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Gold

Yesterday, gold prices settled up by 0.29% at 71,791, driven by easing U.S. Treasury yields and investor anticipation of key inflation data later this week, which could influence the Federal Reserve's interest rate decisions. U.S. business activity in June reached a 26-month high, though price pressures have significantly subsided. Geopolitical tensions also played a role, with an Israeli airstrike near Gaza City resulting in eight Palestinian casualties. The services sector led the economic upswing, though manufacturing's recent growth momentum slowed. The Federal Reserve's cautious stance on rate cuts contrasts with the European Central Bank (ECB), Swiss National Bank (SNB), and Bank of Canada (BOC), which have already started to lower rates. The Bank of England is also poised to reduce borrowing costs soon, while the Bank of Japan is expected to raise rates. In the Euro zone, business growth sharply decelerated this month, as falling demand affected both the services and manufacturing sectors. Meanwhile, gold imports to China via Hong Kong dropped by 38% in April compared to the previous month, reflecting a shift from the high consumption seen in the first quarter of the year. China's gold consumption in the first three months of the year rose by 5.94% year-on-year, totaling 308.91 metric tons. In China, dealers charged premiums of $18-$25 per ounce, similar to the previous week, but demand is expected to remain subdued during the summer months. Technically, the market experienced short covering with a 0.97% drop in open interest, settling at 14,358 contracts while prices rose by 207 rupees. Gold is currently supported at 71,590, with potential to test 71,395 levels if support breaks. Resistance is likely at 71,920, and a move above this level could see prices testing 72,055.
 

Trading Ideas:
* Gold trading range for the day is 71395-72055.
* Gold prices edged up as U.S. Treasury yields eased
* Investors awaited inflation reading due later this week that could influence Fed’s interest rate trajectory.
* U.S. business activity crept up to a 26-month high in June but price pressures subsided considerably.


Silver
Silver settled down by -0.16% at 88999 as investors awaited crucial U.S. economic reports that could provide insights into the Federal Reserve's interest rate timeline. Easing bond yields highlighted market anticipation of key inflation data and Fed commentary this week. The U.S. Commerce Department's upcoming report on personal income and spending, which includes the Fed's preferred inflation readings, is particularly significant. Additionally, reports on new home sales, consumer confidence, durable goods orders, and pending home sales are poised to capture investor attention, following indications of a slowing U.S. economy without recession. The final GDP data for Q1 2024, due on Thursday, could also influence Fed policy if it indicates robust economic performance. Notable Fed speakers this week include San Francisco Fed President Mary Daly and Fed Governors Lisa Cook and Michelle Bowman. Geopolitical events such as the first U.S. presidential debate and the French election campaign commencement are also in focus. India's silver imports surged in the first four months of 2024, surpassing the total imports for all of 2023, driven by rising demand from the solar panel industry and investor speculation on silver's potential outperformance relative to gold. India imported a record 4,172 metric tons of silver from January to April, a significant increase from 455 tons during the same period last year, with nearly half of the imports originating from the UAE to benefit from lower import duties. Technically, the silver market is undergoing long liquidation, evidenced by a 2.81% drop in open interest, settling at 16,058 as prices declined by 140 rupees. Silver currently has support at 88665, with a potential test of 88330 levels, while resistance is likely at 89395, with a possible move towards 89790. These technical factors suggest cautious trading ahead.
 

Trading Ideas:
* Silver trading range for the day is 88330-89790.
* Silver settled flat as investors await US economic reports for clarity on the Fed’s timeline for interest rate cuts.
* US Manufacturing PMI rose to a three-month high of 51.7 in June 2024 from 51.3 in May
* US Services PMI rose to 55.1 in June of 2024 from 54.8 in the earlier month


Crude oil
Yesterday, crude oil prices settled up by 1.13% at 6,822 as traders balanced expectations of increased summer demand and geopolitical tensions against a stronger dollar. The escalation of geopolitical tensions in the Middle East further heightened concerns about oil supply. Israeli forces advanced into Rafah in the Gaza Strip, and fears of an "all-out war" with Hezbollah in Lebanon were expressed by a senior Israeli official. Oil prices have also been supported by robust global demand growth forecasts. Key organizations like OPEC, the International Energy Agency (IEA), and the U.S. Energy Information Administration (EIA) predict strong oil demand growth in the second half of this year. Additionally, OPEC+ members such as Russia and Iraq have reaffirmed their commitment to production quotas, with Saudi Arabia signaling a willingness to adjust output based on market conditions. Investor sentiment has improved since OPEC+ announced plans to increase production starting in October, driven by expectations of stronger future demand. Data from the U.S. Energy Information Administration (EIA) showed a significant rise in total product supplied, increasing by 1.9 million barrels per day to 21.1 million bpd in the week ending June 14. U.S. crude oil stocks fell by 2.547 million barrels, exceeding market expectations of a 2 million barrels decline. However, crude stocks at the Cushing, Oklahoma delivery hub increased by 0.307 million barrels. Technically, the market is experiencing fresh buying, with a 10.4% gain in open interest settling at 4,935 contracts, while prices rose by 76 rupees. Crude oil is finding support at 6,739, with potential to test 6,655 levels if this support fails. Resistance is likely at 6,868, and a move above this level could see prices testing 6,913.
Trading Ideas:
* Crudeoil trading range for the day is 6655-6913.
* Crude oil firmed as traders balanced expectations of increased summer demand and geopolitical tensions
* U.S. crude and gasoline inventories fall
* U.S. oil demand on the rise as summer begins


Natural gas
Natural gas prices rose by 2.08% to settle at 230.6, driven by forecasts of hotter-than-expected weather and increased cooling demand. However, the upside was limited as producers ramped up output to meet the heightened demand from power generators. The gas output in the Lower 48 U.S. states averaged 98.4 billion cubic feet per day (bcfd) in June, up from a 25-month low of 98.1 bcfd in May. This is still below the record high of 105.5 bcfd in December 2023, though output hit a 10-week high of 99.6 bcfd on Sunday. In June, companies like EQT and Chesapeake Energy began boosting their output, though overall U.S. gas production remains down by around 7% in 2024 due to delayed well completions and reduced drilling activities after prices hit a 3.5-year low earlier in the year. Meteorologists predict that weather across the Lower 48 states will remain hotter than normal through at least July 9, although the heat is expected to be less intense than previously forecast. Consequently, LSEG forecasts a decline in average gas demand from 104.5 bcfd this week to 102.3 bcfd next week. In storage dynamics, U.S. utilities added 74 billion cubic feet of gas into storage for the week ending June 7, 2024, slightly below market expectations of a 75 billion cubic feet increase. Technically, the market is experiencing short covering, indicated by a 9.03% drop in open interest, settling at 4,642 as prices rose by 4.7 rupees. Natural gas finds support at 223.8, with a potential test of 217 levels, while resistance is anticipated at 234.8, with a possible move towards 239. These technical indicators suggest a cautiously optimistic outlook in the near term.
 

Trading Ideas:
* Naturalgas trading range for the day is 217-239.
* Natural gas increased due to forecasts of hot weather and cooling demand.
* However, upside seen limited as producers ramp up output to meet increased demand
* Gas output in Lower 48 states rose to an average of 98.4 bcfd in June, up from a 25-month low in May.


Copper
Copper prices closed slightly lower by -0.24% at 847.85 yesterday amidst significant activity in warehouse deliveries approved by the London Metal Exchange (LME). Inventories monitored by the Shanghai Futures Exchange saw a decrease last week but remain elevated at 322,910 tons, reflecting ongoing supply concerns despite the reduction. Conversely, LME-approved warehouse stocks surged over 60% since mid-May to 167,825 tons, driven largely by deliveries from China to Asian warehouses. This influx has contributed to a record cash copper discount against the three-month contract, currently around $135 per ton. The industrial metals sector faces additional pressures from rising protectionism, such as the European Union's plans for tariffs on Chinese-made electric vehicles. However, China's increased imports of copper scrap indicate efforts to secure alternative sources amid scarce copper ore supplies. The country's monetary policy remains supportive, with the People's Bank of China (PBOC) emphasizing flexibility in using tools like interest rates and reserve requirements. In terms of production and consumption, China's refined copper output in May showed a modest 0.6% year-on-year increase, while imports of unwrought copper rose unexpectedly by 15.8% from a year earlier in May, surpassing market expectations. This surge in imports contrasts with weaker physical consumption due to high copper prices. Technically, the copper market saw fresh selling pressure with a notable 21.61% increase in open interest, settling at 8,491 contracts, as prices declined by -2.05 rupees. Currently, copper finds support at 845.3, with potential downside testing to 842.7. Resistance is likely at 851.4, and a break above could push prices towards 854.9.
 

Trading Ideas:
* Copper trading range for the day is 842.7-854.9.
* Copper dropped amid a significant upturn in LME stocks.
* SHFE inventories stand at 322,910 tons compared with about 30,000 tons in January
* China's imports of copper scrap have increased significantly in the search for alternative to scarce copper ore


Zinc
Zinc prices settled marginally lower by -0.06% at 257.35 amid concerns over weakening industrial demand, particularly highlighted by a slowdown in China's industrial output in May. This downturn follows a contraction in China's official manufacturing PMI, signaling subdued demand in the world's largest consumer of base metals. Despite these challenges, downward pressure on zinc prices was tempered by expectations of a demand recovery in China due to recent price declines and supportive monetary policies from the People's Bank of China, emphasizing continued monetary easing to stabilize the economy and prevent excessive currency depreciation. The zinc market is also grappling with supply-side constraints. Zinc concentrate imports into China have dropped significantly by 24% in the first four months of 2024 compared to the previous year, driven by a tightening raw materials market. Globally, zinc production has faced persistent declines, with output falling by 2% in 2022, another 1% in 2023, and continuing to slide by 3% year-on-year in the first quarter of 2024 according to the International Lead and Zinc Study Group (ILZSGOn the London Metal Exchange (LME), zinc stocks have seen a significant rebuild from 30,475 tons to 255,900 tons over 2023, marking a 15% increase since the beginning of 2024. Despite fluctuations due to warehouse arbitrage activities, registered inventory has mostly held within a range of 250,000-260,000 tons since April. Technically, the zinc market is witnessing fresh selling pressure, indicated by a 7.66% increase in open interest, settling at 2,234 contracts while prices declined marginally by -0.15 rupees. Support levels are identified at 255.7, with potential downside towards 253.9. Resistance is expected at 259.3, with a possible upward movement towards 261.1.
 

Trading Ideas:
* Zinc trading range for the day is 253.9-261.1.
* Zinc settled flat amid mounting evidence of low demand.
* 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
Aluminium prices closed lower by -0.35% at 229.3 yesterday, influenced by ongoing capital outflows in China amid disappointing macroeconomic data and a lack of robust policy support measures. Warehouse inventories monitored by the Shanghai Futures Exchange increased by 2.0% compared to the previous week, reflecting subdued demand sentiment in the world's largest consumer of commodities. In contrast, the US Manufacturing PMI rose to a three-month high of 51.7 in June, exceeding expectations, which provided a contrasting perspective on global industrial activity. However, China kept its key benchmark lending rates unchanged as efforts to stimulate the economy remain constrained by narrow interest rate margins and a weakening currency. Globally, primary aluminium production expanded by 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. China specifically saw a significant 7.2% increase in aluminium production to 3.65 million tonnes in May, contributing to a year-to-date production of 17.89 million tonnes, up 7.1% from the same period last year. Meanwhile, China's aluminium imports surged by 61.1% in May compared to a year earlier, driven by increased shipments from Russia amidst Western sanctions. Russia notably boosted its aluminium exports to China, responding to bans imposed by the US and Britain in April on certain Russian metals. Technically, the aluminium market witnessed fresh selling with a 5.71% rise in open interest to settle at 4,334 contracts, while prices declined by -0.8 rupees. Currently, aluminium finds support at 228.5, with potential downside to 227.6. Resistance is anticipated at 230.7, and a breakthrough could lead prices to test 232.
 

Trading Ideas:
* Aluminium trading range for the day is 227.6-232.
* Aluminium gains as sentiment was lifted by China's central bank's reinforcement of its easing monetary 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
Cottoncandy prices rose by 0.81% to settle at 58250, driven by delays in shipments from major producers like the US and Brazil, which increased demand for Indian cotton among mills in neighboring countries. This surge in demand, coupled with firm cottonseed prices, supported natural fiber prices despite the onset of sowing for the kharif 2024 season in southern states of India following monsoon rains. The cotton acreage outlook in India presents a mixed picture: while Telangana anticipates an increase in cotton planting due to shifts from other crops like chillies amidst weak prices, North India faces challenges such as pest infestations and rising labor costs, potentially reducing acreage by about a quarter. Internationally, the US cotton market projections for 2024/25 show higher beginning and ending stocks with unchanged production, domestic use, and exports. However, the season average upland farm price is down to 70 cents per pound due to declining new-crop cotton futures. Globally, the 2024/25 cotton balance sheet indicates increased beginning stocks, production, and consumption, with higher world ending stocks projected at 83.5 million bales. In Rajkot, a key spot market, cotton prices edged up marginally to 27001.25 Rupees, reflecting steady trading sentiment locally despite global market fluctuations. Technically, Cottoncandy market conditions suggest short covering, evidenced by a 2.43% drop in open interest to settle at 362 contracts while prices increased by 470 rupees. Support levels are identified at 57940, potentially testing 57620 on the downside, while resistance is expected at 58440, with a potential breakout towards 58620. Market participants will closely monitor weather patterns, crop progress, and international trade dynamics to gauge future price movements amidst evolving demand and supply conditions.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57620-58620.
* 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 retreated by -0.82% to settle at 17232, driven by profit booking following earlier gains fueled by farmers withholding stocks in anticipation of higher prices. However, the upside was capped as supplies increased towards the end of the harvesting season. The prevailing heat wave across India poses a threat to crop yields, potentially exacerbating the supply shortage and supporting prices. The India Meteorological Department's forecast of continued heat wave conditions suggests minimal relief in the near term, with southern India experiencing significantly reduced rainfall in April. 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. This decline, coupled with demand destruction due to elevated prices, has impacted market dynamics. Regions like Sangli, Basmat, and Hingoli are witnessing robust demand for quality turmeric in anticipation of increased sowing areas in the current year. On the trade front, April 2024 saw a decrease in turmeric exports to 14,109.09 tonnes from 17,432.83 tonnes in March 2024 and a significant drop from 19,590.87 tonnes in April 2023. Conversely, imports surged in April 2024 to 3,588.11 tonnes from 1,227.28 tonnes in March 2024 and from 535.29 tonnes in April 2023, reflecting shifting global trade dynamics. In the major spot market of Nizamabad, turmeric prices closed at 17978.85 Rupees, marking a decrease of -0.42 percent. Technically, the turmeric market indicates long liquidation, with a 0.44% decrease in open interest to settle at 21355 contracts while prices declined by -142 rupees. Support levels are identified at 16888, potentially testing 16546 on the downside, while resistance is anticipated at 17486, with a breakout potentially targeting 17742.
 

Trading Ideas:
* Turmeric trading range for the day is 16546-17742.
* Turmeric dropped on profit booking after 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 17978.85 Rupees dropped by -0.42 percent.


Jeera
Jeera prices surged by 2.17% to settle at 29435 yesterday, driven by robust domestic and export demand amid tight global supplies. Farmers withholding stocks in anticipation of higher prices also contributed to the upward momentum. However, the upside potential remains constrained by expectations of increased production, with estimates suggesting a 30% rise in this season's production to 8.5-9 lakh tonnes, fueled by expanded cultivation areas in Gujarat and Rajasthan. Globally, cumin production has seen significant increases, particularly in China, where output has more than doubled. Similarly, Syria, Turkey, and Afghanistan are gearing up for higher production with new seeds expected to enter the market soon. These factors are expected to ease supply pressures and potentially dampen prices in the future. Reduced export trade in cumin has also added to the downward price pressure, reflecting evolving dynamics in the global market. Technically, the jeera market experienced short covering as open interest declined by -7.65% to settle at 2754 contracts, while prices surged by 625 rupees. Currently, jeera finds support at 28860, with a possible downside test to 28290. On the upside, resistance is expected at 30090, and a breakout above could lead prices towards 30750. The technical outlook suggests a cautious stance amidst volatile price movements influenced by supply expectations and market sentiment. Market participants will closely monitor production trends and export dynamics to gauge the trajectory of jeera prices going forward.
 

Trading Ideas:
* Jeera trading range for the day is 28290-30750.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* 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 29900.35 Rupees dropped by -0.14 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views.