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Gold

Gold settled up by 0.8% at 69,178 as investors remained optimistic about potential signals from the U.S. Federal Reserve regarding lowering interest rates in September. Despite the robust U.S. labor market, with job openings still high at 8.18 million as of June, the momentum is slowing but not as sharply as anticipated. In India, gold premiums surged to a decade-high due to a government cut in import duties, which lowered prices to a near four-month low and spiked demand. Indian dealers charged a premium of up to $20 an ounce over official domestic prices, a significant change from last week's $65 discount, the highest in 28 months. In contrast, in China, dealers offered a $10 discount to a $2 premium an ounce, reflecting a stabilization near a two-year low. Singapore saw gold sold at a discount of $1 to a premium of $2.20 per ounce, and in Hong Kong, it was between a discount of $1 to a premium of $1.20 per ounce. Japanese dealers sold gold at a $3 discount due to higher prices driven by overseas ETF inflows. India's gold demand in the June quarter fell by 5% year-on-year, but consumption is expected to improve in the second half of 2024. The reduction in import taxes and the anticipation of good monsoon rains are likely to revive demand, especially with the main festival season starting in September. Technically, the market is experiencing fresh buying, with open interest increasing by 3.11% to settle at 19,849 while prices rose by 552 rupees. Gold is currently supported at 68,750, with potential testing of 68,325 levels below. On the upside, resistance is expected at 69,450, and a move above this could see prices testing 69,725.
 

Trading Ideas:
* Gold trading range for the day is 68325-69725.
* Gold gained as investors remained optimistic that Fed could drop clues about lowering interest rates in September
* India's gold demand fell 5% in June 2024, but consumption is expected to improve in the second half of 2024
* Global gold demand fell 6% YoY to 929 metric tons in Q2, due to a 19% drop in jewellery consumption.


Silver
Silver prices settled up by 1.69% at 82659 as investors awaited the Federal Reserve's commentary on monetary policy and upcoming U.S. economic data for insights into the pace and scale of potential interest rate cuts. The Fed is expected to maintain current rates at the conclusion of its two-day meeting on Wednesday but may hint at policy easing starting in September, with inflation nearing its 2% target. The U.S. labor market remains relatively robust, with job openings reported at 8.18 million as of the last day of June, according to the Labor Department's monthly Job Openings and Labor Turnover Survey. Although labor market momentum is slowing, the decline is not as sharp as anticipated. The S&P CoreLogic Case-Shiller 20-city home price index in the U.S. increased by 6.8% year-on-year in May 2024, following a 7.3% rise in April, slightly above the forecast of 6.7%. The average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac remained unchanged in May, holding the revised 0.3% increase from the prior month, against market expectations of a 0.2% advance. Technically, the silver market is under short covering, indicated by a 6.7% drop in open interest to settle at 27838 contracts, while prices increased by 1372 rupees. Currently, silver finds support at 81580, with a potential test of 80505 if it falls below this level. Resistance is likely at 83265, and a move above this level could see prices testing 83875.
 

Trading Ideas:
* Silver trading range for the day is 80505-83875.
* Silver prices edged higher as investors awaited the Federal Reserve's commentary on its monetary policy
* U.S. labor market remains relatively robust as the number of jobs available remains elevated.
* Fed's policy meet to conclude on Wednesday, Powell to speak


Crudeoil
Crude oil settled down by -0.93% at 6,292, as concerns over demand in China overshadowed the potential for lower U.S. crude and product inventories. A series of disappointing economic reports from China, the world's largest crude importer, has pressured prices. Data revealed an 11% decline in China's total fuel oil imports in the first half of 2024. Additionally, concerns about China's broader economic outlook were heightened by disappointing GDP figures and an unexpected rate cut by the PBOC last week to stimulate growth. Further pressure on crude oil prices came after Israel indicated its response to a rocket strike in Israeli-occupied Golan Heights would be measured to avoid escalating the Middle East into a full-scale conflict. In the U.S., crude oil inventories fell by 3.741 million barrels in the week ended July 19, 2024, surpassing market expectations of a 2.05 million barrel draw, according to the EIA Petroleum Status Report. This marks the fourth consecutive week of declines. Crude stocks at the Cushing, Oklahoma delivery hub decreased by 1.708 million barrels, following a 875 thousand barrel draw the previous week. Meanwhile, gasoline stocks dropped by 5.572 million barrels, against a forecast of a 0.9 million draw, and distillate stockpiles, including diesel and heating oil, decreased by 2.753 million barrels, compared with a consensus expectation for a 0.53 million barrel increase. Technically, the market is experiencing fresh selling, with open interest rising by 12.55% to settle at 13,934 while prices declined by 59 rupees. Crude oil is currently supported at 6,243, with a potential test of 6,193 levels below. On the upside, resistance is expected at 6,358, and a move above this level could see prices testing 6,423.

Trading Ideas:
* Crudeoil trading range for the day is 6193-6423.
* Crude oil dropped amid worries about demand in China
* China's leaders vow to boost policy support for economy
* US crude and fuel stockpiles expected to fall in latest report


Naturalgas
Natural gas prices surged by 3.41% to settle at 178.8, driven by forecasts of record-breaking heat expected later this week, which could significantly increase the demand for gas by power generators. Despite this bullish sentiment, there was a bearish undertone due to a rise in output and lower-than-expected demand forecasts for the next two weeks. Gas flow to Freeport LNG in Texas was poised to reach a 14-month high after the plant resumed full service following a nine-day outage caused by Hurricane Beryl in early July. Currently, gas storage levels are about 17% higher than normal for this time of year. Although storage builds have been smaller recently, this is due to several producers cutting output earlier in the year when futures prices hit 3-1/2-year lows. LSEG reported that gas output in the Lower 48 states averaged 102.5 bcfd in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. The U.S. output peaked at a monthly record of 105.5 bcfd in December 2023. U.S. utilities added 22 billion cubic feet of gas into storage for the week ending July 19, 2024, exceeding market expectations of a 15 billion cubic feet increase. This brought stockpiles to 3,231 Bcf, which is 249 Bcf higher than the same time last year and 456 Bcf above the five-year average of 2,775 Bcf. Technically, the natural gas market is under short covering, with a 6.71% drop in open interest to 43,390 contracts, while prices increased by 5.9 rupees. Natural gas finds support at 171, with a potential test of 163.3 if it falls below this level. Resistance is expected at 182.9, and a move above this could see prices testing 187.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 163.3-187.1.
* Natural gas jumped on forecasts for record-breaking heat later this week.
* That price increase came despite a rise in output
* The amount of gas flowing to Freeport LNG in Texas was on track to reach a preliminary 14-month high.


Copper
Copper settled up by 0.35% at 794 on short covering after recent declines driven by concerns over Chinese demand and high inventories. Despite these gains, copper prices have been under pressure due to slower-than-expected economic growth in China and the lack of new stimulus measures from a key political meeting. Copper inventories in Shanghai Futures Exchange warehouses fell to a two-month low of 301,203 tons, which provided some support to prices. China's economic data has been a mixed bag, with weaker-than-expected growth figures and disappointing outcomes from a leadership meeting that emphasized policy continuity over significant structural changes. As a result, market participants are cautious, awaiting further direction from the upcoming Federal Reserve policy meeting and U.S. economic data releases. Citi Research projects that copper prices might struggle for direction in the short term but expects a recovery to $9,500 per ton within three months and $11,000 by early 2025, driven by anticipated Fed rate cuts and expected inventory draws and deficits in the second half of 2024. The copper premium in China has surged to $25 per ton, the highest in over three months, indicating a recovery in import demand. The global refined copper market showed a 65,000 metric ton surplus in May, compared to an 11,000 metric ton surplus in April, according to the International Copper Study Group (ICSG). Technically, the copper market is experiencing fresh buying, with open interest increasing by 1.53% to settle at 13,901 while prices rose by 2.8 rupees. Copper is currently supported at 786.2, with potential testing of 778.4 levels below. On the upside, resistance is expected at 798.3, and a move above this level could see prices testing 802.6.
 

Trading Ideas:
* Copper trading range for the day is 778.4-802.6.
* Copper gains on short covering after prices dropped on Chinese demand concerns and high inventories
* Pressure seen on worries about China demand prospects after slower-than-expected economic growth in the second quarter.
* Copper inventories in warehouses monitored by ShFe declined to a two-month low of 301,203 tons.


Zinc
Zinc prices settled up by 0.52% at 251.1, driven by short covering after recent declines. This price movement comes amid a complex production landscape in China, where June's refined zinc production reached 545,800 metric tons, a 1.81% increase from May but a 1.2% decrease year-on-year. For the first half of the year, production totaled 3.182 million metric tons, down 1.39% year-on-year but still higher than expected. The month saw varied production changes, with some smelters increasing output post-maintenance and others reducing due to new maintenance schedules. Despite the tight supply of zinc concentrate, refinery raw material inventories are being consumed faster than replenished. Consequently, a decline in domestic refined zinc production is expected in the third quarter. The overall supply remains constrained, with zinc ingot inventory in seven regions decreasing to 169,100 metric tons, a drop of 22,800 metric tons from July 18 and 8,600 metric tons from July 22. Zinc inventories in Shanghai Futures Exchange warehouses fell by 5.1% from the previous Friday. Globally, MMG Ltd halted operations at a mill at its Dugald River zinc mine in Australia for two months due to repair work, further tightening the already constrained zinc concentrates market. Despite the stoppage, MMG expects minimal impact on overall 2024 production. The global zinc market surplus fell significantly to 22,100 metric tons in April from 70,100 tons in March, indicating a tightening market. Technically, zinc is under short covering with a 2.51% drop in open interest to 1945 contracts while prices increased by 1.3 rupees. Zinc is currently supported at 248.7, with a potential test of 246.3 if it falls below this level. Resistance is likely at 252.5, and a move above this level could see prices testing 253.9.
 

Trading Ideas:
* Zinc trading range for the day is 246.3-253.9.
* Zinc gains on short covering after prices dropped as China's refined zinc production up by 1.81% MoM
* The supply of zinc concentrate remains tight, and refinery raw material inventories continue to be consumed more than replenished
* In June, China's refined zinc production was 545,800 mt, up 9,700 mt or 1.81% MoM but down 1.2% YoY.


Aluminium
Aluminium settled up by 0.1% at 209.45 on short covering after prices had dropped amid growing demand concerns from China, the top consumer. The Chinese government's decision not to pass aggressive stimulus measures to address the economic slowdown in the manufacturing sector and its shift in focus towards advanced technologies and new energies contributed to market uncertainty. The total social inventory of aluminum ingots was 790,000 metric tons, down 7,000 metric tons week-on-week but still 254,000 metric tons higher year-on-year. On a macro level, the Third Plenum of the Communist Party of China was held, which made systematic arrangements for further comprehensive deepening of reforms, potentially stabilizing market confidence. Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange fell by 0.6% from the previous Friday. Global primary aluminium output in June rose by 3.2% year-on-year to 5.94 million tonnes, according to the IAI. For the first half of 2024, global primary aluminium output increased by 3.9% year-on-year to 35.84 million metric tons, driven mainly by higher production in China. Aluminium output in Western and Central Europe rose by 2.2% to 1.37 million tons, while production in Russia and Eastern Europe increased by 2.4% to 2.04 million tons. The Gulf region's output rose by 0.7% to 3.10 million tons. Technically, the aluminium market is experiencing fresh buying, with open interest increasing by 1.03% to settle at 5,180 while prices rose by 0.2 rupees. Aluminium is currently supported at 207.5, with potential testing of 205.4 levels below. On the upside, resistance is expected at 210.7, and a move above this level could see prices testing 211.8.
 

Trading Ideas:
* Aluminium trading range for the day is 205.4-211.8.
* Aluminium gains on short covering after prices dropped amid mounting demand concerns from China.
* The Chinese government refrained from passing stimulus to target the aggressive slowdown in the manufacturing sector.
* The total social inventory of aluminum ingots is 254,000 mt higher YoY.


Cottoncandy
Cottoncandy settled down by -0.54% at 56,670 due to profit booking, though it had support from several factors. The area under cotton cultivation in Punjab, Haryana, and Rajasthan has significantly declined, with a total of 10.23 lakh hectares reported this year compared to last year’s 16 lakh hectares. Punjab saw only 97,000 hectares under cotton, a stark contrast to the normal 7.58 lakh hectares in the 1980s and 1990s. Rajasthan's cotton area dropped from 8.35 lakh hectares last year to 4.75 lakh hectares this year, and Haryana's area decreased from 5.75 lakh hectares to 4.50 lakh hectares in 2024. Additionally, a delay in shipments from the US and Brazil has triggered demand for Indian cotton from mills in neighboring countries. Firm cottonseed prices have supported cotton prices, even as sowing for the Kharif 2024 season has started in Karnataka, Telangana, and Andhra Pradesh, with the onset of monsoon rains. It is expected that cotton acreage in Telangana will rise as some chili farmers may switch to cotton due to weak chili prices. For the 2024/25 U.S. cotton projections, higher beginning and ending stocks are expected compared to the previous month, with unchanged production, domestic use, and exports. The average upland farm price is forecasted to be 70 cents per pound, down 4 cents from the May forecast, leading to ending stocks being 400,000 bales higher at 4.1 million bales. Globally, the 2024/25 cotton balance sheet shows increased beginning stocks, production, and consumption, with world ending stocks projected to be 480,000 bales higher at 83.5 million bales. Technically, the market is under fresh selling, with a gain in open interest by 0.6% to settle at 168, while prices fell by 310 rupees. Cottoncandy has support at 56,420, and a break below this level could test 56,170. On the upside, resistance is expected at 56,920, with a move above potentially testing 57,170.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56170-57170.
* Cotton dropped  on profit booking after seen supported as area under cotton in North India drops
* India's cotton exports in the first nine months of 2023-24 increased by 68% to 26 lakh bales
* CAI estimates closing stocks at 20 lakh bales at the end of 2023-24, down from 28.90 lakh bales in the previous year
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric settled down by -0.4% at 15,530 amid news of increased sowing. However, the downside was limited as farmers are holding back stocks in anticipation of further price rises. This year, turmeric is expected to be sown extensively across all producing states due to growers receiving fair prices for their produce. In Erode, sowing is reported to be double compared to last year, while in Maharashtra, Telangana, and Andhra Pradesh, sowing is estimated to be 30-35% higher than last year. Last year, turmeric was sown on about 3-3.25 lakh hectares in the country, and this year, it is estimated to increase to 3.75-4 lakh hectares. Besides low sowing last year, unfavorable weather conditions impacted the crop, resulting in an estimated production of 45-50 lakh bags of turmeric for 2024, with an additional outstanding stock of 35-38 lakh bags. Despite increased sowing this season, the upcoming turmeric crop is expected to be around 70-75 lakh bags, while the outstanding stock is expected to remain zero. Consequently, the availability of turmeric in 2025 will be less than the consumption. Turmeric exports in May 2024, 17,414.84 tonnes were exported, a 23.43% rise from April 2024 but a 12.17% drop compared to May 2023. In Nizamabad, a major spot market, prices ended at 16,103.55 rupees, dropping by -1.72%. Technically, the market is under long liquidation, with open interest down by -1.8% to settle at 15,562 while prices decreased by 62 rupees. Turmeric has support at 15,072, with a potential test of 14,612 levels below, while resistance is expected at 15,890, with a move above potentially testing 16,248.
 

Trading Ideas:
* Turmeric trading range for the day is 14612-16248.
* Turmeric prices settled down 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 16103.55 Rupees dropped by -1.72 percent.


Jeera
Jeera prices settled down by -0.17% at 26715 due to expectations of higher production. However, the downside was limited by robust domestic and export demand and tight global supplies. Farmers holding back stocks for better prices also supported the market. This season's jeera production is likely to be 30% higher at 8.5-9 lakh tonnes due to a substantial rise in cultivation area, with Gujarat's sowing area up by 104% and Rajasthan's by 16%. Global production has increased, with China's cumin output rising to 55-60 thousand tons from 28-30 thousand tons. High prices last season incentivized increased production in Syria, Turkey, and Afghanistan. Turkey expects to produce 12-15 thousand tons, and Afghanistan's output could double, weather permitting. As new supplies enter the market, cumin prices may decline. Reduced export trade in cumin also contributes to the price drop. In Gujarat, the sowing area increased by 30-35% in regions like Mehsana, Banaskantha, and Patan, leading to an estimated record production of 4.08 lakh tonnes. Rajasthan's production increased by 53%. Trade analysts predict a significant increase in cumin exports, potentially reaching 14-15 thousand tonnes in February 2024, although 2023 saw a volatile period with a 30-10% decline in exports. Technically, the market is under long liquidation, with a 1.46% drop in open interest to 26310 contracts while prices fell by -45 rupees. Jeera finds support at 26250, with a potential test of 25770 if it falls below this level. Resistance is likely at 27180, and a move above could see prices testing 27630.
 

Trading Ideas:
* Jeera trading range for the day is 25770-27630.
* 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 26686.2 Rupees dropped by -0.42 percent.

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