges, China's central bank reaffirmed its commitment to supportive monetary policies aimed at ensuring economic stability. This stance comes amid mixed economic signals, including a 7.2% year-on-year increase in China's aluminium production and a notable 61.1% surge in aluminium imports in May, driven largely by increased shipments from Russia amidst geopolitical tensions and Western sanctions. Globally, primary aluminium output rose by 3.4% year-on-year to 6.1 million tons in May, highlighting robust production levels despite varied economic conditions across different regions. Technically, the aluminium market experienced short covering, as indicated by a decrease in open interest by -1.92% alongside a modest price increase of 0.6 rupees. Key support levels for aluminium are identified at 227.9, with potential downside testing at 226.6, while resistance is expected at 230.1, with a breakout potentially pushing prices towards 231.

Trading Ideas:
* Aluminium trading range for the day is 226.6-231.
* Aluminium steadied as soft economic data for key manufacturing economies raised expectations of government support.  
* 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.
 
 Cotton
 
Cotton prices for Cottoncandy remained unchanged at 57980 yesterday, influenced by expectations of favorable weather bolstering supplies from key growing regions. Despite this, downside potential was limited due to delays in shipments from major producers like the US and Brazil, which spurred demand for Indian cotton from mills in neighboring countries. The firm trend in cottonseed prices also lent support to natural fiber prices. In India, the start of monsoon rains in southern states like Karnataka, Telangana, and Andhra Pradesh has initiated sowing for the kharif 2024 season, although cotton acreage in North India is expected to decline due to factors such as increased pest infestations and rising labor costs. This shift in agricultural dynamics reflects changing economic considerations for farmers, especially those transitioning from other crops like chillies to cotton. Internationally, the US cotton projections for the 2024/25 season indicate higher beginning and ending stocks compared to previous forecasts, with stable production, domestic use, and exports. However, the season average upland farm price has decreased slightly to 70 cents per pound following declines in new-crop cotton futures. Similarly, global balance sheets show increased beginning stocks, production, and consumption, leading to higher world ending stocks at 83.5 million bales for 2024/25. Technical analysis suggests that the cotton market is currently experiencing long liquidation, with open interest unchanged at 369 while prices remained steady. Key support levels for Cottoncandy are identified at 38660, with potential downside testing at 19330, whereas resistance is expected at 38660, with a potential breakout targeting lower levels.

Trading Ideas:
* Cottoncandy trading range for the day is 19330-19330.
* 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 lower by -1.15% yesterday at 15926, driven by news of increased sowing activities across major producing states in India. Despite the uptick in sowing, upside potential remained limited as farmers opted to hold back stocks in anticipation of higher prices in the future. This cautious approach reflects their expectation of fair pricing for their produce, which is likely to ensure comprehensive turmeric cultivation across all producing states this year. Reports indicate a significant increase in turmeric sowing along the Erode line and notable rises in Maharashtra, Telangana, and Andhra Pradesh compared to last year. Sowing is estimated to expand from 3-3.25 lakh hectares last year to 3.75-4 lakh hectares this year, underscoring optimistic planting intentions amidst favorable weather conditions. In terms of production, the 2024 forecast suggests an output of 45-50 lakh bags, boosted by improved sowing conditions compared to the previous year's challenges. Moreover, with outstanding stocks from previous seasons nearly depleted, total availability is expected to be around 70-75 lakh bags, potentially falling short of consumption demands in 2025. Export and import data reflect fluctuating market dynamics, with April 2024 seeing a decline in exports compared to March 2024 and a significant drop from April 2023 levels. Conversely, imports surged sharply in April 2024 compared to previous months and the same period last year, indicating shifting trade patterns and demand-supply balances. Technically, the turmeric market experienced fresh selling pressure as reflected in a 3.61% increase in open interest, coupled with a price decline of -186 rupees. Key support levels are identified at 15774, with potential downside testing at 15622, while resistance is noted at 16074, with potential upward movement testing 16222.

Trading Ideas:
* Turmeric trading range for the day is 15622-16222.
* Turmeric prices dropped amid news of increased sowing.
* 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 16551.7 Rupees dropped by -0.81 percent.
 
 Jeera
Jeera prices experienced a decline of -2.8% yesterday, settling at 26915, primarily driven by expectations of higher production in the upcoming season. Despite this bearish outlook, downside movement was limited due to robust domestic and export demand coupled with tight global supplies. The forecast for the current jeera production season suggests a substantial increase of 30% compared to previous years, with production estimated between 8.5-9 lakh tonnes. This surge is attributed to a significant expansion in cultivation areas, particularly in Gujarat and Rajasthan, where sowing areas have seen substantial increases of 104% and 16% respectively. This expansion in production areas reflects favorable weather conditions and incentives from high prices observed in previous seasons. Globally, the cumin market has seen production spikes, notably in China where output has more than doubled. Similarly, Syria, Turkey, and Afghanistan are ramping up production, expecting substantial yields in the upcoming months. These global dynamics, coupled with increased production in India, are expected to exert downward pressure on jeera prices as new supplies enter the market. On the export front, April 2024 showed a significant increase in jeera exports compared to the same period last year, highlighting strong international demand despite domestic price fluctuations. However, international prices have seen a decline, influencing market sentiment. Technically, the jeera market witnessed long liquidation as indicated by a -2.01% decrease in open interest alongside a price decline of -775 rupees. Current support levels are identified at 26610, with potential further downside testing at 26300. Resistance is noted at 27450, with a breakout above potentially pushing prices towards 27980.
 

Trading Ideas:
* Jeera trading range for the day is 26300-27980.
* Jeera dropped as the expectation of higher production weighed 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 27730.15 Rupees dropped by -0.76 percent.

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