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Gold

Gold prices experienced a notable decline yesterday, shedding 2.21% to settle at 71197, primarily driven by a resurgence in investor risk appetite amid easing concerns over a broader conflict in the Middle East. The diminishing worries regarding escalating tensions between Iran and Israel, averting an all-out war scenario, curbed the safe-haven appeal of bullion, thereby pressuring prices downward. Additionally, remarks from Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Fed Chair Powell, underscored the persistence of inflationary pressures, signaling a prolonged period of high interest rates to rein in price growth. Swiss gold export data for March revealed a decline from the previous month, attributed to reduced deliveries to key markets like India and Turkey, despite increased shipments to China and Hong Kong. The drop in exports to India coincided with a slowdown in local demand following the peak wedding season stocking witnessed in February. Meanwhile, in China, where the central bank exercises control over gold imports, premiums for physical gold surged in April amid support from a weaker yuan, indicating robust local demand. Technically, the market witnessed a phase of long liquidation, evidenced by a 6.52% drop in open interest to settle at 19742 contracts, accompanied by a decline of 1609 rupees in prices. Looking ahead, gold is anticipated to find support at 70805 levels, with further downside potentially testing the 70415 mark. On the upside, resistance is expected around 71940, with a potential breach signaling a move towards the 72685 levels.

Trading Ideas:
* Gold trading range for the day is 70415-72685.
* Gold retreated amid easing fears of a wider Middle East conflict
* Worries of ongoing tensions between Iran and Israel becoming an all-out war fading a little bit has stopped safe-haven demand.
* Progress on bringing down inflation has "stalled" this year, Federal Reserve of Chicago President Austan Goolsbee said.

Silver

Silver faced a significant decline yesterday, dropping by 3.51% to settle at 80579, as global risk aversion subsided. This decrease was compounded by remarks from several Federal Reserve officials regarding the prospect of prolonged restrictive monetary policy, along with robust US economic data. Fed Chair Powell's comments highlighted the central bank's cautious approach, indicating that recent inflation data may necessitate an extended period before considering interest rate adjustments. The choice of words by Fed policymakers, emphasizing the potential continuation of "restrictive" rather than "higher" policy rates, underscores the careful balance in monetary policy communication. Moreover, the Silver Institute industry association forecasted a substantial increase of 17% in the global silver deficit to 215.3 million troy ounces in 2024. This projection is driven by a 2% growth in demand, primarily fueled by robust industrial consumption, coupled with a 1% decline in total supply. Despite a 30% reduction in the deficit from the previous year, the absolute deficit remains considerable at 184.3 million ounces. The report highlighted the stability of global supply around the 1-billion-ounce mark, with industrial demand exhibiting remarkable growth of 11%. Additionally, the decrease in stocks held in commodity exchange depositories and London vaults by 5% in the previous year, equivalent to nearly 15 months of global supply as of end-2023, further emphasizes the tightening supply-demand dynamics in the silver market. From a technical standpoint, the silver market witnessed a phase of long liquidation, evidenced by a notable 21.34% drop in open interest to settle at 18735 contracts, accompanied by a decrease of 2928 rupees in prices. Silver is anticipated to find support at 79840 levels, with further downside potentially testing the 79095 mark. Conversely, resistance is likely around 81915, with a break above indicating a potential move towards the 83245 levels.

Trading Ideas:
* Silver trading range for the day is 79095-83245.
* Silver dropped as global risk aversion receded.
* Recent inflation data indicate the central bank may need more time to feel comfortable lowering interest rates, Fed Chair Powell said.
* The global silver deficit is expected to rise by 17% to 215.3 million troy ounces in 2024 due to a 2% growth in demand

Crude oil

Crude oil prices faced a modest decline yesterday, dipping by 0.91% to settle at 6834, as geopolitical tensions in the Middle East eased following Iran's subdued response to Israel's recent strikes. Despite this, market vigilance persisted due to Iran's significant role as the third-largest producer within OPEC, with its oil exports mainly directed towards China and other nations outside the US financial system. Additionally, the passing of a US Congressional aid package for Ukraine and Israel, which includes provisions for potential sanctions against Iran and its oil production, added a layer of uncertainty to the market outlook. On the demand side, apprehensions stemming from global economic uncertainties and expectations of prolonged higher interest rates by the US Federal Reserve weighed on the crude oil market sentiment. This sentiment was further reflected in the actions of money managers, who trimmed their net long positions in US crude futures and options during the week to April 16, according to data from the US Commodity Futures Trading Commission (CFTC). The reduction in speculative positions indicates a cautious stance among investors amidst prevailing market uncertainties. Furthermore, US weekly imports of Mexican crude oil plummeted to the lowest on record for the second consecutive week, dropping to 208,000 barrels per day in the week ended April 12. From a technical perspective, the crude oil market observed fresh selling pressure, with open interest witnessing a notable 12.74% increase to settle at 4610 contracts, alongside a decline of 63 rupees in prices. Looking ahead, crude oil is expected to find support at 6761 levels, with further downside potentially testing the 6688 mark. Conversely, resistance is likely around 6890, with a breakthrough signaling a potential move towards the 6946 levels.

Trading Ideas:
* Crudeoil trading range for the day is 6688-6946.
* Crude oil dropped as geopolitical concerns in the Middle East eased.
* Global economic uncertainties and fears that the Fed will keep interest rates higher for longer weighed on the outlook.
* Money managers cut their net long U.S. crude futures and options positions

Natural gas

Natural gas prices saw a modest uptick yesterday, rising by 1.16% to settle at 148.5, driven by forecasts of cooler weather and increased demand expected for the following week. Despite negative spot power and gas prices in certain regions and a significant oversupply of gas in storage, the market responded positively to expectations of heightened demand and declining output. Gas flows to liquefied natural gas (LNG) export plants, such as Freeport LNG, contributed to the upward pressure on prices. Energy firms, including EQT and Chesapeake Energy, scaled back drilling activities and delayed well completions in response to the slump in prices witnessed in February and March. According to financial firm LSEG, gas output in the Lower 48 U.S. states dropped to an average of 98.2 billion cubic feet per day (bcfd) so far in April, down from 100.8 bcfd in March and significantly lower than the monthly record of 105.6 bcfd recorded in December 2023. On a daily basis, output was projected to decline by approximately 2.7 bcfd over the past week to a preliminary three-month low of 95.9 bcfd by Friday. Looking ahead, meteorologists forecasted colder-than-normal weather across the Lower 48 states through April 26, followed by a shift to warmer-than-normal conditions from April 27 to May 4. From a technical standpoint, the natural gas market observed short covering, with a notable 23.48% drop in open interest to settle at 33199 contracts, accompanied by a price increase of 1.7 rupees. Support for natural gas is expected at 145.1 levels, with potential downside targeting the 141.7 mark. Conversely, resistance is likely around 150.8, with a break above signaling a potential move towards the 153.1 levels.

Trading Ideas:
* Naturalgas trading range for the day is 141.7-153.1.
* Natural gas prices increased due to cooler weather, increased demand, and rising gas flows to LNG export plants.
* US gas production has dropped by around 10% in 2024 due to delayed well completions and reduced drilling activities.
* Gas output in Lower 48 states fell to an average of 98.2 billion cubic feet per day in April, down from 100.8 bcfd in March.

Copper

Copper prices experienced a marginal decline yesterday, slipping by 0.11% to settle at 844.25, as the dollar strengthened amid assessments of policy and geopolitical developments. Investor sentiment was influenced by comments from Federal Reserve officials, coupled with a series of inflation data releases that tempered expectations of imminent rate cuts. The uptick in the dollar weighed on copper prices, dampening the metal's appeal to investors. In contrast, China's refined copper production saw a notable increase in March, rising by 7.9% year-on-year to approximately 1.15 million metric tons, according to data from the country's National Bureau of Statistics. The average daily copper output stood at 37,000 tons, indicating sustained production levels in the world's largest consumer of the metal. Moreover, Chilean President Gabriel Boric expressed optimism regarding copper production at state-run miner Codelco, projecting gradual growth to reach 1.7 million tons by 2030 amidst expectations of rising copper prices. Additionally, Trafigura highlighted flourishing activity in sectors such as electric vehicles, power infrastructure, AI, and automation, forecasting an increase of at least 10 million metric tons in copper consumption over the next decade. Supply constraints, including disruptions like the closure of First Quantum's Cobre mine in Panama last year, contributed to copper's upward price momentum. From a technical standpoint, the copper market observed long liquidation, with open interest declining by 20.83% to settle at 2790 contracts, while prices dipped by 0.9 rupees. Support for copper is anticipated at 840.7 levels, with potential downside targeting 837.1. Conversely, resistance is likely around 848.2, with a breakthrough potentially leading to a test of 852.1 levels.

Trading Ideas:
* Copper trading range for the day is 837.1-852.1.
* Copper dropped as dollar gained as investors assessed policy and geopolitical developments.
* China's refined copper production in March rose 7.9% from the prior year
* Copper demand to boom as new technology drives power consumption, Trafigura says

Zinc

Zinc prices experienced a slight decline yesterday, slipping by 0.48% to settle at 249.45, as profit booking ensued following recent gains driven by fund buying and concerns about supply. The market reacted to data indicating a 4.57% month-on-month increase in China's refined zinc production, reaching 525,500 metric tons in March. Despite this uptick, total output from January to March saw a modest year-on-year increase of 1.63%, slightly surpassing expectations. Positive signals emerged from China's manufacturing sector, with factory activity expanding at the fastest pace in over a year, mirroring similar trends in the US and Germany. Research agency BMI forecasts a continuation of refined zinc production growth in 2024, following robust expansion in 2023. Widening annual production deficits in previous years, coupled with significant growth in China, have underpinned this trend. However, BMI anticipates a surplus of 192,000 tonnes in 2024, slightly lower than the 196,000-tonne surplus recorded in 2023. The expected resumption of Glencore’s Nordenham smelter in Germany and the completion of Norway’s Odda mine expansion later in the year are poised to bolster global zinc production. Despite the forecasted increase in global zinc consumption by 2.6% in 2024, sluggish growth in the world economy is expected to outweigh this demand. Technically, the zinc market observed long liquidation, with a notable 20.67% drop in open interest to settle at 1739 contracts, while prices declined by 1.2 rupees. Support for zinc is anticipated at 247.4 levels, with potential downside targeting 245.3. On the upside, resistance is likely around 251.8, with a break above potentially leading to a test of 254.1 levels.

Trading Ideas:
* Zinc trading range for the day is 245.3-254.1.
* Zinc dropped on profit booking after prices gained amid worries about supply
* Research agency BMI, said refined zinc production growth will continue to rebound in 2024.
* The anticipated resumption of Glencore’s Nordenham smelter and Norway’s Odda mine expansion later in the year is set to bolster global zinc production.

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