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Gold

Gold experienced a slight decline of 0.18%, settling at 74,137 INR due to profit booking after reaching an all-time high. This peak was driven by optimism that the Federal Reserve might lower rates as early as September. Fed Chair Jerome Powell highlighted that June's lower-than-expected inflation has bolstered confidence in achieving the price growth target, and the Fed may not wait for inflation to hit 2% before starting rate cuts. Federal Reserve Governor Adriana Kugler noted a continued decline in inflation, citing moderating wages and a rebalancing job market as indicators. The job market has seen significant adjustments, with wage growth slowing and demand for workers aligning with pre-pandemic levels. The CME's FedWatch Tool shows markets are fully anticipating a rate cut in September, with traders favoring three 25bps rate cuts instead of two for the year. Globally, expectations for rate cuts by other major central banks in Europe and Asia have also increased demand for precious metals. However, physical gold demand in Asia has decreased due to high prices, leading Indian dealers to offer significant discounts to entice buyers. In India, discounts reached up to $31 per ounce over official domestic prices, while in China, premiums ranged from $8 to $19 per ounce. Technically, the gold market is experiencing long liquidation, with a 0.91% drop in open interest settling at 13,007, and prices down by 136 rupees. Gold is currently supported at 73,890 INR, with a potential test of 73,650 INR if it falls below this level. Resistance is expected at 74,550 INR, with a move above potentially pushing prices to test 74,970 INR.
 

Trading Ideas:
* Gold trading range for the day is 73650-74970.
* Gold pared gains amid profit booking after prices rose to all time high
* Fed's Kugler says recent data indicates inflation headed to 2% target
* Fed’s Powell has said that recent data has boosted confidence that inflation will decline to the 2% target from its current level.
 
 
 Silver
Silver prices fell by 2.04%, settling at 91,942 INR as investors evaluated the likelihood of US interest rate cuts. Despite growing economic challenges, China's Third Plenum has signaled no major changes in economic strategy, with President Xi Jinping urging unwavering faith in the strategic agenda. Analysts have, however, revised China's growth forecasts downward. Concurrently, Federal Reserve Chair Jerome Powell stated that recent data boost confidence that inflation is returning to target, and the Fed might not wait until inflation reaches 2% before cutting rates. Expectations of a wider supply deficit in 2024, marking the fifth consecutive year of shortfall, could push silver prices higher. In the US, manufacturing production rose by 0.4% in June 2024, surpassing market expectations of a 0.2% increase. Durable manufacturing remained unchanged, while nondurable manufacturing increased by 0.8%, and publishing and logging saw a 0.9% rise. Overall industrial production in the US grew by 0.6%, exceeding the anticipated 0.3% increase. Manufacturing output, constituting 78% of total production, advanced by 0.4%, again beating the market forecast of a 0.2% increase. Technically, the silver market is experiencing fresh selling, with a 2.94% increase in open interest, settling at 24,093, and prices dropping by 1,918 INR. Silver is currently supported at 91,185 INR, with a potential test of 90,425 INR if it falls below this level. Resistance is anticipated at 93,140 INR, with a move above this level potentially driving prices to test 94,335 INR.
 

Trading Ideas:
* Silver trading range for the day is 90425-94335.
* Silver fell back as investors continued to assess prospects for US interest rate cuts
* The official messaging from the Third Plenum has so far signaled no major changes in top consumer China’s economic strategy.
* Fed’s Powell said that recent data “add somewhat to confidence” that inflation is returning to target
 
 
 Crudeoil
Crude oil prices rose by 1.95%, settling at 6,911 INR, driven by a decline in U.S. oil stockpiles and a weaker dollar, which overshadowed signs of weakening demand in China. Geopolitical tensions, particularly in the Middle East and Europe, further supported crude prices. In China, refinery output dropped by 3.7% in June year-on-year due to planned maintenance, lower processing margins, and subdued fuel demand. On the supply side, geopolitical instability added to the market dynamics. Houthi fighters in Yemen targeted three vessels, including an oil tanker, in the Red and Mediterranean seas, increasing shipping risks. Although the crisis has not impacted supply directly, attacks on ships have forced vessels to take longer routes, keeping oil in transit longer. China's crude oil imports in June decreased by 11% compared to a high base a year earlier, with arrivals at 46.45 million metric tons, or about 11.3 million barrels per day. In the U.S., crude oil inventories fell by 4.87 million barrels in the week ending July 12, 2024, marking the third consecutive week of declines and the longest stretch of stockpile reductions since September. This exceeded market predictions of a 0.8 million barrel increase. Crude stocks at the Cushing, Oklahoma hub decreased by 875 thousand barrels. However, gasoline stocks rose by 3.328 million barrels, and distillate stockpiles increased by 3.454 million barrels, contrary to expectations. Technically, the crude oil market is experiencing fresh buying, with a 28.7% increase in open interest, settling at 7,386 as prices rose by 132 INR. Crude oil is currently supported at 6,814 INR, with a potential test of 6,718 INR if it falls below this level. Resistance is anticipated at 6,965 INR, with a move above this level potentially driving prices to test 7,020 INR.
 

Trading Ideas:
* Crudeoil trading range for the day is 6718-7020.
* Crude oil gains amid a decline in U.S. oil stockpiles and a weaker dollar.
* Crude oil inventories in the US fell by 4.87 million barrels
* China's refinery output fell 3.7% in June from a year earlier official data showed
 
 
 Naturalgas
Natural gas prices fell sharply by 6.58%, settling at 170.5 INR. This decline was driven by forecasts for less hot weather over the next two weeks, which reduced the anticipated demand for cooling. Additionally, a drop in feedgas to liquefied natural gas (LNG) export plants, primarily due to the shutdown of Freeport LNG in Texas because of Hurricane Beryl, contributed to the price drop. The market is also weighed down by an oversupply of gas in storage, which remains above normal for this time of year. Gas output in the Lower 48 U.S. states rose to an average of 102.1 billion cubic feet per day (bcfd) in July, up from 100.2 bcfd in June. Meteorologists project that weather across the Lower 48 states will remain mostly near normal through July 24 before turning hotter than normal until at least August 1. In terms of storage, U.S. utilities added 65 billion cubic feet (Bcf) of gas into storage during the week ending July 5, 2024, surpassing market expectations of a 56 Bcf increase. This marked the 13th week of the seasonal increase in storage, raising stockpiles to 3,199 Bcf. This level is 283 Bcf higher than the same time last year and 504 Bcf above the five-year average of 2,695 Bcf, keeping total working gas above the five-year historical range. Technically, the natural gas market is under fresh selling pressure, with a 3.13% increase in open interest settling at 38,275 while prices fell by 12 INR. Natural gas is currently supported at 165.4 INR, with a potential test of 160.4 INR if it falls below this level. Resistance is likely at 180.1 INR, with a move above this level potentially driving prices to test 189.8 INR.
 

Trading Ideas:
* Naturalgas trading range for the day is 160.4-189.8.
* Natural gas eased on forecasts for less hot weather over the next two weeks than previously expected.
* Prices were also weighed down by the persistent oversupply of gas still in storage versus normal for this time of year.
* Gas output in the Lower 48 U.S. states rose to an average of 102.1 bcfd so far in July.
 
 
Copper
Copper prices declined by 0.76%, settling at 840.4 INR, driven by weak economic data from China and rising inventories in global warehouses. China’s economy grew slower than expected in the second quarter, suggesting weak demand since China consumes around half of the world's copper. Copper inventories increased in LME-approved warehouses, Comex warehouses, bonded warehouses in China, and warehouses designated by the Shanghai International Energy Exchange, further pointing to weak demand. Speculative interest in copper improved, with fund managers holding a net long position of 43,403 contracts on the CME copper contract as of July 8, marking the first increase since May 20 when copper hit record high prices. China's refined copper production in June rose by 3.6% from the previous year to 1.13 million metric tons, with an average daily output of 37,667 tons. The global refined copper market showed a 13,000 metric ton surplus in April, compared to a 123,000 metric ton surplus in March, according to the International Copper Study Group (ICSG). For the first four months of the year, the market had a 299,000 metric ton surplus, compared to a 175,000 metric ton surplus during the same period the previous year. China's unwrought copper imports in June fell to a 14-month low, with imports totaling 436,000 metric tons, down 3% from the previous year and marking a 15% drop from the prior month. Technically, the copper market is experiencing fresh selling, with a gain in open interest by 11.01% to settle at 9,285 as prices fell by 6.4 INR. Copper is currently supported at 837.5 INR, with a potential test of 834.7 INR if it falls below this level. Resistance is likely at 844.8 INR, with a move above potentially driving prices to test 849.3 INR.
 

Trading Ideas:
* Copper trading range for the day is 834.7-849.3.
* Copper prices fell weighed down by weak economic data from China and rising inventories.
* China's economy grew much slower than expected in the second quarter.
* Copper inventories global warehouses all increased so far in July, pointing to weak demand.
 
 
 Zinc
Zinc prices declined by 1.06%, settling at 267.05 INR, influenced by disappointing economic data from China, the world's largest consumer of the metal. China's refined zinc output in May 2024 increased to 536,200 metric tons, a rise of 31,600 metric tons or 6.26% month-on-month. Additionally, zinc inventory in the Shanghai Bonded Zone grew by 1,500 metric tons to 15,000 metric tons, despite the import window remaining closed. A notable development impacting the zinc market is the halt of operations at MMG Ltd's mill at the Dugald River zinc mine in Australia for approximately two months of repair work. This closure is expected to exacerbate the already tight zinc concentrates market, although MMG anticipates minimal impact on overall 2024 production. Expectations have risen that the Chinese government will announce support measures for the debt-ridden property market in its upcoming Third Plenum, which could boost construction activity, a key sector for zinc demand. Zinc inventories in London Metal Exchange (LME) warehouses increased by 9% to their highest level in nearly three months, indicating a surplus in the market. Despite this recent increase, LME zinc stocks had previously declined by 13% from their peak levels in late February. The global zinc market surplus fell to 22,100 metric tons in April from 70,100 metric tons in March, according to the International Lead and Zinc Study Group. Technically, the zinc market is experiencing long liquidation, with a 5.93% drop in open interest to settle at 2,078 as prices fell by 2.85 INR. Zinc currently finds support at 265.8 INR, with a potential test of 264.6 INR if it falls below this level. Resistance is anticipated at 269 INR, with a move above potentially driving prices to test 271 INR.
 

Trading Ideas:
* Zinc trading range for the day is 264.6-271.
* Zinc prices eased as disappointing economic numbers in China weighed on sentiment.
* 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.
 
 
Aluminum
Aluminum prices declined by 0.45%, settling at 222.5 INR, influenced by weak demand prospects in China, underscored by slow economic growth, weak lending numbers, and rising inventories. China’s economy grew by 4.7% in the second quarter, marking its slowest pace since the first quarter of 2023, and falling short of the 5.1% consensus forecast. Additionally, bank lending in China rose below expectations in June, highlighting subdued demand. China's production of primary aluminum in June increased by 6.2% year-on-year to 3.67 million metric tons, the highest single-month production on record since November 2014. This increase was driven by producers ramping up operations amid higher profits. The northern region of Inner Mongolia added new capacity, and the southwestern province of Yunnan resumed most of its production due to sufficient hydropower supply during the summer rainy season. Producers benefited from higher aluminum prices driven by fund investments in the base metals sector. The industry enjoyed an average profit margin of 3,152 yuan ($434.09) per ton last month, which is 27.5% higher compared to a year earlier, according to research house Antaike. In the first six months of the year, China produced 21.55 million tons of aluminum, reflecting a 6.9% increase from the same period last year. Technically, the aluminum market is experiencing long liquidation, with a 2.5% drop in open interest to settle at 3,081 contracts as prices fell by 1 INR. Aluminum is currently supported at 221.5 INR, with a potential test of 220.6 INR if it falls below this level. Resistance is anticipated at 223.9 INR, with a move above potentially driving prices to test 225.4 INR.
 

Trading Ideas:
* Aluminium trading range for the day is 220.6-225.4.
* Aluminium eased as weak demand prospects in China were emphasised by slow economic growth
* China June aluminium output climbs on higher profits
* China's economy grew 4.7% in the second quarter, its slowest since the first quarter of 2023.
 
 
 Cottoncandy
Cotton candy prices increased by 0.4% to settle at 57,640 INR, primarily due to a significant decline in the area under cotton cultivation in Punjab, Haryana, and Rajasthan. These states reported a total of 10.23 lakh hectares under cotton, down from last year's 16 lakh hectares. Punjab saw only 97,000 hectares of cotton, a sharp decline from the normal 7.58 lakh hectares seen in the 1980s and 1990s. Similarly, the area under cotton in Rajasthan decreased from 8.35 lakh hectares last year to 4.75 lakh hectares this year, and in Haryana, it went down from 5.75 lakh hectares to 4.50 lakh hectares in 2024. Support for cotton prices also came from delays in shipments from the US and Brazil, increasing demand for Indian cotton from mills in neighboring countries. The 2024/25 U.S. cotton projections indicate higher beginning and ending stocks compared to last month, with projected production, domestic use, and exports remaining unchanged. However, the season average upland farm price is down 4 cents from the May forecast to 70 cents per pound due to a decline in new-crop cotton futures. Ending stocks are 400,000 bales higher at 4.1 million, or 28% of use. Globally, the 2024/25 cotton balance sheet shows increases in beginning stocks, production, and consumption, with world trade unchanged. World ending stocks are projected 480,000 bales higher than in May at 83.5 million. Technically, the market is under short covering with open interest remaining unchanged at 358 contracts while prices increased by 230 INR. Cotton candy is currently supported at 57,380 INR, with potential testing of 57,130 INR if prices fall below this level. Resistance is anticipated at 57,840 INR, and a move above this level could see prices testing 58,050 INR.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57130-58050.
* Cotton gains as area under cotton in North India drops by 6 lakh hectares
* 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 increased by 1.61% to settle at 15,740 as farmers held back stocks, anticipating further price rises. Despite this upward trend, the potential for further gains was limited due to news of increased sowing. Farmers are expected to plant more turmeric across all producing states this year, driven by the fair prices they received for their crops. Turmeric sowing in Erode is reported to have doubled compared to last year, while Maharashtra, Telangana, and Andhra Pradesh are estimated to see a 30-35% increase in sowing. The previous year's low sowing and unfavorable weather resulted in an estimated production of 45-50 lakh bags of turmeric in 2024, with an outstanding stock of 35-38 lakh bags. Even with increased sowing this season, the upcoming crop is expected to be around 70-75 lakh bags, and the outstanding stock is projected to be zero. Turmeric exports during April-May 2024 decreased by 20.03% to 31,523.94 tonnes compared to 39,418.73 tonnes in the same period in 2023. However, exports in May 2024 increased by 23.43% to 17,414.84 tonnes from April 2024. Imports during April-May 2024 rose significantly by 417.74% to 14,637.55 tonnes compared to 1,387.29 tonnes in the same period in 2023. Imports in May 2024 showed a slight increase from April 2024 and a substantial rise compared to March 2023. Technically, the turmeric market is under short covering, with open interest dropping by 3.1% to 15,492, while prices rose by 250 rupees. Turmeric is currently supported at 15,554, with potential testing of 15,370 levels if it falls below. Resistance is anticipated at 15,860, and a move above this level could see prices testing 15,982.
 

Trading Ideas:
* Turmeric trading range for the day is 15370-15982.
* Turmeric gains 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 16551.7 Rupees dropped by -0.81 percent.
 
 
 Jeera
Jeera prices settled down by 0.21% at 26,675 due to expectations of higher production. However, the downside was limited due to strong domestic and export demand coupled with tight global supplies. Farmers are holding back their stocks, anticipating better prices, which has also supported the market. Globally, jeera production has significantly increased, with China leading the surge. China's cumin output soared to over 55-60 thousand tonnes from the previous 28-30 thousand tonnes. High prices last season incentivized increased production in Syria, Turkey, and Afghanistan, with new seeds expected in June and July. Turkey anticipates producing 12-15 thousand tonnes, while Afghanistan's output could double, weather permitting. As new supplies enter the market, cumin prices are likely to decline. The expectation of higher production could weigh on prices. This season, jeera production is likely to be 30% higher, with the sowing area in Gujarat and Rajasthan increasing significantly. In Gujarat, total production is estimated at 4.08 lakh tonnes, a new record, compared to 2.15 lakh tonnes last year. In Rajasthan, production increased by 53%. Overall, due to the increased sowing area and favorable weather, production has doubled compared to last year. Jeera exports during April-May 2024 rose by 43.50% to 58,943.84 tonnes compared to 41,076.27 tonnes in the same period in 2023. However, exports in May 2024 dropped by 44.99% from April 2024 and 15.64% compared to May 2023. Technically, the jeera market is under long liquidation, with open interest dropping by 2.19% to settle at 26,410 while prices fell by 55 rupees. Jeera currently finds support at 26,170, and a decline below this level could test 25,650. Resistance is anticipated at 27,040, with a move above this level potentially leading to prices testing 27,390.
 

Trading Ideas:
* Jeera trading range for the day is 25650-27390.
* 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 27119.2 Rupees gained by 0.33 percent.

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