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Gold

Gold prices settled up by 0.88% at 73311, reflecting market sentiment that the Federal Reserve might soon lower interest rates amid signs of a cooling US economy. Recent data indicated that US headline inflation slowed to 3% in June, its lowest in a year, while the annual core gauge dropped to 3.3%, a three-year low. Additionally, revised US payrolls figures suggest a weakening labor market, aligning with the Fed's requirements for rate cuts. However, Fed Chair Powell emphasized that rate cuts would not occur until inflation trends toward the 2% target sustainably. Internationally, gold market dynamics showed mixed signals. The People's Bank of China maintained its gold reserves at 2,264 tonnes for the second consecutive month, while Poland's central bank increased its reserves by 4 tonnes in June. Despite three years of outflows from gold ETFs due to high global interest rates, June saw an inflow of 17.5 metric tons, slightly mitigating first-half losses for 2024. Conversely, China's gold imports via Hong Kong fell 38% in April, highlighting decreased consumption compared to the first quarter. In India, physical gold dealers continued offering discounts due to high prices and anticipated import duty cuts, marking the ninth consecutive week of such discounts. Chinese demand also showed signs of weakness, with dealers charging premiums of $11-$24 per ounce over international spot prices. Technically, the market is under fresh buying, with open interest rising by 4.54% to 12859 and prices up by 643 rupees. Gold finds support at 72915, with potential testing of 72520 levels, while resistance is expected at 73520, possibly reaching 73730 on a breakout.

Trading Ideas:

* Gold trading range for the day is 72520-73730.

* Gold surged as key metrics of the US economy continued to pave the way for Fed to lower interest rates.

* Data showed that headline inflation in the US slowed more than expected to a one-year low of 3% in June

* China halts gold purchases for the second month, while other central banks boost reserves

Silver

Silver prices rose by 1.46% to 94190, buoyed by a weakening dollar following unexpected declines in US headline consumer prices in June. The consumer price index fell by 0.1%, the first decrease since May, bringing the annual inflation rate to 3%, its lowest in a year. This shift has traders speculating that the Federal Reserve will start cutting interest rates by September, with an 89% probability of a rate cut now being priced in, up from 73% previously. Despite Fed Chair Jerome Powell's caution about the sustainability of the inflation decline, market expectations are leaning towards monetary easing. Supporting silver prices further is the ongoing demand from the solar panel sector, bolstered by India's substantial silver imports. India, the world's largest silver consumer, imported a record 4,172 metric tons from January to April 2024, significantly up from 455 tons during the same period last year. This surge is driven by both solar panel demand and investor anticipation of silver outperforming gold. Notably, almost half of these imports originated from the United Arab Emirates, taking advantage of lower import duties. Additional economic indicators, including falling consumer inflation expectations and weak labor market data, reinforce the expectation of imminent rate cuts by the US central bank. The silver market is currently under fresh buying momentum, as indicated by a 3.16% increase in open interest to 24072, with prices rising by 1358 rupees. Silver finds support at 93360, with potential testing at 92535 levels, while resistance is projected at 94800, possibly reaching 95415 upon a breakout.

Trading Ideas:

* Silver trading range for the day is 92535-95415.

* Silver rose as dollar dropped after data showed headline consumer prices unexpectedly fell in June.

* Data showed the consumer price index dipped 0.1% last month after being unchanged in May

* Traders are pricing in an 89% probability of a rate cut in September, up from 73% on Wednesday

Crudeoil

Crude oil prices increased by 0.51% to 6893, driven by optimism for potential rate cuts in the United States following data indicating a slowdown in inflation. U.S. consumer prices fell unexpectedly, marking the smallest annual increase in a year, reinforcing the view that disinflation is progressing. Global oil demand growth is projected to decelerate to just under a million barrels per day (bpd) for this year and next, according to the International Energy Agency (IEA). This is attributed to a contraction in Chinese consumption amid economic challenges, with the second quarter seeing the lowest quarterly increase in over a year at 710,000 bpd. The IEA's forecast remains largely unchanged from last month, predicting a growth of 970,000 bpd this year and 980,000 bpd next year. The EIA reported a significant draw in crude inventories, with a decrease of 3.4 million barrels to 445.1 million barrels for the week ending July 5, surpassing expectations of a 1.3 million-barrel draw. Additionally, crude stocks at the Cushing, Oklahoma delivery hub fell by 702,000 barrels. Refinery crude runs increased by 317,000 bpd, raising utilization rates by 1.9 percentage points. U.S. gasoline stocks fell by 2 million barrels, while distillate stockpiles rose by 4.9 million barrels, both exceeding market expectations. Technically, the crude oil market is experiencing fresh buying momentum, as evidenced by a 2.62% increase in open interest to 4655, with prices rising by 35 rupees. Crude oil finds support at 6840, with potential testing of 6788 levels, while resistance is anticipated at 6929, potentially reaching 6966 on a breakout.

Trading Ideas:

* Crudeoil trading range for the day is 6788-6966.

* Crude oil prices rose as hopes rose for rate cuts in US after data showed a slowdown in inflation.

* Global oil demand growth will slow to just under a mbpd this year and next – IEA

* Global demand in the second quarter rose by 710,000 bpd year on year in its lowest quarterly increase in over a year - IEA

Naturalgas

 
Natural gas prices fell by 2.31% to 190.4, driven by a larger-than-expected storage build reported by the EIA. This marks the fifth consecutive week of decline for natural gas, influenced by increased production, reduced gas flow to LNG export plants following the Freeport LNG shutdown due to Hurricane Beryl in Texas, and an oversupply in storage. Gas production in the Lower 48 US states has climbed to 102.4 billion cubic feet per day (bcfd) in July, up from a low of 99.5 bcfd in May. Concurrently, gas flow to major US LNG export facilities has decreased to 12.2 bcfd in July from 12.8 bcfd in June, primarily due to the Freeport LNG closure. Meteorologists predict above-average temperatures across the Lower 48 states until at least July 25, potentially affecting demand. US utilities added 65 billion cubic feet of gas into storage during the week ending July 5, 2024, surpassing market expectations of a 56 billion cubic feet increase. This marks the 13th consecutive week of seasonal storage increases, bringing stockpiles to 3,199 billion cubic feet (Bcf), which is 283 Bcf higher than the same period last year and 504 Bcf above the five-year average of 2,695 Bcf. At 3,199 Bcf, total working gas is above the five-year historical range. Technically, the natural gas market is experiencing fresh selling pressure, evidenced by a 5.28% increase in open interest to 37,561, with prices falling by 4.5 rupees. Natural gas currently finds support at 187.9, with the possibility of testing 185.3 levels, while resistance is anticipated at 194.7, potentially reaching 198.9 upon a breakout. The market's outlook remains bearish amid these supply and demand dynamics.

Trading Ideas:

* Naturalgas trading range for the day is 185.3-198.9.

* Natural gas dropped due to a larger-than-expected storage build reported by the EIA.

* Pressure also seen driven by increased output, decreased gas flow to LNG export plants.

* US utilities added 65 billion cubic feet of gas into storage, 2024

Copper

Copper prices declined by 1.46% to settle at 856, reflecting poor demand prospects, especially in China, and an oversupplied market, as evidenced by rising inventories in London Metal Exchange (LME) warehouses. Copper stocks in LME warehouses increased by 11,300 tons, bringing the total to 206,775 tons, the highest since October 2021 and nearly double the levels from mid-May. Market optimism had been buoyed by expectations of growth-boosting measures from China's leaders at their upcoming meeting. However, the surge in LME copper inventories dampened these sentiments. The market is also under pressure from the record high discount for cash over the three-month copper contract, exceeding $160 a ton, indicating a lack of concern about near-term supply shortages. China's refined copper production increased by 8.2% in the first five months of the year, reaching 5.54 million tons, as smelters ramped up capacity. Meanwhile, major copper producers like Codelco and BHP-controlled Escondida mine reported increased production. The global refined copper market showed a 13,000 metric ton surplus in April, narrowing from a 123,000 metric ton surplus in March, with a 299,000 metric ton surplus for the first four months of the year compared to 175,000 metric tons the previous year. China's copper imports rose 15.8% year-on-year in May to 514,000 metric tons, defying expectations amid weak physical consumption and record high prices. Technically, the copper market is experiencing fresh selling pressure, with a 13.73% increase in open interest to 7,846 and prices down by 12.7 rupees. Copper finds support at 849.3, with potential testing of 842.6 levels, while resistance is likely at 868.5, potentially reaching 881 on a breakout.

Trading Ideas:

* Copper trading range for the day is 842.6-881.

* Copper slipped amid poor demand prospects particularly in China.

* China's leaders will aim to boost growth with stimulus at their third plenum meeting on July 15-18.

* LME Stocks jumped 11,300 tons taking the total to 206,775 tons, the highest since October 2021

Zinc

Zinc prices edged down by 0.22% to settle at 273, influenced by a rise in China's refined zinc output and an increase in inventories. China's refined zinc production in May 2024 was 536,200 metric tons, marking a 6.26% month-on-month increase. This boosted optimism about demand prospects ahead of the Communist Party's upcoming third plenum, expected to focus on economic policies and reforms from July 15-18. Additionally, China's MMG Ltd temporarily halted operations at its Dugald River zinc mine in Australia for repairs, expected to last about two months. This mill stoppage could exacerbate the tight zinc concentrates market, although MMG anticipates minimal impact on overall 2024 production. Zinc inventories in London Metal Exchange (LME) warehouses increased by 9% to their highest level in nearly three months, signaling a surplus in the market. Despite this, the global zinc market surplus narrowed to 22,100 metric tons in April from 70,100 tons in March, according to the International Lead and Zinc Study Group. For the first four months of the year, the global surplus stood at 182,000 tons, down from 282,000 tons in the same period last year. Technically, the zinc market experienced long liquidation, with a 5.65% drop in open interest to 2,436 and prices declining by 0.6 rupees. Zinc finds support at 271.5, with potential testing at 270 levels, while resistance is anticipated at 275.7, possibly reaching 278.4 upon a breakout. The market remains cautious amid these supply and demand dynamics, awaiting further developments from China's economic policy measures and global market conditions.

Trading Ideas:

* Zinc trading range for the day is 270-278.4.

* Zinc dropped amid 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.

* Zinc inventories in warehouses registered with LME rebounded 9% to their highest level in nearly three months

Aluminium

Aluminium prices edged down by 0.22% to settle at 228.45, influenced by disappointing economic data from China, the world's largest consumer. China's primary aluminium production is nearing record highs as previously idled capacity in Yunnan province ramps up. In May, China's aluminium production increased by 5% year-on-year to 3.65 million metric tons, nearing the annualized 43.0 million tons, close to record highs seen last year. The Chinese central bank has reiterated its commitment to supportive monetary policies to bolster economic stability. However, the global primary aluminium output also saw a rise, increasing by 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. In China, aluminium production rose by 7.2% to 3.65 million tonnes in May from a year earlier, with year-to-date production up by 7.1% to 17.89 million tonnes. This increase is mirrored by a significant jump in China's aluminium imports, which surged by 61.1% in May compared to the previous year, attributed to rising shipments from Russia. Russian aluminium shipments to China increased after Western sanctions led to bans on the delivery of Russian metals. Technically, the aluminium market is experiencing long liquidation, with a 6.39% drop in open interest to 3,544 contracts and a slight decline in prices by 0.5 rupees. Aluminium finds support at 227.6, with potential testing of 226.6 levels, while resistance is likely at 230.2, potentially reaching 231.8 upon a breakout. The market remains cautious amid these supply and demand dynamics, closely watching China's economic policies and global production trends.

Trading Ideas:

* Aluminium trading range for the day is 226.6-231.8.

* Aluminium dropped as disappointing economic data in top consumer China dampened market sentiment.

* 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.

Cottoncandy
Cottoncandy prices settled down marginally by 0.03% at 57,980 due to expectations of favorable weather conditions boosting supplies from key growing regions. However, the downside was limited by delays in shipments from the US and Brazil, which has triggered demand for Indian cotton from mills in neighboring countries. The 2024/25 US cotton projections indicate higher beginning and ending stocks compared to last month. Although projected production, domestic use, and exports remain unchanged, the season average upland farm price has been reduced by 4 cents to 70 cents per pound following a decline in new-crop cotton futures. Ending stocks are projected to be 400,000 bales higher at 4.1 million, accounting for 28% of use. Revisions to the 2023/24 US cotton balance sheet include a 500,000-bale reduction in exports to 11.8 million due to the slowing pace of export shipments, a 50,000-bale increase in domestic use, and a 450,000-bale gain in ending stocks. Globally, the 2024/25 cotton balance sheet shows increased beginning stocks, production, and consumption, with world trade unchanged. This results in world ending stocks being projected 480,000 bales higher than in May at 83.5 million. The forecast for production has been raised by 90,000 bales based on higher area and yield in Burma, while consumption is 80,000 bales higher, with increases in Vietnam and Burma offsetting reductions elsewhere. In Rajkot, a major spot market, the price ended at 27,690.8 rupees, down by 0.31%. Technically, the market is under long liquidation as open interest remained unchanged at 369 while prices declined by 20 rupees. Cottoncandy is currently getting support at 57,920, and a break below could test 57,860 levels. On the upside, resistance is likely at 58,020, with a potential move to test 58,060.

Trading Ideas:

* Cottoncandy trading range for the day is 57860-58060.

* 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 rose by 3.99% to settle at 16,112 as farmers are holding back stocks in anticipation of further price increases. Despite the current upswing, the potential for increased sowing in key regions like Erode, Maharashtra, Telangana, and Andhra Pradesh is likely to limit significant upside movement. Reports indicate that turmeric sowing in these areas could be 30-35% higher than last year. This increase follows an estimated 3-3.25 lakh hectares sown last year, potentially expanding to 3.75-4 lakh hectares this year. The previous year's turmeric production was hindered by unfavorable weather, resulting in an output of 45-50 lakh bags. Additionally, there was an outstanding stock of 35-38 lakh bags. Despite increased sowing this year, the upcoming turmeric crop is expected to yield around 70-75 lakh bags, with no carryover stock anticipated. This projection suggests that the total availability of turmeric will fall short of consumption needs by 2025, indicating a potential tightening of the market in the future. Export and import data also reflect significant fluctuations. In April 2024, turmeric exports dropped by 27.98% compared to the same month in the previous year, with 14,109.09 tonnes exported against 19,590.87 tonnes in April 2023. In Nizamabad, a major spot market, turmeric prices gained by 1.16%, ending at 16,686.05 rupees. The turmeric market is experiencing fresh buying activity, with open interest rising by 0.58% to settle at 15,510 contracts. Prices increased by 618 rupees. Currently, support is seen at 15,682, with a potential test of 15,252 if this level is breached. Resistance is likely at 16,370, and a move above this could see prices testing 16,628.

Trading Ideas:

* Turmeric trading range for the day is 15252-16628.

* Turmeric gains on short covering as farmers are holding back stocks in anticipation of a further rise.

* 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 16686.05 Rupees gained by 1.16 percent.

 Jeera

Jeera prices declined by 0.5% to settle at 27,690, pressured by expectations of higher production. However, the downside was limited due to robust domestic and export demand and tight global supplies. Farmers holding back their stocks in anticipation of better prices also supported the market. This season, jeera production is expected to be 30% higher, estimated at 8.5-9 lakh tonnes, due to a significant increase in cultivation area. In Gujarat, the sowing area increased by 104%, and in Rajasthan by 16%. Global jeera production has seen significant increases, with China's cumin output soaring to over 55-60 thousand tons from the previous 28-30 thousand tons. High prices last season have encouraged 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. These new supplies entering the market are expected to cause a decline in cumin prices. In Gujarat, the total production of cumin is estimated to be a record 4.08 lakh tonnes. The previous record was 3.99 lakh tonnes in 2020-21, while last season's production was 2.15 lakh tonnes. In Rajasthan, cumin production increased by 53%. Overall, production has doubled compared to last year due to increased sowing areas and favorable weather conditions. The jeera market is experiencing fresh selling, with open interest rising by 1.34% to settle at 28,070 contracts. Prices decreased by 140 rupees. Current support is at 27,270, with a potential test of 26,860 if this level is breached. Resistance is likely at 28,120, and a move above this could see prices testing 28,560.

Trading Ideas:

* Jeera trading range for the day is 26860-28560.

* 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 27988.45 Rupees dropped by -0.19 percent.

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