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Gold

Gold prices rose by 0.65% to 68,952, driven by a weakening dollar as investors focused on upcoming U.S. economic data for insights into the Federal Reserve's interest rate decisions. Recent S&P Global flash PMIs highlighted a robust U.S. private sector, buoyed by growth in services, although manufacturing saw unexpected contraction for the first time this year. Investors eagerly await Thursday’s GDP report and Friday’s personal consumption expenditures data for more clarity on the Fed's rate cut timeline, with markets currently predicting a 100% chance of a September rate cut according to the CME FedWatch Tool. Swiss gold exports in June fell to their lowest since April 2022 due to decreased shipments to China and India, the largest consumer markets whose demand fluctuates with high gold prices. Asian gold demand remained sluggish as customers hesitated to buy at record-high prices. Indian dealers offered steep discounts of up to $65 per ounce, the highest in 28 months, as they tried to offload misclassified gold amid potential regulatory changes. Chinese dealers also offered significant discounts of up to $6 an ounce compared to premiums last week. In Singapore and Hong Kong, gold was traded at slight discounts to modest premiums, while Japanese dealers charged small premiums due to increased selling. From a technical perspective, the gold market is experiencing short covering, indicated by a 14.92% drop in open interest, settling at 9,662 as prices increased by 442 rupees. Gold is currently supported at 68,640, with potential further testing at 68,320. Resistance is expected around 69,290, and a move above this level could push prices to test 69,620.

Trading Ideas:

* Gold trading range for the day is 68320-69620.
* Gold prices rose as the dollar slipped with investors' focus shifting to U.S. economic data
* Markets are anticipating a 100% chance of a rate cut by the central bank in September
* S&P Global flash PMIs for the US showed private sector activity remained robust
 
 
Silver

 
Silver prices dipped slightly by 0.03% to 84,894 as the dollar index fell to 104.1, retreating from a two-week high of 104.5. The depreciation came amid traders evaluating fresh PMI data and the monetary policy outlook. S&P Global flash PMIs indicated robust private sector activity in the US, driven by faster growth in services, while manufacturing contracted unexpectedly for the first time this year. The likelihood of a 25 basis point rate cut by the Federal Reserve in September has reached 100%.Additionally, sales of new single-family homes in the US decreased by 0.6% month-over-month to a seasonally adjusted annualized rate of 617,000 in June 2024. This decline, attributed to high prices and mortgage rates, marked the lowest reading in seven months and fell short of the forecasted 640,000. Revised May data showed sales at 621,000. Furthermore, the S&P Global Flash US Manufacturing PMI dropped unexpectedly to 49.5 in July 2024 from 51.6 in June, signaling the year's lowest reading. This decline highlighted deteriorating business conditions in the goods-producing sector due to decreases in new orders, production, and inventories. The US trade deficit in goods also narrowed to $96.84 billion in June 2024 from the previous month's two-year high of $99.37 billion, outperforming market expectations of a $98 billion shortfall. From a technical perspective, the silver market experienced fresh selling, as evidenced by a 1.06% increase in open interest to 27,284 while prices decreased by 25 rupees. Silver currently finds support at 84,455, with potential further testing at 84,020. Resistance is anticipated at 85,530, and a move above this level could see prices testing 86,170.

Trading Ideas:

* Silver trading range for the day is 84020-86170.
* Silver settled flat as traders assess fresh PMIs and the monetary policy outlook.
* The odds for a 25bps rate cut by the Fed are now back to 100%.
*  India slashed import duties on Silver to 6% from 15%.

 
Crude oil  

Crude oil prices rose by 0.98% to 6,521, driven by a significant drawdown in US oil inventories. The US Energy Information Administration (EIA) reported a reduction of 3.741 million barrels for the week ending July 19, 2024, surpassing market expectations of a 2.05 million barrel draw. This marks the fourth consecutive week of declining inventories. Additionally, crude stocks at the Cushing, Oklahoma delivery hub decreased by 1.708 million barrels, following a previous draw of 875 thousand barrels. Gasoline stocks dropped by 5.572 million barrels, against forecasts of a 0.9 million barrel draw, and distillate stockpiles, including diesel and heating oil, fell by 2.753 million barrels, contrary to the expected 0.53 million barrel increase. On the global front, OPEC+ data revealed that Russia's cumulative oil overproduction from January to June 2024 was 480,000 barrels per day (bpd). Russia has pledged to offset most of this excess output next year, with 40,000 bpd to be offset in October-November 2024 and 440,000 bpd in March-September 2025. Iraq, another key OPEC member, reported overproduction volumes of 1.184 million bpd for the first half of the year. Iraq plans to offset this by September 2025. From a technical perspective, the crude oil market experienced short covering, as indicated by a 4.79% drop in open interest, settling at 8,113 while prices increased by 63 rupees. Crude oil is currently supported at 6,464, with potential further testing at 6,408. Resistance is anticipated at 6,566, and a move above this level could see prices testing 6,612.

Trading Ideas:

* Crudeoil trading range for the day is 6408-6612.
* Crude oil rose driven by a larger-than-expected drawdown in US oil inventories.
* Crude oil inventories in the US fell by 3.741 million barrels
* Gasoline stocks dropped by 5.572 million, versus forecast of a 0.9 million draw
 
 
Natural gas

 
Natural gas prices declined by 2.93% to 182.3 due to forecasts predicting lower demand next week than previously expected, rising output, and ongoing oversupply issues. Despite smaller-than-usual injections into storage for nine of the past ten weeks, storage levels remain about 17% higher than average for this time of year. This is because several producers had cut output earlier in the year when futures prices plummeted to three-and-a-half-year lows in February and March. Meteorologists forecast that temperatures across the Lower 48 states will average around 83.2 degrees Fahrenheit (28.4 Celsius) on August 2. Gas output in these states increased to an average of 102.4 billion cubic feet per day (bcfd) in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. The US output hit a record high of 105.5 bcfd in December 2023. Weather projections indicate that temperatures will remain near normal through July 28 before turning hotter than normal through at least August 8. Consequently, LSEG forecasts that average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 105.8 bcfd next week. US utilities added 10 billion cubic feet of gas into storage during the week ending July 12, 2024, below market expectations of a 28 billion cubic feet increase. From a technical perspective, the natural gas market is experiencing fresh selling, as indicated by a 19.66% increase in open interest, settling at 33,140 while prices fell by 5.5 rupees. Natural gas is currently supported at 179.2, with potential further testing at 176.2. Resistance is anticipated at 186, and a move above this level could see prices testing 189.8.

Trading Ideas:

* Naturalgas trading range for the day is 176.2-189.8.
* Natural gas slid on forecasts for less demand next week than previously expected
* Pressure also seen amid rising output and an ongoing oversupply of gas in storage.
* Gas output in the Lower 48 states rose to an average of 102.4 bcfd so far in July
  
 
Copper

 
Copper prices fell by 1.31% to 799.4 due to persistent demand concerns and a lackluster outcome from the Third Plenum, which did not introduce significant policy shifts to address economic challenges. Despite potential support from improved sentiment in India, where the government announced continued infrastructure spending, supply-side factors weighed heavily on the market. Copper inventories in LME warehouses rose to their highest levels since September 2021, and bonded warehouses in China saw inventory levels peak since May 2023. The LME copper stocks increased to 236,700 tons, the highest since September 2021, bolstered by the delivery of 2,350 tons to Asian warehouses near China. The global refined copper market showed a 65,000 metric ton surplus in May, up from an 11,000 metric ton surplus in April, according to the International Copper Study Group (ICSG). For the first five months of the year, the market experienced a 416,000 metric ton surplus, significantly higher than the 154,000 metric ton surplus in the same period last year. World refined copper output in May was 2.37 million metric tons, while consumption was 2.31 million metric tons. China's unwrought copper imports fell to a 14-month low in June, with imports totaling 436,000 metric tons, down 3% from the previous year and the lowest since April 2023. The Yangshan copper premium remained negative in June, indicating weak spot import appetite. From a technical perspective, the copper market experienced fresh selling, indicated by a 32.1% increase in open interest, settling at 12,948 while prices decreased by 10.6 rupees. Copper is currently supported at 794.4, with potential further testing at 789.4. Resistance is expected at 808.5, and a move above this level could see prices testing 817.6.

Trading Ideas:

* Copper trading range for the day is 789.4-817.6.
* Copper dropped as demand concerns in continued to pressure the market.
* Copper inventories in LME warehouses rose to the highest since September 2021
* Copper market in 65,000 metric tons surplus in May 2024 – ICSG
 
  

Zinc

Zinc prices declined by 0.39% to 253.5 amid growing concerns over demand in China. In June, China's refined zinc production reached 545,800 metric tons, up 1.81% month-over-month but down 1.2% year-over-year. The first half of the year saw a total output of 3.182 million metric tons, a 1.39% decrease from the previous year but higher than expected. Domestic zinc alloy production in June was 93,000 metric tons, a decrease of 1,800 metric tons from the previous month. The production exceeded expectations due to higher-than-expected output in regions like Guangxi, Gansu, and Guizhou. China's MMG Ltd halted operations at its Dugald River zinc mine in Australia for approximately two months for repair work, potentially exacerbating the already tight zinc concentrates market. Despite this, MMG expects minimal impact on overall 2024 production. Zinc inventories in London Metal Exchange (LME) warehouses rebounded by 9% to their highest level in nearly three months, indicating a surplus in the market. LME zinc stocks had touched their strongest levels since May 2021 at 276,100 tons in late February but had declined by 13% until Friday. The global zinc market surplus fell to 22,100 metric tons in April from 70,100 tons in March, according to the International Lead and Zinc Study Group. Technically, the zinc market is experiencing fresh selling, as indicated by a 32.87% increase in open interest, settling at 1,714 while prices fell by 1 rupee. Zinc is currently supported at 252.1, with potential further testing at 250.5. Resistance is anticipated at 255.9, and a move above this level could see prices testing 258.1. The combination of increased supply and demand concerns in China continues to pressure zinc prices.

Trading Ideas:

* Zinc trading range for the day is 250.5-258.1.
* Zinc prices dropped on growing concern over demand in China.
* In June, China's refined zinc production was 545,800 mt, up 9,700 mt or 1.81% MoM
* Zinc inventories in warehouses registered with the London Metal Exchange rebounded 9% to their highest level in nearly three months
 
 
 
Aluminium

 
Aluminium prices edged down by 0.21% to 213.3 amid concerns about demand, driven primarily by a lack of new stimulus measures in China. Market participants were closely watching for signs that the Chinese government would implement policies to tackle the country's ongoing property slump, which is a significant driver of industrial metals demand. Global primary aluminium output rose 3.2% year-on-year to 5.94 million tonnes in June, according to data from the International Aluminium Institute (IAI). For the first half of 2024, global output increased by 3.9% to 35.84 million metric tons, largely due to higher production in China. China's aluminium production grew 7% to 21.55 million tons in the first half of the year, with June's production reaching a nearly decade-high. In addition to China, other regions also saw growth in aluminium production. Western and Central Europe experienced a 2.2% increase to 1.37 million tons, while Russia and Eastern Europe saw a 2.4% rise to 2.04 million tons. The Gulf region's output increased by 0.7% to 3.10 million tons. Meanwhile, the premium for aluminium shipments to Japanese buyers for July to September was set at $172 per metric ton, reflecting a 16%-19% rise from the previous quarter due to tighter supplies in Asia. From a technical perspective, the aluminium market is experiencing fresh selling pressure, as evidenced by a 14.99% increase in open interest, settling at 4412 while prices fell by 0.45 rupees. Aluminium is currently supported at 212, with potential further testing at 210.7. Resistance is anticipated at 214.8, and a move above this level could see prices testing 216.3.

Trading Ideas:

* Aluminium trading range for the day is 210.7-216.3.
* Aluminium gains on low level buying after prices dropped amid concerns about demand
* Global primary aluminium output rose by 3.9% year-on-year to 35.84 million metric tons in the first half of 2024
* Global aluminium output rises 3.2% year on year in June – IAI
 
 Cotton candy
 
Cotton candy prices decreased by 2.31% to 56,650 on profit booking following recent gains. The decline in prices is partly attributed to reduced cotton cultivation in key Indian states. Punjab, Haryana, and Rajasthan have collectively reported only 10.23 lakh hectares under cotton this year, a significant drop from last year's 16 lakh hectares. Specifically, Punjab has seen a drastic reduction to 97,000 hectares, a steep decline from the normal 7.58 lakh hectares of the 1980s and 1990s. Rajasthan's cotton area has nearly halved from 8.35 lakh hectares last year to 4.75 lakh hectares this year, while Haryana has reduced its cotton cultivation from 5.75 lakh hectares to 4.50 lakh hectares in 2024. Support for cotton candy prices also comes from delayed shipments from the US and Brazil, boosting demand for Indian cotton from mills in neighboring countries. Additionally, firm cottonseed prices are supporting cotton prices despite the commencement of sowing in southern Indian states like Karnataka, Telangana, and Andhra Pradesh, which have begun receiving monsoon rains. The 2024/25 US cotton projections indicate higher beginning and ending stocks compared to the previous month, with projected production, domestic use, and exports remaining unchanged. Technically, the market is experiencing fresh selling pressure, as evidenced by a 96.97% increase in open interest, settling at 65 while prices dropped by 1,340 rupees. Cotton candy is currently finding support at 56,180, with further testing possible at 55,720 levels. Resistance is expected at 57,520, and a move above this level could see prices testing 58,400.

Trading Ideas:

* Cottoncandy trading range for the day is 55720-58400.
* Cotton dropped on profit booking after prices gained as area under cotton in North India drops
* 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

Yesterday, the price of turmeric rose by 0.38% to settle at 15,998 INR per quintal amid news of increased sowing. Despite this, the downside was limited as farmers are holding back stocks in anticipation of further price increases. With growers receiving fair prices, turmeric sowing is expected to be robust across all producing states this year. In Erode, turmeric sowing has reportedly doubled compared to last year. In Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher than the previous year. Last year, turmeric was sown in about 3-3.25 lakh hectares nationwide, with estimates suggesting an increase to 3.75-4 lakh hectares this year. Unfavorable weather conditions last year resulted in a production estimate of 45-50 lakh bags for 2024, with an outstanding stock of 35-38 lakh bags. Despite increased sowing this season, the upcoming turmeric crop is expected to be around 70-75 lakh bags, with no outstanding stock, leading to a potential shortage relative to consumption in 2025. In 2023, the country produced 80-85 lakh bags of turmeric, with an additional stock of 25-30 lakh bags. Turmeric exports dropped by 20.03% during April-May 2024, totaling 31,523.94 tonnes compared to 39,418.73 tonnes in the same period in 2023. In May 2024, 17,414.84 tonnes of turmeric were exported, up 23.43% from April 2024 but down 12.17% from May 2023. Technically, the turmeric market is experiencing short covering, with a 0.62% drop in open interest to 16,000 contracts. Prices rose by 60 INR, with support at 15,840 and further support at 15,684 levels. Resistance is expected at 16,156, and a move above this level could see prices testing 16,316.

Trading Ideas:

* Turmeric trading range for the day is 15684-16316.
* Turmeric prices settled flat 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 16554.05 Rupees gained by 0.58 percent.
 

Jeera  

Yesterday, Jeera prices settled down by 0.65% at 26,080 INR per quintal, as the expectation of higher production put pressure on prices. However, the downside was limited due to robust domestic and export demand, alongside tight global supplies. Farmers holding back their stocks in anticipation of better prices also supported prices. This season, Jeera production is expected to be 30% higher, reaching 8.5-9 lakh tonnes, due to a substantial increase in cultivation area. In Gujarat, the sowing area increased by 104%, and in Rajasthan by 16%. Globally, Jeera production has seen significant increases, with China leading the surge. China's cumin output soared to over 55-60 thousand tons from the previous 28-30 thousand tons. High prices from the prior season incentivized increased production in Syria, Turkey, and Afghanistan, with new seeds expected in June and July. Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double, weather permitting. As these new supplies enter the market, cumin prices are expected to decline. In Gujarat, the sowing area increased by 30-35% in regions like Mehsana, Banaskantha, and Patan. Similarly, in Rajasthan, areas such as Jaisalmer, Barmer, Jodhpur, and Ajmer saw a 35% increase in sowing area. The total production of cumin in Gujarat is estimated to be a record 4.08 lakh tonnes, up from 2.15 lakh tonnes last year. Technically, the Jeera market is under fresh selling pressure, with a 0.79% increase in open interest to 26,205 contracts. Prices fell by 170 INR, with support at 26,020 and further support at 25,940 levels. Resistance is expected at 26,190, and a move above this level could see prices testing 26,280.

Trading Ideas:

* Jeera trading range for the day is 25940-26280.
* 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 26441.65 Rupees dropped by -0.09 percent.

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