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Gold

Yesterday, gold prices settled down by -0.53% at 71,089 as the dollar strengthened and investors awaited the Federal Reserve's preferred inflation gauge for insights into potential rate cuts. Fed Governor Michelle Bowman reiterated the stance of maintaining steady policy rates to control inflation, while expressing readiness to raise borrowing costs if necessary. U.S. consumer confidence eased in June, reflecting economic concerns, but optimism about the labor market and expectations of moderating inflation remained. China's net gold imports via Hong Kong dropped by about 22.7% in May compared to April, indicating reduced demand in the world's top gold consumer. Swiss gold exports also decreased in May, largely due to reduced shipments to India and Hong Kong. These countries, significant gold consumers, showed a sensitivity to high gold prices, impacting overall demand. In India, retail purchases slowed as prices neared record highs, with dealers offering discounts to entice buyers. In China, dealers maintained premiums, though demand is expected to remain subdued during the typically slow summer months. Technically, the gold market is under fresh selling pressure, with a 1.69% increase in open interest to 14,405 as prices dropped by -378 rupees. Gold is currently supported at 70,810, and a break below this level could lead to a test of 70,525. On the upside, resistance is seen at 71,450, and a move above this level could see prices testing 71,805. The ongoing cautious sentiment, influenced by currency movements and central bank policies, continues to impact gold's price trajectory.
 

Trading Ideas:
* Gold trading range for the day is 70525-71805.
* Gold prices fell as the dollar firmed ahead of inflation data
* Fed's Bowman reiterates holding rates steady 'for some time'
* China's May net gold imports via Hong Kong down about 23% from April

Silver
Silver prices settled up by 0.03% at 86,965 as investors weighed the cautious comments from Federal Reserve officials, who signaled a reluctance to cut interest rates due to persistently high inflation. Fed Governor Lisa Cook mentioned that rate cuts might be appropriate "at some point," but maintained that keeping rates steady is currently the right approach. Fed Governor Michelle Bowman echoed this sentiment, stating that interest rate cuts are not yet appropriate, and emphasized the need for inflation data to move more sustainably towards the Fed’s 2.0% target before considering policy easing. San Francisco Fed President Mary Daly also noted the importance of not cutting rates prematurely, although she highlighted the need to balance inflation control with labor market health. India's silver imports have surged in the first four months of 2024, surpassing the total for all of 2023. This increase is driven by rising demand from the solar panel industry and investor expectations of silver outperforming gold. India, the world's largest silver consumer, imported a record 4,172 metric tons of silver from January to April, significantly up from 455 tons in the same period last year. Notably, nearly half of these imports came from the United Arab Emirates, leveraging lower import duties. Technically, the silver market is experiencing short covering, with a significant drop in open interest by 21.58% to settle at 12,088 contracts, while prices rose by 28 rupees. Silver is currently finding support at 86,295, and a decline below this level could test 85,620. Resistance is expected at 87,505, and a move above this level could see prices testing 88,040.
 

Trading Ideas:
* Silver trading range for the day is 85620-88040.
* Silver settled flat after several Fed officials voice their reluctance to cut interest rates yet.
* The market continues to see a high probability of a cut in September.
* Fed’s Cook said that “at some point, it will be appropriate to cut rates,”


Crudeoil
Yesterday, crude oil prices increased by 0.5%, settling at 6,805 amid expectations of robust demand during the U.S. summer driving season and potential disruptions in global oil supply due to Middle East tensions. However, the rise was tempered by declining U.S. consumer confidence, raising concerns about the economic outlook, and a stronger U.S. dollar following hawkish comments 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. Additionally, the Energy Information Administration (EIA) reported that U.S. crude stocks and gasoline inventories increased, while distillate inventories fell for the week ending June 21. Crude inventories rose by 3.6 million barrels to 460.7 million barrels, against expectations of a 2.9 million-barrel draw. Stocks at the Cushing, Oklahoma hub decreased by 226,000 barrels. Refinery crude runs and utilization rates both declined, while gasoline stocks increased by 2.7 million barrels to 233.9 million barrels, and distillate stockpiles fell by 0.4 million barrels to 121.3 million barrels. Technically, the crude oil market experienced fresh buying interest, with open interest rising by 8.11% to settle at 4,879, while prices climbed by 34 rupees. Crude oil is currently supported at 6,732, with a potential test of 6,658 if this support level fails. Resistance is anticipated at 6,854, and a move above this level could lead to prices testing 6,902.
 

Trading Ideas:
* Crudeoil trading range for the day is 6658-6902.
* Crude oil gains amid expectations of strong demand in the summer driving season in the U.S
* U.S. crude stocks and gasoline inventories rose while distillate inventories fell
* Crude stocks at the Cushing, Oklahoma, delivery hub fell by 226,000 barrels in the week, the EIA said.


Naturalgas
Natural gas prices settled down by 3.95% at 231.2 as signs of increasing production and high storage levels pressured the market. Despite the forecast of a severe heat wave across much of the United States through mid-July, which would typically boost demand for natural gas to power air conditioning, prices fell. This decline occurred even as power generators continue to burn significant amounts of gas to meet the cooling needs. According to financial firm LSEG, gas output in the Lower 48 U.S. states has increased to an average of 98.5 billion cubic feet per day (bcfd) in June, up from a 25-month low of 98.1 bcfd in May, though still below the record high of 105.5 bcfd set in December 2023. Meteorologists predict that the weather will remain hotter than normal across the Lower 48 states through at least July 11, sustaining high demand for gas. Meanwhile, gas flows to the seven major U.S. LNG export plants have slightly decreased to 12.8 bcfd in June from 12.9 bcfd in May, with a record high of 14.7 bcfd in December 2023. This increase brought total stockpiles to 2,974 Bcf, which is 364 Bcf higher than last year and 573 Bcf above the five-year average of 2,401 Bcf, keeping the total working gas above the five-year historical range. Technically, the market is experiencing fresh selling pressure, with a 25.62% increase in open interest to 20,092 contracts while prices fell by 9.5 rupees. Natural gas is currently finding support at 228, and a drop below this level could test 224.9. Resistance is expected at 236.9, and a move above this level could see prices testing 242.7.
 

Trading Ideas:
* Naturalgas trading range for the day is 224.9-242.7.
* Natural gas fell on signs producers were slowly boosting output to meet rising summer demand.
*  Speculators increased net long futures and options positions on the New York Mercantile and Intercontinental Exchanges.
* Gas output in Lower 48 U.S. states rose to an average of 98.5 billion cubic feet per day in June.


Copper
Yesterday, copper prices settled up by 0.23% at 840.8, driven by short covering despite the backdrop of uncertain global demand and rising inventories. Recent PMI reports indicate a poor manufacturing outlook in major economies, compounded by signs of slowing industrial demand in top consumer China. Chinese copper inventories remained near their highest levels since 2020 in June, despite expectations of a seasonal drawdown. This is attributed to robust domestic production from higher smelted output from scrap. Consequently, the price of deliveries from Shanghai bonded warehouses has been at a discount to the LME for over a month. Shanghai Futures Exchange copper inventories fell last week but still stand at 322,910 tons, significantly higher than the 30,000 tons recorded in January. Meanwhile, stocks in LME-approved warehouses have surged over 60% to 167,825 tons since mid-May, primarily due to deliveries from China. This ample supply has led to a record discount for cash copper against the three-month contract, currently around $135 a ton. Adding to the concerns for industrial metals is the growing trend of protectionism, such as the EU's plans to impose tariffs on Chinese-made electric vehicles. The International Copper Study Group (ICSG) reported a global refined copper market surplus of 13,000 metric tons in April, down from 123,000 metric tons in March. China's unwrought copper imports in May rose 15.8% year-on-year, beating market expectations despite weak physical consumption. Technically, the copper market is under fresh buying pressure, with a 0.83% increase in open interest to 9,244 as prices rose by 1.9 rupees. Copper is currently supported at 836.1, with a potential test of 831.4 if this support level fails. Resistance is anticipated at 844.7, and a move above this level could see prices testing 848.6.
 

Trading Ideas:
* Copper trading range for the day is 831.4-848.6.
* Copper gains on short covering after prices dropped amid an uncertain global demand outlook and rising inventories.
* Chinese copper inventories also held near their highest since 2020 in June
* The latest PMI reports have so far pointed to a poor outlook for manufacturing in major economies


Zinc
Zinc prices surged by 2.67% to settle at 265.25, buoyed by expectations of increased demand in China amidst recent price declines and supply constraints. Concerns over industrial output in China, which slowed more than anticipated in May, compounded by contractionary manufacturing PMI figures, highlighted subdued industrial demand in the world's largest consumer of copper. However, sentiment improved following the People's Bank of China's reaffirmation of its supportive monetary policy stance and commitment to stabilizing the exchange rate. China's zinc concentrate imports dropped by 24% 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, underscoring challenges for Chinese smelters to cover processing costs, thereby increasing reliance on domestic zinc sources. Globally, zinc production has faced setbacks, declining by 2% in 2022 and another 1% in 2023, with no recovery evident in the first quarter of this year according to the ILZSG. This supply squeeze has been exacerbated by the restart of idled smelter capacity in Europe, reducing concentrate availability on the spot market. On the LME, zinc stocks rebounded significantly in 2023 and have continued to rise in 2024, reaching 255,900 tons. Despite fluctuations due to warehouse arbitrage activities, LME stocks have largely remained within a range of 250,000-260,000 tons since April. Technically, the zinc market saw fresh buying interest with a 6.65% increase in open interest to 2,420 contracts while prices rose by 6.9 rupees. Currently, zinc is supported at 260.4, and a drop below this level could test 255.6. Resistance is expected at 267.9, and a move above could see prices testing 270.6.
 

Trading Ideas:
* Zinc trading range for the day is 255.6-270.6.
* 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
Yesterday, aluminium prices settled up by 0.66% at 229.8, buoyed by China's reaffirmed commitment to a supportive monetary policy aimed at bolstering economic stability. Inventories in Shanghai Futures Exchange-monitored warehouses increased by 2.0% from the previous week, reflecting ongoing market dynamics. In the US, the Manufacturing PMI rose to a three-month high of 51.7 in June 2024, surpassing expectations, indicating moderate expansion in the sector. China opted to keep its key lending rates unchanged as efforts to ease monetary policy face constraints from narrowing interest rate margins and a depreciating currency. Global primary aluminium output increased by 3.4% year-on-year to 6.1 million tons in May, with China alone producing 3.65 million tonnes, up 7.2% from last year. From January to May, China's aluminium production totaled 17.89 million tonnes, marking a 7.1% rise compared to the same period in 2023. In May, China's aluminium imports surged by 61.1% year-on-year, reaching 310,000 metric tons, largely driven by increased shipments from Russia amidst Western sanctions. Russia significantly boosted its aluminium exports to China following bans imposed by the US and UK on Russian metals from sanctioned sources. Notably, China imported 500,741 tons of primary aluminium from Russia in the first four months of 2024, a substantial increase from the previous year. Technically, the aluminium market experienced fresh buying interest with a marginal 0.05% increase in open interest to 4,371, alongside a price rise of 1.5 rupees. Currently, aluminium is supported at 228.3, with a potential downside test of 226.7. Resistance is anticipated at 230.8, and a breakthrough could lead prices to test 231.7.
 

Trading Ideas:
* Aluminium trading range for the day is 226.7-231.7.
* Aluminium gains as the China’s central bank reiterated its commitment to a supportive monetary policy 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
Cotton prices, represented by Cottoncandy, edged up by 0.12% to settle at 58,960 amidst a delay in shipments from major producers like the US and Brazil, stimulating demand for Indian cotton from mills in neighboring countries. The firm trend in cottonseed prices further supported natural fiber prices, despite ongoing sowing activities for the kharif 2024 season in states like Karnataka, Telangana, and Andhra Pradesh, benefiting from early monsoon rains. In India, shifts in agricultural dynamics are anticipated: Telangana may see increased cotton acreage as some chili farmers pivot to cotton due to weak prices in the spice crop. Conversely, North India faces challenges with a potential 25% decrease in cotton acreage due to pest issues and rising labor costs, impacting early plantings. Internationally, the US cotton projections for 2024/25 indicate higher beginning and ending stocks, despite unchanged production, domestic use, and exports. The forecasted farm price decreased to 70 cents per pound, influenced by declines in new-crop cotton futures. Global cotton balance sheets for 2024/25 show increased beginning stocks, production, and consumption, with higher world ending stocks projected at 83.5 million bales, reflecting adjustments in trade dynamics and regional consumption trends. In the spot market at Rajkot, a significant trading hub, cotton prices closed higher at 27,368.65 Rupees, marking a 0.42% increase, highlighting local market dynamics and price trends. Technically, Cottoncandy observed fresh buying interest with a 1.94% rise in open interest to 368 contracts, alongside a price increase of 70 rupees. Current support levels for Cottoncandy are identified at 58,570, with a potential downside test towards 58,190. Resistance is anticipated at 59,490, and a breakout above this level could push prices towards 60,030.
 

Trading Ideas:
* Cottoncandy trading range for the day is 58190-60030.
* Cotton prices gained 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 closed higher by 0.59% at 17512 yesterday, driven by farmer withholdings amid expectations of further price increases. However, upside potential remains limited due to increased supplies towards the end of the harvesting season. The current heat wave across India poses a significant risk to crop yields, exacerbating the supply crunch and supporting price levels. The India Meteorological Department's forecast of prolonged heat waves indicates little relief in the near term, with below-normal rainfall in southern India further straining agricultural conditions. The Ministry of Agriculture and Farmers’ Welfare's estimate for 2023-24 projects turmeric production at 10.74 lakh tonnes, down from 11.30 lakh tonnes the previous year, reflecting a reduction in output. This decline, coupled with demand destruction amid higher prices, has led to a cautious market sentiment. Regions like Sangli, Basmat, and Hingoli are experiencing robust demand for quality turmeric, driven by expectations of increased sowing in the current year. On the trade front, April 2024 saw a decline in turmeric exports to 14,109.09 tonnes from 17,432.83 tonnes in March 2024 and a sharper drop from 19,590.87 tonnes in April 2023, indicating reduced international demand. Conversely, imports surged in April 2024 to 3,588.11 tonnes from 1,227.28 tonnes in March 2024 and 535.29 tonnes in April 2023, reflecting increased domestic demand to meet supply shortfalls. In the spot market, Nizamabad closed at 17920.1 Rupees, down by -0.15% from previous levels, highlighting localized price dynamics. Technically, the turmeric market witnessed short covering with a 1.38% decrease in open interest to 21,135 contracts, coupled with a price increase of 102 rupees. Current support levels for turmeric are at 17326, with potential downside testing towards 17138. Resistance is identified at 17646, and a breakout above could propel prices towards 17778.
 

Trading Ideas:
* Turmeric trading range for the day is 17138-17778.
* Turmeric prices gained as farmers are holding back stocks.
* The current heat wave could severely damage the crop yield, further contributing to the supply crunch.
* The Ministry of Agriculture first advance estimate for turmeric production in 2023-24 is estimated at 10.74 lakh tonnes
* In Nizamabad, a major spot market, the price ended at 17920.1 Rupees dropped by -0.15 percent.


Jeera
Jeera prices experienced a decline of 1.74% to settle at 29,105, driven by expectations of higher production which could potentially weigh on market prices. However, the downside was limited by robust domestic and export demand amidst tight global supplies. Farmers withholding stocks in anticipation of better prices also provided support to prices in the face of increased production forecasts for the season. It is projected that jeera production could rise by 30% this season to reach between 8.5 to 9 lakh tonnes, fueled by significant expansions in cultivation areas in Gujarat and Rajasthan. Globally, the surge in cumin production is notable, with China alone doubling its output to 55-60 thousand tons from previous levels. Similar trends are observed in Turkey and Afghanistan, driven by favorable weather conditions and incentivized by high prices in recent seasons. As these new supplies enter the market, pressure on cumin prices is expected to intensify. Reduced export activity in cumin further contributes to the downward pressure on prices, reflecting shifting dynamics in the global cumin market. In India, particularly in Gujarat and Rajasthan, the increase in sowing areas by substantial percentages indicates bullish production expectations. Gujarat, for instance, expects a record production of 4.08 lakh tonnes, significantly higher than previous years, highlighting the robust growth in the domestic supply. On the technical front, the jeera market witnessed fresh selling with a marginal increase in open interest by 0.11% to settle at 2,775 contracts, coupled with a significant price decline of 515 rupees. Currently, jeera finds support levels at 28,880, with potential further downside towards 28,640. Resistance is anticipated at 29,460, and a breakout above this level could push prices towards 29,800.
 

Trading Ideas:
* Jeera trading range for the day is 28640-29800.
* Jeera dropped as the expectation of higher production could weigh 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 29522.1 Rupees dropped by -0.74 percent.

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