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Gold

Gold prices experienced a modest uptick yesterday, closing 0.17% higher at 72806 amid a complex interplay of geopolitical tensions and economic uncertainties. The initial boost stemmed from Israel's missile launch on Iran, triggering a flight to safety among investors. However, reports indicating intact nuclear facilities tempered the impact, highlighting the volatile nature of geopolitical events on market sentiment. Economic indicators from the US, such as robust retail sales and a bullish Philadelphia Manufacturing PMI, coupled with hawkish sentiments from Federal Reserve officials, exerted downward pressure on gold. The prospect of prolonged restrictive interest rates dimmed gold's appeal as a non-yielding asset, reflecting the intricate dance between economic fundamentals and market sentiment. Despite this, physical gold demand remained resilient in China, driven by a depreciating yuan and escalating Middle East tensions, underpinning safe-haven buying. However, in India, elevated prices subdued activity despite geopolitical concerns. Chinese dealers maintained premiums, reflecting sustained demand despite higher prices. Conversely, Indian dealers offered discounts compared to the previous week, signaling subdued demand amidst elevated prices. From a technical standpoint, the market witnessed short-covering as open interest dropped by -1.51% to settle at 21118, while prices rose by 123 rupees. Support levels are identified at 72425, with potential downside targets at 72045. Conversely, resistance is anticipated at 73070, with a breakthrough potentially testing 73335. This technical overview underscores the nuanced dynamics influencing gold prices, blending market sentiment with technical indicators to navigate future price movements.

Trading Ideas:
* Gold trading range for the day is 72045-73335.
* Gold gains fueled by a confluence of geopolitical tensions and economic uncertainties.
* Early on Friday, Israel launched missiles on Iran, prompting investors to flee to safety.
* Hot economic data from the US, and hawkish remarks from several Fed officials exerted downward pressure.

Silver

Silver closed higher yesterday, gaining 0.28% to settle at 83507, driven by escalating geopolitical tensions following Israel's strikes on Iran. The market reacted to these developments alongside hawkish statements from the Federal Reserve and robust US economic data, which bolstered expectations of prolonged restrictive policies. This sentiment dampened interest in non-interest-bearing assets like silver, despite its continued strong industrial demand, particularly in electronics and solar power sectors. The structural deficit in the silver market was evident, with above-ground inventories declining sharply in recent years, reflecting a tightening supply-demand balance. According to the Silver Institute, the global silver deficit is projected to increase by 17% in 2024, reaching 215.3 million troy ounces. This growth is fueled by a 2% rise in demand driven by robust industrial consumption, juxtaposed against a 1% decline in total supply. Despite a 30% decrease last year, the deficit still stood at a significant 184.3 million ounces, underlining the persistent supply-demand imbalance. Industrial demand, particularly in electronics, saw remarkable growth, while stocks in commodity exchange depositories and London vaults dwindled by 5% in 2023. Technically, the market witnessed short covering, with open interest dropping by -2.38% to settle at 22733, coinciding with a price increase of 234 rupees. Silver finds support at 82895, with potential downside to 82285, while resistance is anticipated at 83955, with a breakout possibly leading to testing the 84405 level. Despite the geopolitical tensions and hawkish Fed stance, silver's industrial demand and structural deficit could offer support, but market dynamics and investor sentiment will continue to influence price movements in the near term.

Trading Ideas:
* Silver trading range for the day is 82285-84405.
* Silver gains as geopolitical tensions escalated in the aftermath of Israel's retaliatory strikes against Iran.
* Hawkish Fed statements and strong US economic data heightened expectations of prolonged restrictive policy by the regulator.
* Still, industrial demand for the metal remained strong amid growing applications in electronics and solar power.

Crude oil

Crude oil managed to eke out a marginal gain of 0.01% yesterday, settling at 6897, following Iran's efforts to downplay reported Israeli attacks, signaling a potential de-escalation of tensions in the Middle East. However, the market remained sensitive to geopolitical developments, especially as U.S. lawmakers proposed sanctions on Iran's oil exports as part of a Ukraine aid package. This move could affect global oil trade, particularly involving Chinese financial institutions. Despite these uncertainties, bullish sentiments prevailed as Goldman Sachs and Commerzbank raised their Brent crude forecasts, citing geopolitical tensions, rising demand, and OPEC+'s commitment to restrained supply. However, demand-side concerns emerged due to weak March economic data from China, the world's top crude importer, and fears of delayed interest rate cuts by the US Federal Reserve. Furthermore, the reimposition of sanctions on Venezuelan oil by the US and potential new restrictions on Iranian oil by the EU added to the market's complexity. Meanwhile, the US Energy Information Administration (EIA) reported an anticipated increase in oil output from top shale-producing regions in May, reaching the highest level in five months. This rise, particularly in the Permian basin, could offset any supply constraints. From a technical perspective, fresh buying activity was observed, with open interest increasing by 15.84% to settle at 4089, despite a minimal price increase of 1 rupee. Crude oil is currently finding support at 6767, with potential downside to 6636, while resistance is anticipated at 7048, with a breakout possibly leading to testing the 7198 level.

Trading Ideas:
* Crudeoil trading range for the day is 6636-7198.
* Crude oil settled flat after Iran played down reported Israeli attacks on its soil.
* Demand-side uncertainties also weighed on the market following weak March economic data for China.
* Goldman Sachs and Commerzbank raised their Brent crude forecasts, taking into account geopolitical tensions as well as the prospect of rising demand.

Natural gas

Natural gas prices edged slightly lower yesterday, settling down by -0.07% at 146.8, reflecting a market grappling with a significant oversupply situation. Despite this, the downside remained limited as forecasts hinted at cooler weather ahead, promising increased demand for the commodity next week. Additionally, the surge in gas flowing to LNG export plants, including Freeport LNG, provided some support to prices. The oversupply narrative was underscored by data from the U.S. EIA, revealing a substantial addition of 50 billion cubic feet (bcf) of gas into storage during the week ended April 12. Notably, US gas production has declined by approximately 10% in 2024, with key energy firms like EQT and Chesapeake Energy delaying well completions and scaling back drilling activities. The decline in gas output in the Lower 48 US states, dropping to a preliminary three-month low of 95.8 bcfd on Thursday, reflected the concerted efforts of energy firms to manage the oversupply situation. However, meteorological projections of near-normal weather through April 26, followed by a warmer-than-normal period from April 27 to May 3, may present challenges in rebalancing supply and demand dynamics in the near term. From a technical perspective, the market witnessed long liquidation as open interest dropped by -13.09% to settle at 43384, coinciding with a slight decrease in prices. Support levels are identified at 143.8, with a potential downside target at 140.8, while resistance is expected at 150.3, with a breakout potentially testing 153.8. This technical overview highlights the ongoing struggle between oversupply concerns and weather-related demand dynamics, guiding market participants in navigating price movements in the natural gas market.

Trading Ideas:
* Naturalgas trading range for the day is 140.8-153.8.
* Natural gas dropped amid a massive oversupply of gas in storage.
* U.S. utilities added 50 billion cubic feet of gas into storage during the week ending April 12.
* Gas production fell by around 10% so far in 2024 due to delayed well completions and reduced drilling activities.

Copper

Copper surged by 0.82% yesterday, closing at 845.15, as investment funds continued their buying spree amidst mounting supply concerns. This rally was fueled by worries over potential output cuts due to a shortage of raw materials and optimism surrounding increased demand driven by the global green energy transition. Citi's bullish projection of copper prices up to $10,500 per ton, with an average of $10,000 in the second and third quarters, further bolstered market sentiment. Chinese copper smelters responded to the low supply of copper ore by scaling back activity levels, aligning with pledges to reduce output by up to 10% this year. This reduction exacerbates the sector's overcapacity, pushing smelting fees to multi-year lows. Additionally, disruptions in key mining regions like Zambia and Panama, coupled with South American mines failing to meet production targets in 2023, underscored the challenges in the copper supply chain. On the demand side, China's strong manufacturing PMIs and a surge in unwrought copper imports by 16% in March to 474,000 tonnes hinted at improving factory activity after a period of pessimism. China's refined copper production also saw a notable increase of 7.9% year-on-year in March, reaching around 1.15 million metric tons, according to data from the National Bureau of Statistics. Technically, the market witnessed short covering, with open interest dropping by -5.04% to settle at 3524, alongside a price increase of 6.85 rupees. Copper is currently supported at 839.6, with potential downside to 833.9, while resistance is anticipated at 848.7, with a breakout possibly leading to testing the 852.1 level.

Trading Ideas:
* Copper trading range for the day is 833.9-852.1.
* Copper gains as investment funds continued a buying spree driven by supply concerns.
* Copper prices were underpinned by concerns of output cuts due to shortage of raw material
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.1 % from last Friday.

Zinc

Zinc prices surged by 1.25% yesterday, closing at 250.65, fueled by fund buying and supply concerns. The uptick in prices was supported by data indicating a rise in China's refined zinc production, albeit slightly higher than expected. China, the largest zinc consumer globally, exhibited robust factory activity, mirroring positive signals from the US and Germany's manufacturing sectors, signaling a potential uptick in demand. Amidst this backdrop, research agency BMI forecasts continued rebound in refined zinc production in 2024, following significant growth in 2023. Despite expectations of an annual surplus in 2024, driven by rising production and sluggish global economic growth, the anticipated resumption of operations at Glencore’s Nordenham smelter in Germany and the completion of Norway’s Odda mine expansion are poised to bolster global zinc output. However, technical analysis suggests short covering in the market, evidenced by a drop in open interest by -8.32% to settle at 2192, accompanied by a price increase of 3.1 rupees. Support levels for zinc are identified at 248.5, with potential downside targets at 246.1, while resistance is anticipated at 252.1, with a breakout potentially testing 253.3. The dynamics in the zinc market highlight a delicate balance between supply and demand forces. Despite concerns over production surpluses and sluggish economic growth, positive signals from manufacturing sectors and ongoing supply disruptions hint at a potential upside for zinc prices.

Trading Ideas:
* Zinc trading range for the day is 246.1-253.3.
* Zinc prices gained amid fund buying and 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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