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Gold

Gold prices surged by 0.95% yesterday, settling at 73051, driven by data from the US jobs report that bolstered expectations of imminent rate cuts by the Federal Reserve. This weakened the dollar and spurred broad increases in precious metals. The report highlighted sharp downward revisions for non-farm payroll counts in April and May, overshadowing a slight beat in expectations for June's results. Moreover, the unexpected uptick in the unemployment rate and a decline in wage growth to a three-year low pointed to a softening US labor market. In global economic trends, the conclusion of UK elections is expected to pave the way for rate cuts by the Bank of England, while the People's Bank of China (PBoC) is also anticipated to lower borrowing costs soon. However, gold imports into China via Hong Kong plummeted 38% in April compared to March, indicating a significant shift from the high consumption levels recorded in the first quarter of the year. In India, physical gold dealers continued to offer discounts for the ninth consecutive week due to high prices, as they await a potential import duty reduction in the upcoming budget. This slowdown in demand was also observed in China, where dealers adjusted premiums slightly amid weakening consumer interest. Technically, the gold market saw short-covering activity, with a 1.48% drop in open interest, settling at 13,773 contracts, while prices surged by 684 rupees. Currently, gold is supported at 72450, with potential for a test of 71855 if it breaks below this level. On the upside, resistance is likely at 73395, with a potential move towards 73745 if prices breach this level.
 

Trading Ideas:
* Gold trading range for the day is 71855-73745.
* Gold rose as data from US jobs report was the latest to bolster expectations of incoming rate cuts by Fed.
* The unemployment rate unexpectedly edged higher and wage growth fell to a three-year low.
* Physical gold dealers in India offered discounts for the ninth consecutive week due to high prices
 
 
 Silver
Silver prices surged by 1.73% yesterday, settling at 93554, driven by increasing expectations that the US Federal Reserve could initiate interest rate cuts as early as September. This sentiment was bolstered by softer-than-expected US economic data, coupled with remarks from Fed Chair Jerome Powell indicating a shift towards a disinflationary trend. The outlook for silver was further boosted by anticipated stronger demand from the renewable energy sector, where silver plays a crucial role due to its conductivity and application in photovoltaic cells for solar panels. In China, the economic outlook remains uncertain amid mixed data, with markets awaiting signals from the upcoming Third Plenum for potential stimulus measures. Federal Reserve Bank of New York President John Williams noted that the neutral interest rate, which balances the economy in the long run, has likely not risen significantly, underscoring ongoing concerns about economic growth and inflation dynamics. India's silver imports in the first four months of the year have already surpassed the total for all of 2023, driven by rising demand from the solar panel industry and investor interest in silver's potential outperformance compared to gold. Importantly, nearly half of India's silver imports this year came from the United Arab Emirates, taking advantage of lower import duties. Technically, the silver market saw fresh buying momentum, with a 6.46% increase in open interest, settling at 24,411 contracts, while prices surged by 1593 rupees. Currently, silver is supported at 91975, with a potential test of 90395 if it breaks below this level. On the upside, resistance is likely at 94660, with potential for prices to test 95765 upon breaching this level.
 

Trading Ideas:
* Silver trading range for the day is 90395-95765.
* Silver rose underpinned by rising odds that Fed could start cutting interest rates as early as September.
* Fed Chair Jerome Powell said that recent data indicated a shift to a disinflationary trend.
* Expected stronger demand for silver in renewable energy expansion.
 
 
 Crudeoil
Crude oil prices closed lower by -0.67% yesterday, settling at 6977, driven by various geopolitical and supply-side factors influencing the market dynamics. Despite robust summer fuel demand and potential supply disruptions from hurricanes in the Gulf of Mexico, the growing likelihood of a Gaza ceasefire tempered market sentiment. Additionally, developments such as Russian oil producers planning sharp cuts to oil exports from Novorossiisk and Suncor Energy's precautionary shutdown of its Firebag oil sands site in Alberta due to a wildfire added to market concerns. Hurricane Beryl, a Category 2 storm, made landfall in Mexico, impacting parts of the region and potentially affecting oil projects in U.S. waters if it continues its expected path. In terms of production, OPEC's oil output rose for the second consecutive month in June, driven by higher production from Nigeria and Iran, which offset voluntary supply cuts by other members of the OPEC+ alliance. On the inventory front, U.S. crude stocks saw a significant drawdown of 12.2 million barrels to 448.5 million barrels in the week ending June 28, surpassing expectations. However, stocks at the Cushing, Oklahoma hub rose slightly by 345,000 barrels. Gasoline inventories fell by 2.2 million barrels, while distillate stockpiles, including diesel and heating oil, decreased by 1.5 million barrels, both surpassing market forecasts. Technically, the crude oil market experienced long liquidation, with a notable 11.88% drop in open interest, settling at 6690 contracts, while prices declined by 47 rupees. Currently, crude oil finds support at 6942, with potential for a test of 6907 if it breaks below this level. Resistance is likely at 7032, with a possible move towards 7087 upon breaching this level.
 

Trading Ideas:
* Crudeoil trading range for the day is 6907-7087.
* Crude oil fell as the growing likelihood of a Gaza ceasefire overshadowed robust summer fuel demand
* Russian oil producers Rosneft and Lukoil will make sharp cuts to oil exports from the Black Sea port of Novorossiisk in July.
* Canadian oil producer Suncor Energy shut down its 215,000 barrel-per-day (bpd) Firebag oil sands site in northern Alberta.
 
 
 Naturalgas
Natural gas prices declined by -1.16% yesterday, settling at 195.6, influenced by increased output levels in July and persistent oversupply conditions in storage. Despite expectations of a smaller-than-usual weekly storage build and forecasts of a prolonged heat wave across the United States through mid-July, the market remained under pressure due to abundant supply dynamics. The U.S. Energy Information Administration (EIA) reported that utilities added 32 billion cubic feet (bcf) of gas into storage for the week ending June 28. However, this inventory build was overshadowed by the fact that gas stockpiles were approximately 19% above normal for this time of year, reflecting the ongoing oversupply situation in the market. Looking at production trends, gas output in the Lower 48 U.S. states increased to an average of 101.8 billion cubic feet per day (bcfd) so far in July, up from 100.2 bcfd in June. This rise comes after a period of reduced drilling activity earlier in the year when prices had dropped to 3-1/2-year lows. Despite this uptick, output remains below the monthly record high of 105.5 bcfd set in December 2023. Technically, the natural gas market experienced fresh selling pressure, with a 1.41% increase in open interest, settling at 34,408 contracts, while prices declined by -2.3 rupees. Currently, natural gas is supported at 193.2, with potential for a test of 190.8 if it breaks below this level. Resistance is expected at 199.7, with a possible move towards 203.8 upon breaking above this resistance level.
 

Trading Ideas:
* Naturalgas trading range for the day is 190.8-203.8.
* Natural gas dropped on a rise in output so far in July and the oversupply of gas still in storage.
* However downside seen limited as a bullish heat wave expected to linger through at least mid-July.
* EIA said utilities added 32 billion cubic feet (bcf) of gas into storage during the week ended June 28.
 
 
 Copper
Copper prices showed resilience yesterday, closing up by 0.82% at 875.25, buoyed by several supportive factors in the market. A weaker dollar, driven by expectations of U.S. rate cuts amidst soft economic data, provided a supportive backdrop for commodities including copper. Market optimism was further fueled by hopes that China, the world's largest consumer of copper, might announce stimulus measures during an upcoming political meeting in mid-July, which could potentially boost demand. Despite these bullish signals, copper price gains were capped by global macroeconomic concerns and sensitivity of physical demand, particularly around the $10,000 mark. The discount to import copper into China narrowed significantly, from $20 per ton in May to just $2 per ton, indicating improved demand conditions. Production updates from key mining companies also influenced market sentiment. Chilean copper giant Codelco reported a continued decline in output year-on-year for the first half of 2024, though production is expected to increase in the latter half of the year. the International Copper Study Group (ICSG) reported a surplus of 13,000 metric tons in the global refined copper market for April, down from 123,000 metric tons in March. This surplus, alongside steady output and consumption figures, underscored a balanced market with moderate inventory changes. Chinese import data provided mixed signals: unwrought copper imports rose by 15.8% year-on-year in May, surpassing market expectations despite weak physical consumption. Technically, copper experienced short covering as indicated by a drop in open interest by -5.84% alongside a price increase of 7.1 rupees. The current support levels for copper are identified at 867.3, with a potential downside to 859.3 if support is breached. On the upside, resistance is anticipated at 882.5, with a breakout above suggesting a test towards 889.7.
 

Trading Ideas:
* Copper trading range for the day is 859.3-889.7.
* Copper gains with support from a softer dollar, hopes of U.S. rate cuts.
* Support also seed amid stimulus measures and improving physical demand in China.
* Copper inventories in warehouses monitored by SHFE rose 0.7 % from last Friday.
 
 
 Zinc
Zinc prices closed slightly higher yesterday, up by 0.36% at 275.65, driven by significant developments both in supply disruptions and market sentiment surrounding Chinese economic stimulus measures. MMG Ltd's decision to halt operations at its Dugald River zinc mine in Australia for approximately two months due to repair work at a mill added a bullish tone to the market. This move is expected to tighten an already constrained zinc concentrates market, potentially exacerbating supply shortages in the near term. Investor focus also shifted to China, where expectations grew regarding forthcoming stimulus measures aimed at supporting the country's struggling property market. The Chinese government's initiatives are anticipated to bolster construction activity, a critical sector for achieving the targeted 5% economic growth this year. On the inventory front, zinc stocks in LME-registered warehouses saw a notable rebound, increasing by 9% to their highest level in nearly three months. This uptick suggests a surplus of zinc metal currently available in the market, contrasting with the tightening supply scenario caused by operational halts like MMG's Dugald River mine. According to the International Lead and Zinc Study Group (ILZSG), the global zinc market showed a surplus of 22,100 metric tons in April, down from 70,100 tons surplus in March. For the first four months of the year, the global surplus totaled 182,000 tons, a decrease from 282,000 tons during the same period last year. Technically, zinc experienced short covering as evidenced by a drop in open interest by -4.57% alongside a marginal price increase of 1 rupee. Current support levels for zinc are identified at 274.4, with a potential downside to 273.1 if support levels are breached. Resistance is now anticipated at 277.1, with a breakout above suggesting a test towards 278.5.
 

Trading Ideas:
* Zinc trading range for the day is 273.1-278.5.
* Zinc gains as MMG halts zinc concentrate output at Dugald River mine
* Investors assessed the impact that incoming stimulus from Beijing.
* LME zinc inventories rebounded 9% to their highest level in nearly three months.
 
 
 Aluminium
Aluminium prices closed higher yesterday, gaining 0.49% to settle at 234.05, buoyed by a mix of supply disruptions in key Chinese provinces and supportive monetary policies from China's central bank. The market sentiment was positively influenced by ongoing delays in the resumption of aluminium operating capacity in Yunnan, Sichuan, and Guizhou provinces, underscoring supply constraints. Additionally, China's central bank reiterated its commitment to maintaining a supportive monetary stance aimed at bolstering economic stability, which added further support to aluminium prices. However, the upside in aluminium was tempered by concerns over muted demand and signs of ample global supply. Despite the production disruptions in China, global primary aluminium output rose by 3.4% year-on-year to 6.1 million tons in May, as reported by the International Aluminium Institute. China, the world's largest aluminium producer, saw its production increase by 7.2% to 3.65 million tonnes in May compared to the previous year. For the first five months of the year, China's aluminium production totaled 17.89 million tonnes, up 7.1% year-on-year, highlighting robust production levels amid ongoing global economic uncertainties. On the demand side, China's aluminium imports surged by 61.1% year-on-year in May, reaching 310,000 metric tons, driven primarily by increased shipments from Russia. This spike in imports from Russia followed sanctions imposed by the US and Britain on Russian metals, leading to a redirection of Russian aluminium exports towards China. Technically, the aluminium market witnessed short covering, indicated by a decrease in open interest by -1.28% alongside a modest price increase of 1.15 rupees. Currently, aluminium is supported at 232.5, with potential downside to 231 if support levels are breached. Resistance is anticipated at 235.6, with a breakout above suggesting a test towards 237.2.
Trading Ideas:
* Aluminium trading range for the day is 231-237.2.
* Aluminium gains as aluminum operating capacity in Yunnan, Sichuan, and Guizhou still awaiting resumption.
* Support also seen as sentiment was lifted by China's central bank's reinforcement of its easing monetary stance.
* The China’s central bank reiterated its commitment to a supportive monetary policy stance to bolster economic stability.
 
 
 Cottoncandy
Cottoncandy prices experienced a slight decline of -0.33% yesterday, settling at 58240, driven by profit booking following earlier gains. The market initially rose due to delays in shipments from major exporters like the US and Brazil, which boosted demand for Indian cotton from neighboring mills. This demand surge was further supported by a firm trend in cottonseed prices. Despite the onset of monsoon rains in southern states like Karnataka, Telangana, and Andhra Pradesh, signaling the beginning of the kharif 2024 season, cotton acreage dynamics are mixed. While Telangana is expected to see an increase in cotton planting, driven partly by shifts from chilli cultivation due to weak prices, North India faces challenges such as increased pest infestation and rising labor costs, potentially leading to a decrease in cotton acreage. Internationally, the 2024/25 U.S. cotton projections show higher beginning and ending stocks compared to previous forecasts, with production, domestic use, and exports remaining unchanged. The average upland farm price is down slightly to 70 cents per pound, influenced by declines in new-crop cotton futures. Globally, the 2024/25 cotton balance sheet reflects increased beginning stocks, production, and consumption, maintaining world trade levels. However, ending stocks are projected higher by 480,000 bales compared to May estimates, totaling 83.5 million bales. Production increases are noted in Burma, contributing to a rise in global production, while consumption sees boosts in Vietnam and Burma offsetting reductions elsewhere. In the Rajkot spot market, cotton prices closed at 27704.4 Rupees, marking a -0.24% decline. Technically, the market observed long liquidation with unchanged open interest, indicating a cautious sentiment among traders. Currently, support for Cottoncandy is seen at 58000, and a breach below could test 57750 levels, while resistance stands at 58500. A breakout above this resistance could push prices towards 58750.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57750-58750.
* Cotton dropped on profit booking after 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 retreated by -1.87% yesterday, settling at 15856, primarily driven by reports of increased sowing activity across major producing states in India. Despite this decline, downside was limited as farmers are holding back stocks in anticipation of higher prices in the future. The optimism among growers stems from expectations of fair prices for their produce, which is encouraging higher sowing levels this year. Particularly notable is the significant increase in turmeric sowing along the Erode line, expected to double compared to last year, and substantial increases in Maharashtra, Telangana, and Andhra Pradesh, estimated at 30% to 35% higher than last year. Overall, turmeric cultivation is projected to expand from 3 to 3.25 lakh hectares last year to 3.75 to 4 lakh hectares this year. The weather conditions, which were unfavorable last year, further bolster expectations for a robust 2024 crop, estimated between 45 to 50 lakh bags. Additionally, the outstanding stock from previous years is expected to be cleared, leaving minimal carryover into the upcoming season. On the international front, turmeric exports showed a decline of 19.07% from March 2024 to April 2024, amounting to 14,109.09 tonnes, and a 27.98% decrease compared to April 2023. Conversely, imports surged by 192.36% from March 2024 to April 2024, reaching 3,588.11 tonnes, and rose significantly by 570.31% compared to April 2023. In the domestic spot market, Nizamabad reported turmeric prices ending at 17243.65 Rupees, marking a -0.96% decline. Technically, the turmeric market witnessed long liquidation with a decrease in open interest by -0.4%, coupled with a price decline of -302 rupees. Currently, turmeric finds support at 15674, with potential downside towards 15490 if this support level is breached. Resistance is expected at 16124, with a breakthrough potentially leading prices towards 16390.
 

Trading Ideas:
* Turmeric trading range for the day is 15490-16390.
* 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 17243.65 Rupees dropped by -0.96 percent.
 
 
 Jeera
Jeera prices settled lower by -0.38% yesterday, closing at 28510, primarily influenced by expectations of higher production in the upcoming season. The anticipation of increased production by 30% to 8.5-9 lakh tonnes has weighed on market sentiment, as farmers are holding back stocks in hopes of better prices. Despite this downward pressure, the market has seen limited downside due to robust domestic and export demand, coupled with tight global supplies. The surge in jeera production is notably driven by significant increases in cultivation areas in key producing states like Gujarat and Rajasthan. Gujarat alone has seen a remarkable 104% increase in sowing area, while Rajasthan witnessed a 16% rise. This expansion is expected to result in record production levels, with Gujarat estimating production to reach 4.08 lakh tonnes, a substantial increase from previous years. Globally, the cumin market dynamics are shifting with substantial increases in production seen in countries like China, Syria, Turkey, and Afghanistan. China's cumin output has more than doubled, which, along with increased production in other regions, is likely to lead to a decline in prices as new supplies enter the market. In terms of trade, jeera exports from India have shown a significant increase, with April 2024 exports reaching 38,026.96 tonnes, up by 133.55% from April 2023. This uptrend in exports reflects strong international demand despite the expected increase in production. Technically, the jeera market is currently witnessing fresh selling pressure, indicated by a notable increase of 16.06% in open interest alongside a decline of -110 rupees in prices. The support level for jeera is identified at 28310, and a breach below could test 28120 levels. On the upside, resistance is seen at 28680, and a breakout above this level could lead prices towards 28860.
Trading Ideas:
* Jeera trading range for the day is 28120-28860.
* 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 28666.15 Rupees dropped by -0.44 percent.

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