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Gold

Yesterday, gold prices edged up by 0.1%, settling at 71,654, as U.S. Treasury yields remained stable and investors turned cautious ahead of crucial economic data that might influence the Federal Reserve's interest rate decisions. Recent data indicated that U.S. prices were unchanged in May while consumer spending saw a moderate rise. The market now perceives a 63% likelihood of the Federal Reserve cutting interest rates in September and another potential cut in December. Investors are closely watching for remarks from Fed Chair Jerome Powell, minutes from the Fed's latest policy meeting, and U.S. nonfarm payrolls data due later this week. In international markets, gold imports to China via Hong Kong fell by 38% in April compared to the previous month, totaling 34.6 metric tons, down from 55.8 tons in March, as reported by the Hong Kong Census and Statistics Department. Indian gold demand remained subdued due to higher prices and some buyers postponing purchases in anticipation of a reduction in import duty in the upcoming budget. Indian dealers offered discounts of up to $9 per ounce over official domestic prices, down from last week's $13 discount. In China, premiums ranged from $12-$23 per ounce over international spot prices, slightly lower than the previous week's $18-$25 range. In Japan, bullion was sold at par or with a $0.5 premium, while in Singapore, premiums were at par to $2.10, and in Hong Kong, at par to $2. Technically, the market is under short covering, with open interest dropping by 0.67% to 14,067 contracts as prices increased by 72 rupees. Gold is currently supported at 71,395, with a potential test of 71,135 if it falls below this level. Resistance is expected at 71,895, and a move above this level could see prices testing 72,135.
 

Trading Ideas:
* Gold trading range for the day is 71135-72135.
* Gold prices were little changed as U.S. Treasury yields held firm
* Investors turned cautious ahead of key economic data that could shed light on the Federal Reserve's potential rate cut trajectory.
* Market now sees a 63% chance of the Fed cutting interest rates in September as well as another cut in December.


Silver
Silver prices edged up by 0.23% to 89,750 as investors continued to analyze the recent U.S. inflation data. The ISM Manufacturing PMI unexpectedly fell to 48.5 in June 2024 from 48.7 in May, missing the forecast of 49.1. This marked the third consecutive month of declining manufacturing activity, indicating weak demand, reduced output, and accommodating inputs. In the U.S., construction spending dropped by 0.1% month-over-month in May 2024, contrary to market expectations of a 0.1% increase, following a revised 0.3% rise in April. The Federal Reserve's preferred inflation measure showed its lowest annual rate since 2021, fueling optimism that price growth will align with target levels, thereby supporting expectations for two rate cuts by the Fed this year. Lower interest rate expectations also buoyed silver prices, with anticipated rate cuts by the Bank of England post-election and further cuts expected from the People's Bank of China to stimulate the economy. Investors are now focusing on the upcoming U.S. payrolls report and FOMC minutes for further insight into the timing of potential Fed rate cuts. In India, silver imports in the first four months of the year have already exceeded the total for all of 2023, driven by rising demand from the solar panel industry and investor bets on silver outperforming gold. Technically, the market is experiencing fresh buying, with a significant 11.19% increase in open interest to 23,710 contracts and a price rise of 210 rupees. Silver is currently supported at 89,115, with a potential test of 88,480 levels below this support. Resistance is anticipated at 90,305, and a move above this level could see prices testing 90,860.
 

Trading Ideas:
* Silver trading range for the day is 88480-90860.
* Silver steadied as investors continued to assess the recent US inflation data.
* The ISM Manufacturing PMI unexpectedly declined to 48.5 in June 2024 from 48.7 in May
* Construction spending in US fell by 0.1% month-over-month to a seasonally adjusted annual rate of $2,140 billion in May 2024


Crudeoil
Yesterday, crude oil prices rose by 2.13%, settling at 6,950, driven by expectations of peak summer consumption and OPEC+ production cuts. However, gains were limited by increased output from other producers and market caution ahead of upcoming elections. The Energy Information Administration (EIA) reported a rise in oil production and demand for major products to a four-month high in April, which supported prices. Additionally, traders are monitoring the Atlantic hurricane season's impact on oil and gas production and consumption, with Hurricane Beryl marking its start. In the speculative market, money managers increased their net long U.S. crude futures and options positions by 53,339 contracts to 213,177 during the week ending June 25, according to the U.S. Commodity Futures Trading Commission (CFTC). The EIA also reported that U.S. crude stocks and gasoline inventories rose while distillate inventories fell in the week ending June 21. Crude inventories increased by 3.6 million barrels to 460.7 million barrels, contrary to expectations for a 2.9 million-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 226,000 barrels. Refinery crude runs decreased by 233,000 barrels per day, and refinery utilization rates dropped by 1.3 percentage points. Technically, the crude oil market is experiencing fresh buying, with open interest surging by 62.64% to settle at 7,291 contracts as prices rose by 145 rupees. Crude oil is currently supported at 6,858, with a potential test of 6,767 if it falls below this level. Resistance is anticipated at 6,999, and a move above this level could see prices testing 7,049.
 

Trading Ideas:
* Crudeoil trading range for the day is 6767-7049.
* Crude oil prices rose helped by expected peak summer consumption and OPEC+ production cuts
* Though gains were capped by rising output from other producers and caution over potential market volatility ahead of pending elections.
* EIA reported that oil production and demand for major products rose to a four-month high in April, supporting prices.


Naturalgas
Natural gas prices fell by 3.81% to 209.5, pressured by increased production from companies such as EQT and Chesapeake Energy, as well as rising output in recent weeks. The forecast for reduced demand over the next two weeks and an ongoing oversupply of gas in storage also contributed to the price decline. This decrease occurred despite a persistent heatwave across much of the U.S., which is expected to continue through mid-July, driving power generators to burn significant amounts of gas to power air conditioners. According to LSEG, gas output in the Lower 48 U.S. states increased to an average of 98.8 billion cubic feet per day (bcfd) in June, up from a 25-month low of 98.1 bcfd in May, but still below the record high of 105.5 bcfd in December 2023. Meteorologists project that the weather in the Lower 48 states will remain hotter than normal through at least July 16. LSEG forecasts that average gas demand, including exports, will rise from 99.8 bcfd this week to 105.8 bcfd next week. Gas flows to the seven major U.S. LNG export plants decreased slightly to 12.8 bcfd in June, down from 12.9 bcfd in May and a record high of 14.7 bcfd in December 2023. U.S. utilities added 52 billion cubic feet of gas into storage during the week ending June 21, 2024, above the five-year average of 2,569 Bcf, positioning total working gas above the five-year historical range. Technically, the market is under fresh selling pressure, with an 11.85% increase in open interest to 31,222 contracts and a price decline of 8.3 rupees. Natural gas is currently supported at 206.6, with potential testing of 203.6 levels below this support. Resistance is likely at 214.5, and a move above this could see prices testing 219.4.
 

Trading Ideas:
* Naturalgas trading range for the day is 203.6-219.4.
* Natural gas dropped due to increased production after companies like EQT and Chesapeake Energy ramped up drilling.
* Pressure also seen on rising output in recent weeks, forecasts for less demand over the next two weeks.
* In June, gas output in the Lower 48 states rose to 98.6 bcfd from a 25-month low of 98.1 bcfd in May.


Copper
Yesterday, copper prices rose by 0.62%, closing at 845.75, driven by increased physical demand in China. This trend is expected to continue if prices remain stable. LME-approved copper inventories surged to 180,125 tons as of June 27, up from 104,000 tons in mid-May. The Yangshan copper discount tightened to $7 per ton from $20 in May, indicating improved import appetite in China. However, prices may face pressure in Q3 as Chinese smelters boost supply post-maintenance. Shanghai Futures Exchange copper inventories fell by 1% from the previous week (June 21). Recent PMI reports suggest a bleak manufacturing outlook in major economies, compounded by slowing industrial demand in China. The International Copper Study Group (ICSG) reported a 13,000 metric ton surplus in April, down from 123,000 metric tons in March. April's world refined copper output was 2.29 million metric tons, with consumption at 2.28 million metric tons. Adjusting for Chinese bonded warehouse inventory changes, the surplus was 33,000 metric tons in April, down from 136,000 metric tons in March. China's May unwrought copper imports rose 15.8% year-on-year to 514,000 metric tons, exceeding market expectations despite weak consumption. This marked a 17.4% increase from the previous month. From January to May, China imported 2.33 million tons of unwrought copper and products, up 8.8% from 2023. Technically, the market is under short covering with open interest dropping by 3.66% to 8,570 contracts as prices rose by 5.25 rupees. Copper is supported at 838, with potential testing of 830.2 if it falls below this level. Resistance is at 851.3, with a move above potentially testing 856.8.
 

Trading Ideas:
* Copper trading range for the day is 830.2-856.8.
* Copper gains as physical demand in China has been picking up.
* Inventories of copper in LME-approved warehouses climbed to 180,125 tons on June 27, from around 104,000 tons in mid May.
* The Yangshan copper discount has tightened to $7 a ton on June 28, from as low as a $20-discount in May.


Zinc
Zinc prices inched up by 0.02% to 265.4, buoyed by hopes of improved demand in China following recent price drops and ongoing supply concerns. Sentiment was further supported by the People's Bank of China's reinforcement of its easing monetary stance. However, the upside was limited as China's industrial output slowed more than expected in May, highlighting weak industrial demand after a contractionary manufacturing PMI in the world's top copper consumer. Zinc concentrate imports in China fell by 24% in the first four months of the year compared to the previous year, due to a tightening raw materials market. Spot treatment charges for imported zinc concentrates have dropped to $30-50 per ton, insufficient to cover processing costs for many Chinese smelters, prompting a shift towards domestic sources. Global zinc mine production decreased by 2% in 2022 and another 1% in 2023, with a further 3% year-on-year decline in the first quarter of 2024, as per the International Lead and Zinc Study Group. LME zinc stocks have rebounded from 30,475 tons to 255,900 tons since the start of 2023, marking a 15% increase since January. Despite significant inventory churn this year, the headline figure has remained stable in the 250,000-260,000-ton range since April. The global zinc market surplus decreased to 22,100 metric tons in April from 70,100 tons in March. Technically, the market is experiencing fresh buying, with a 5.67% increase in open interest to 2,740 contracts and a slight price rise of 0.05 rupees. Zinc is currently supported at 263.2, with potential testing of 260.9 levels below this support. Resistance is expected at 268.1, and a move above this level could see prices testing 270.7.
 

Trading Ideas:
* Zinc trading range for the day is 260.9-270.7.
* 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
Aluminium prices edged up by 0.02% to 230.45, bolstered by optimism stemming from China's central bank reiterating its commitment to an easing monetary policy to support economic stability. However, the upside was limited due to ample supply and subdued demand. Inventories in warehouses monitored by the Shanghai Futures Exchange increased by 2.0% from the previous week as of June 14. Additionally, US Manufacturing PMI rose to a three-month high of 51.7 in June 2024 from 51.3 in May, surpassing expectations of 51, providing some support to the market. China's decision to leave its key benchmark lending rates unchanged reflects Beijing's cautious approach amid narrowing interest rate margins and a weakening currency. Global primary aluminium output increased by 3.4% year-on-year to 6.1 million tons in May, according to the International Aluminium Institute. China's aluminium production in May rose by 7.2% to 3.65 million tons compared to the previous year. China's aluminium imports surged by 61.1% in May from a year earlier, largely driven by increased shipments from Russia, which faces Western sanctions. China imported 310,000 metric tons of unwrought aluminium and products in May. Russian aluminium exports to China have risen significantly, with 500,741 tons imported in the first four months of the year, a 91.6% increase from the same period last year. Technically, the aluminium market is experiencing fresh buying, with a 2.12% increase in open interest to 4,425 contracts and a slight price increase of 0.05 rupees. Aluminium is currently supported at 229.4, with potential testing of 228.3 levels below this support. Resistance is anticipated at 232.2, and a move above this level could see prices testing 233.9.
 

Trading Ideas:
* Aluminium trading range for the day is 228.3-233.9.
* 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 closed lower by -0.34% at 58,600 amid profit booking, following earlier gains driven by delays in shipments from the US and Brazil, which boosted demand for Indian cotton from neighboring mills. The firm trend in cottonseed prices has supported natural fiber prices, despite the onset of sowing for the kharif 2024 season in southern states like Karnataka, Telangana, and Andhra Pradesh, benefiting from monsoon rains. Expectations of increased cotton acreage in Telangana, where some chilli farmers are shifting to cotton due to weaker spice prices, contrast with a projected decrease in acreage in North India. Factors contributing to this decline include rising pest infestations and labor costs, affecting early-planted crops since mid-April. In the US, the 2024/25 cotton projections show higher beginning and ending stocks, with unchanged production, domestic use, and exports. The season's average farm price is reduced 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, while world trade remains stable. Ending stocks are forecasted higher at 83.5 million bales, reflecting adjustments in global production, consumption, and trade dynamics. In Rajkot, a significant spot market, cotton prices closed slightly higher at 27,686.75 Rupees, up 0.11%. Technically, the cotton market saw fresh selling pressure with a slight increase in open interest to 376 contracts. Despite this, prices fell by 200 rupees. Support levels for Cottoncandy are identified at 58,340, with a potential test of 58,080 if these levels break. Resistance is anticipated at 58,820, with a move above potentially pushing prices towards 59,040.
 

Trading Ideas:
* Cottoncandy trading range for the day is 58080-59040.
* 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 fell sharply by 4.64% to settle at 16,138 amid news of increased sowing activities. Farmers are motivated by fair prices, leading to an anticipated surge in turmeric cultivation across major producing states. In the Erode region, turmeric 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. This significant increase is expected to elevate the sowing area from 3-3.25 lakh hectares last year to 3.75-4 lakh hectares this year. The previous year saw adverse weather conditions that contributed to a lower production of turmeric, estimated at 45-50 lakh bags, along with an outstanding stock of 35-38 lakh bags. Despite the increased sowing this season, the upcoming turmeric crop is expected to be around 70-75 lakh bags, with no outstanding stock remaining. Consequently, the availability of turmeric is projected to be less than the consumption during 2025, potentially leading to tighter market conditions. Export data reveals a decline in turmeric exports, with 14,109.09 tonnes exported in April 2024, a 19.07% drop from March 2024 and a 27.98% drop from April 2023. Conversely, turmeric imports rose significantly, with 3,588.11 tonnes imported in April 2024, marking a 192.36% increase from March 2024 and a 570.31% increase from April 2023. In Nizamabad, a major turmeric spot market, prices ended at 17,475.75 rupees, reflecting a 1.5% decrease. Technically, the market is under long liquidation as open interest dropped by 2.47% to settle at 19,775 contracts while prices fell by 786 rupees. Turmeric is currently finding support at 15,744, with potential testing of 15,352 levels below this support. Resistance is anticipated at 16,714, and a move above this level could see prices testing 17,292.
 

Trading Ideas:
* Turmeric trading range for the day is 15352-17292.
* 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 17475.75 Rupees dropped by -1.5 percent.


Jeera
Jeera prices closed lower by -0.95% at 28,800 due to expectations of higher production in the upcoming season, which weighed on market sentiment. Despite this downward pressure, prices were supported by robust domestic and export demand alongside tight global supplies. Farmers withholding stocks in anticipation of better prices also provided a floor to prices. The current jeera production outlook suggests a substantial increase of 30% to 8.5-9 lakh tonnes, driven by significant expansions in cultivation areas in Gujarat and Rajasthan. Gujarat saw a remarkable 104% increase in sowing area, while Rajasthan recorded a 16% rise. This surge in production is part of a global trend, with notable increases reported in China, Syria, Turkey, and Afghanistan. High prices from previous seasons incentivized expanded planting, particularly in regions like Mehsana, Banaskantha, Patan (Gujarat), and Jaisalmer, Barmer, Jodhpur, Ajmer (Rajasthan). However, the influx of new supplies from these regions, expected around June and July, is likely to exert downward pressure on jeera prices. This shift in global supply dynamics, coupled with reduced export activity and declining international prices, contributes to the bearish outlook for jeera. In terms of technical analysis, the jeera market witnessed long liquidation as open interest dropped by -2.21%, settling at 2,658 contracts. Prices declined by -275 rupees, with support identified at 28,200 and a potential downside target at 27,610 if support levels are breached. Resistance is anticipated at 29,380, and a breakthrough could push prices towards 29,970. Traders and stakeholders will closely monitor these developments alongside export trends and global price movements to gauge future price directions in the jeera market.
 

Trading Ideas:
* Jeera trading range for the day is 27610-29970.
* 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 28949.4 Rupees dropped by -0.3 percent.

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