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Gold

Yesterday, gold prices inched up by 0.01% to settle at 71,582, driven by a key U.S. inflation report that met expectations, which in turn bolstered hopes for potential Federal Reserve interest rate cuts by September. The market now estimates a 68% likelihood of a rate cut in September, an increase from 64% before the inflation data release, according to the CME FedWatch tool. San Francisco Federal Reserve Bank President Mary Daly noted that the recent data, showing no rise in inflation from April to May, is "good news that policy is working. In terms of global demand, China's gold imports via Hong Kong fell by 38% in April compared to March, with net imports totaling 34.6 metric tons, down from 55.8 tons. This decline contrasts with the high consumption seen in the first quarter of the year, where China recorded a 5.94% year-on-year increase, consuming 308.91 metric tons of gold according to the China Gold Association (CGA). In India, gold demand remained weak due to high prices, with some buyers delaying purchases in anticipation of a potential import duty cut in the upcoming budget. Indian dealers offered discounts of up to $9 an ounce over official domestic prices, compared to the previous week's $13 discount. Technically, the gold market is experiencing short covering, evidenced by a 0.34% drop in open interest to 14,162 while prices increased by 10 rupees. Gold finds support at 71,370, and if prices fall below this level, they could test 71,160. On the upside, resistance is seen at 71,820, with potential testing of 72,060 if prices move higher.
 

Trading Ideas:
* Gold trading range for the day is 71160-72060.
* Gold steadied after a key U.S. inflation report came broadly in line with expectations
* Gold was also supported by a decline in the U.S. Treasury yields
* PCE last month followed an unrevised 0.3% gain in April data, while consumer spending rose moderately.


Silver
Silver settled up by 0.43% at 89,540, driven by expectations of looming rate cuts by major central banks, which boosted the appeal of non-interest-yielding bullion assets. The Federal Reserve's preferred inflation gauge in the US showed a slowdown to its lowest annual rate since 2021, raising hopes for two rate cuts by the central bank this year. Similarly, the BoE is anticipated to cut rates after the UK’s election, and the PBoC is expected to implement more rate cuts alongside economic stimulus measures. San Francisco Federal Reserve Bank President Mary Daly highlighted the gradual cooling of inflation, indicating that current policies are working effectively, although she expects inflation to remain above the Fed’s 2% target potentially through the end of 2025. India's silver imports in the first four months of the year have already exceeded the total for all of 2023 due to rising demand from the solar panel industry and investor bets on silver outperforming gold. This surge in imports could support global silver prices, which are near their highest level in over a decade. India imported a record 4,172 metric tons of silver from January to April, up from 455 tons during the same period last year, with almost half of these imports coming from the United Arab Emirates to benefit from lower import duties. Technically, the market is experiencing fresh buying with a 9.41% increase in open interest to 21,058, while prices rose by 384 rupees. Silver is currently supported at 88,960, with a potential test of 88,375 levels if this support is breached. On the upside, resistance is expected at 90,405, with prices potentially testing 91,265 if resistance is surpassed.
 

Trading Ideas:
* Silver trading range for the day is 88375-91265.
* Silver gains as looming rate cuts by major central banks lifted the bullion prices.
* The Fed’s preferred gauge of underlying inflation in the US economy slowed to its lowest since 2021 on an annual basis
* Fed’s Daly said the latest data showing inflation did not rise at all from April to May is "good news that policy is working."


Crudeoil
Yesterday, crude oil prices settled marginally higher by 0.01% at 6,805, amidst a backdrop of mixed signals. The market reacted to a surprising build in U.S. stockpiles, which raised concerns about sluggish demand from the world's largest oil consumer. However, potential supply disruptions due to escalating tensions in the Middle East, particularly with the Gaza conflict, helped cap declines in oil prices. Additionally, expectations of robust demand during the U.S. summer driving season provided some support to the market. U.S. consumer confidence dipped this month, contributing to economic uncertainty, while a stronger U.S. dollar also exerted downward pressure on oil prices following hawkish remarks from Federal Reserve officials. The U.S. Commodity Futures Trading Commission (CFTC) reported that money managers reduced their net long positions in U.S. crude futures and options by 1,050 contracts to 159,837 in the week ending June 18. Data from the Energy Information Administration (EIA) showed a 3.6 million-barrel rise in U.S. crude inventories to 460.7 million barrels, contrary to expectations of a 2.9 million-barrel draw. At the Cushing, Oklahoma delivery hub, crude stocks decreased by 226,000 barrels. Refinery crude runs and utilization rates both fell, with runs down by 233,000 barrels per day and utilization rates dropping by 1.3 percentage points. Technically, the market is under short covering, as indicated by an 8.53% drop in open interest to 4,483, while prices edged up by 1 rupee. Crude oil has support at 6,743, and a move below this level could see it testing 6,681. On the upside, resistance is anticipated at 6,883, with potential testing of 6,961 if prices move higher.
 

Trading Ideas:
* Crudeoil trading range for the day is 6681-6961.
* Crude oil settled flat as surprise build in U.S. stockpiles fuelled fears about slow demand
* Money managers cut their net long U.S. crude futures and options positions in the week to June 18
* Crude stocks at the Cushing, Oklahoma, delivery hub fell by 226,000 barrels in the week, the EIA said.


Naturalgas
Yesterday, natural gas prices declined by 3.97% to settle at 217.8 due to signs of increasing production and high storage levels. Despite forecasts of a prolonged heat wave across the U.S. through mid-July, which typically drives up demand for natural gas to power air conditioners, the market saw a significant drop. The financial firm LSEG reported that gas output in the Lower 48 U.S. states had increased to an average of 98.5 billion cubic feet per day (bcfd) in June, up from 98.1 bcfd in May. On a daily basis, production was expected to drop to a two-week low of 97.6 bcfd, down from an 11-week high of 100.4 bcfd earlier in the week. Meteorologists continue to project hotter-than-normal weather across the Lower 48 states through at least July 11, maintaining high demand for natural gas. However, gas flows to the seven major U.S. LNG export plants decreased slightly to 12.8 bcfd in June from 12.9 bcfd in May, and well below the record high of 14.7 bcfd in December 2023. U.S. utilities added 52 billion cubic feet of gas into storage for the week ending June 21, 2024, just shy of market expectations of 53 billion cubic feet. Technically, the market is under fresh selling pressure, indicated by a 22.93% increase in open interest to 27,914 while prices dropped by 9 rupees. Natural gas is currently supported at 213.2, with a potential test of 208.5 if prices decline further. On the upside, resistance is anticipated at 226.7, with prices possibly reaching 235.5 if they move higher.
 

Trading Ideas:
* Naturalgas trading range for the day is 208.5-235.5.
* Natural gas fell on signs producers were slowly boosting output to meet rising summer demand.
* US utilities added 52 billion cubic feet of gas into storage
* Speculators increased net long futures and options positions on the New York Mercantile and Intercontinental Exchanges.



Copper
Copper settled up by 0.75% at 840.5, driven by a 1% weekly decline in Shanghai Futures Exchange-monitored inventories. However, gains were capped by an uncertain global demand outlook and rising overall inventories. PMI reports indicated a weak manufacturing outlook in major economies, further dampened by slowing industrial demand in China. Despite an expected seasonal drawdown, Chinese copper inventories remained high, driven by robust domestic production and increased smelting from scrap. Consequently, Shanghai bonded warehouse deliveries continued to trade at a discount to LME prices for over a month. Shanghai Futures Exchange copper inventories stood at 322,910 tons, significantly higher than the 30,000 tons recorded in January. Meanwhile, LME-approved warehouse stocks surged over 60% since mid-May to 167,825 tons, mainly due to deliveries from China to Asian warehouses. This lack of supply concerns on the LME market has led to a record discount for cash copper against the three-month contract, currently around $135 a ton. The ICSG reported a 13,000 metric ton surplus in the global refined copper market for April, compared to 123,000 metric tons in March. China's unwrought copper imports in May rose 15.8% year-on-year to 514,000 metric tons, despite weak physical consumption and high copper prices, imports totaled 2.33 million tons, up 8.8% year-on-year. Copper concentrate imports in May were 2.26 million tons, down 11.7% year-on-year, but up 2.7% to 11.59 million tons for the first five months of 2024. Technically, the market is experiencing short covering with a 6.49% drop in open interest to 8,896, while prices rose by 6.25 rupees. Copper is currently supported at 836, with a potential test of 831.6 levels if support is breached. On the upside, resistance is expected at 845.5, with prices potentially testing 850.6 if resistance is surpassed.
 

Trading Ideas:
* Copper trading range for the day is 831.6-850.6.
* Copper gains as Shanghai warehouse copper stocks down 1% week on week
* The latest PMI reports have so far pointed to a poor outlook for manufacturing in major economies
* Chinese copper inventories also held near their highest since 2020 in June


Zinc
Zinc settled up by 0.17% at 265.35, buoyed by expectations of improved demand in China following recent price declines and supportive monetary policies from the country's central bank. The People's Bank of China reaffirmed its commitment to a accommodative monetary stance and stability in exchange rates, which bolstered market sentiment. However, gains were tempered by disappointing industrial output in China for May, underscoring weak demand amid a contractionary official manufacturing PMI in the world's largest consumer of copper. China's zinc concentrate imports saw a significant 24% decline in the first four months of the year compared to the previous year, reflecting a tightening raw materials market. Spot treatment charges for imported zinc concentrates plummeted to $30-50 per ton, insufficient to cover processing costs for many Chinese smelters, prompting a shift towards domestic sources for zinc supply. Globally, zinc mine production has faced challenges, declining by 2% in 2022 and another 1% in 2023, with no recovery seen in the first quarter of this year according to the International Lead and Zinc Study Group (ILZSG). This supply squeeze has been exacerbated by restarts of idled smelter capacity in Europe, reducing spot market concentrate availability. On LME, zinc stocks have increased substantially, rising from 30,475 tons to 255,900 tons since the start of January, reflecting ongoing dynamics in warehouse inventory management and financing activities. Technically, the market is witnessing fresh buying with a 1.37% increase in open interest to 2,593, alongside a marginal price increase of 0.45 rupees. Zinc is currently supported at 263.8, with a potential test of 262.1 levels if support breaks down. Resistance is anticipated at 268, with potential upside to 270.5 upon breaching resistance levels.
 

Trading Ideas:
* Zinc trading range for the day is 262.1-270.5.
* Zinc gains amid hopes of improved demand in China following recent price drops and supply concerns.
* The global zinc market surplus fell to 22,100 metric tons in April from 70,100 tons in March.
* In China, zinc concentrate imports decreased by 24% in the first four months of this year compared to the previous year.


Aluminium
Aluminium closed up by 1.07% at 230.4, boosted by China's central bank reaffirming its supportive monetary policy stance aimed at economic stability. Despite this positive sentiment, gains were constrained by indications of ample supply and subdued demand pressures. Inventories monitored by the Shanghai Futures Exchange increased by 2.0% week-on-week, underscoring ongoing supply dynamics. In the US, Manufacturing PMI rose to a three-month high of 51.7 in June, exceeding expectations and indicating modest expansion in the sector. However, China opted to maintain its key lending rates unchanged, reflecting limited scope for further monetary easing amid narrowing interest rate margins and a weakening currency. Globally, primary aluminium production climbed 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. China specifically saw a robust 7.2% increase in aluminium production to 3.65 million tons in May compared to a year ago, contributing to a cumulative production of 17.89 million tons in the first five months of the year, up 7.1% from the previous year. China's aluminium imports surged by 61.1% year-on-year in May, driven by increased shipments from Russia, despite Western sanctions affecting Russian metal exports. This influx included 310,000 metric tons of unwrought aluminium and products last month alone, with significant imports continuing from Russia throughout the year. Technically, the aluminium market saw short covering with a 2.69% decrease in open interest to 4,333, coupled with a price increase of 2.45 rupees. Currently, aluminium is supported at 228.8, with potential downside testing towards 227.2 if support levels are breached. Resistance is expected at 231.9, with potential upward movement towards 233.4 upon breaching resistance levels, highlighting the current technical outlook.
 

Trading Ideas:
* Aluminium trading range for the day is 227.2-233.4.
* Aluminium gains as sentiment was lifted by China's central bank's reinforcement of its easing monetary stance.
* Global primary aluminium output rose 3.4% year on year to 6.1 million tons in May
* China aluminium production up 7.2 % to 3.65 mln tonnes in May


Cottoncandy
Yesterday, Cotton Candy prices increased by 0.44% to settle at 58,800. This rise was driven by delays in shipments from the US and Brazil, which spurred demand for Indian cotton from mills in neighboring countries. Additionally, strong cottonseed prices have supported the fiber's market value. Despite the ongoing sowing for the Kharif 2024 season in southern Indian states like Karnataka, Telangana, and Andhra Pradesh, which have begun receiving monsoon rains, cotton prices remained firm. In Telangana, an increase in cotton acreage is anticipated as some chili farmers are expected to switch to cotton due to weak prices of chili. Conversely, in North India, cotton planting is projected to drop by about 25% due to factors such as increased pest infestations and rising labor costs. The 2024/25 U.S. cotton projections indicate higher beginning and ending stocks compared to the previous month, with production, domestic use, and exports remaining unchanged. Ending stocks are now 400,000 bales higher at 4.1 million, accounting for 28% of use. Globally, the 2024/25 cotton balance sheet shows increases in beginning stocks, production, and consumption, with world trade remaining unchanged. World ending stocks are projected to be 480,000 bales higher than in May at 83.5 million. Production forecasts have been raised by 90,000 bales due to higher area and yield in Burma. Consumption is also up by 80,000 bales, with increases in Vietnam and Burma offsetting reductions elsewhere. Technically, the market is under short covering, with unchanged open interest at 373 and prices up by 260 Rupees. Cotton Candy is supported at 58,640, with a potential test of 58,490 if prices decline. Resistance is anticipated at 58,920, and a move above this level could see prices testing 59,050.
 

Trading Ideas:
* Cottoncandy trading range for the day is 58490-59050.
* Cotton seen supported amid delay in arrival of shipments from US, Brazil.
* 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 experienced a significant decline of -2.79% to settle at 16924, driven primarily by news of increased sowing activities across major producing states in India. Growers, encouraged by favorable pricing, have expanded turmeric cultivation significantly this year compared to the previous season. Reports indicate that sowing along the Erode line has doubled, while Maharashtra, Telangana, and Andhra Pradesh have seen an estimated 30-35% increase in sowing compared to last year. This surge in cultivation is expected to boost turmeric production substantially for 2024, with estimates ranging between 45 to 50 lakh bags, up from 80 to 85 lakh bags in 2023. Despite the optimistic outlook for increased production, concerns about future supply dynamics have emerged. While the outstanding stock from the previous season was significant at 35-38 lakh bags, it is projected to be zero this year, indicating potential supply tightness going forward. It is estimated that despite the increased sowing, the upcoming turmeric crop may only amount to around 70-75 lakh bags, which could potentially fall short of meeting future demand, particularly in 2025. Internationally, turmeric exports showed a decline in April 2024, with shipments dropping by 19.07% compared to March 2024 and by 27.98% compared to April 2023. Conversely, imports surged in April 2024, rising by 192.36% from March 2024 and by 570.31% from April 2023, indicating shifting global trade dynamics for turmeric. Technically, the turmeric market witnessed long liquidation, evidenced by a -0.52% drop in open interest to 20275 contracts alongside a price decline of 486 rupees. Support levels are identified at 16700, with a potential downside test towards 16474 if these levels are breached. Resistance is expected at 17302, with a breakout potentially pushing prices towards 17678.
 

Trading Ideas:
* Turmeric trading range for the day is 16474-17678.
* 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 17741.65 Rupees dropped by -0.53 percent.


Jeera
Jeera prices closed higher by 0.29% at 29,075 yesterday, driven by robust domestic and export demand coupled with tight global supplies. The market sentiment was bolstered by farmers holding back stocks in anticipation of better prices, further supporting the upward momentum. However, the upside in prices was capped due to expectations of higher production this season, projected to increase by 30% to 8.5-9 lakh tonnes. This increase stems from substantial rises in cultivation areas in Gujarat and Rajasthan, reflecting favorable weather conditions and previous season's high prices incentivizing farmers. The export dynamics of jeera have shown resilience, with significant increases observed year-on-year. In April 2024, jeera exports surged by 133.55% compared to April 2023, highlighting strong international demand despite higher domestic prices. This trend underscores India's role as a key player in the global cumin market, although the upcoming higher production forecasts and declining international prices pose challenges for sustained export growth. Globally, jeera production has seen significant growth, with notable increases in China, Syria, Turkey, and Afghanistan. China's cumin output has more than doubled, while other countries are also expecting higher yields, contributing to expectations of a supply surge in the market. This influx of new supplies is likely to exert downward pressure on jeera prices in the coming months. In terms of technical analysis, the jeera market witnessed short covering with a 1.2% drop in open interest to settle at 2,718 contracts, alongside an increase of 85 rupees in prices. Currently, jeera finds support at 28,770, and a break below this level could test 28,460. On the upside, resistance is anticipated at 29,430, and a move above this level might lead to prices testing 29,780.
 

Trading Ideas:
* Jeera trading range for the day is 28460-29780.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* 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 29005 Rupees dropped by -0.13 percent.

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