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Gold

Gold prices settled down by -1.38% at 71,584, driven by a surge in the dollar index, which hit a seven-week high. This movement was fueled by solid S&P PMI data indicating the fastest growth in US business activity in 26 months, suggesting the Federal Reserve might be slower than other major central banks in lowering interest rates. While the Fed has urged caution on rate cuts, the ECB, SNB, and BOC have already initiated reductions, and the Bank of England and BOJ are expected to follow soon. In contrast, the Eurozone's business growth slowed sharply in June due to declining demand, with the services industry showing signs of weakening and manufacturing downturn worsening. Gold imports to China via Hong Kong fell 38% in April from the previous month, totaling 34.6 metric tons compared to March's 55.8 tons. This decline marks a shift from the high consumption seen in the first quarter of the year. China's first-quarter gold consumption rose 5.94% from the previous year, reaching 308.91 metric tons. In India, the world's second-largest gold consumer, demand slowed as prices neared record highs, dampening retail purchases without festival-driven demand. Indian dealers offered discounts of up to $13 an ounce over official domestic prices, compared to last week's $10. In China, dealers charged premiums of $18-$25 per ounce, slightly down from the previous week's $18-$26. Technically, the gold market is under long liquidation, with a -5.72% drop in open interest to settle at 14,498 while prices fell by -1,002 rupees. Gold finds support at 71,125, with potential testing of 70,670 if this level is breached. Resistance is likely at 72,450, and a move above this could see prices testing 73,320.
 

Trading Ideas:
* Gold trading range for the day is 70670-73320.
* Gold dropped as dollar index surged, hitting a seven-week high.
* Solid PMI data fueled expectations that Fed may be slower than other major central banks to lower interest rates.
* The service sector spearheaded the upswing with support from manufacturing, although the latter's recent resurgence has lost some steam.

Silver

Yesterday, silver prices fell by 2.76% to 89,139 as robust economic data reduced the likelihood of the Federal Reserve implementing a rate cut in the third quarter. Despite this, former St. Louis Fed president James Bullard mentioned that a cool inflation reading could potentially allow for a rate cut in September. Currently, nearly 65% of the market anticipates a Fed rate cut by September, with expectations of two rate cuts this year. The S&P Global US Manufacturing PMI rose to a three-month high of 51.7 in June 2024 from 51.3 in May, surpassing forecasts of 51. This indicates an improvement in the goods-producing sector for the second consecutive month, with new orders and employment contributing positively, and manufacturing payrolls experiencing their largest increase in 21 months. Additionally, the S&P Global US Services PMI climbed to 55.1 in June from 54.8 in May, marking the sharpest expansion in the services sector since April 2022 and exceeding market expectations of 53.7. These strong data points suggest that the US economy remains resilient, providing the Fed with room to maintain restrictive rates if inflation does not slow. India's silver imports have surged in the first four months of the year, surpassing the total for all of 2023 due to rising demand from the solar panel industry and increased investor interest. Technically, the silver market is experiencing long liquidation, with open interest dropping by 4.22% to settle at 16,509 contracts. Prices are currently supported at 88,250, with a potential test of 87,360 if they fall below this level. Resistance is expected at 90,855, and a move above this could see prices testing 92,570.
 

Trading Ideas:
* Silver trading range for the day is 87360-92570.
* Silver dropped after strong economic data limited the need for the Fed to deliver a rate cut in the third quarter.
* 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

Crude oil prices settled down by -0.78% at 6746, pressured by concerns over the impact of a strong U.S. dollar and escalating Middle East conflict on global oil demand growth. The geopolitical tensions in the Middle East, particularly Israeli forces advancing into Gaza and fears of a potential "all-out war" with Hezbollah in Lebanon, have exacerbated concerns about oil supply disruptions. Despite these tensions, oil prices have been supported recently by strong global demand growth forecasts from OPEC, the IEA, and the US EIA, all of which predict robust demand in the second half of the year. Key OPEC+ members, including Russia and Iraq, have reaffirmed their commitment to production quotas, with Saudi Arabia indicating a willingness to adjust output based on market conditions. Investor sentiment has improved since OPEC+ announced plans to increase production starting in October, with hopes of stronger future demand supporting prices. Further supporting the market, data from the U.S. Energy Information Administration (EIA) showed a significant rise in total product supplied, which increased by 1.9 million barrels per day in the week ending June 14, reaching 21.1 million bpd. Additionally, U.S. crude oil stocks fell by 2.547 million barrels, exceeding market expectations of a 2 million barrel decline. Technically, the crude oil market is experiencing long liquidation, with an -8.92% drop in open interest to settle at 4470 while prices declined by -53 rupees. Crude oil is currently supported at 6705, with a potential test of 6664 levels if this support is breached. On the resistance side, a move above 6813 could see prices testing 6880.
 

Trading Ideas:
* Crudeoil trading range for the day is 6664-6880.
* Crude oil dropped amid concerns that global oil demand growth could be impacted
* U.S. crude and gasoline inventories fall
* U.S. oil demand on the rise as summer begins

Natural Gas

Yesterday, natural gas prices fell by 1.74% to 225.9, driven by an increase in production and forecasts indicating a decline in demand as the current heat wave across the country is expected to subside. Despite this price decline, last week's storage build was smaller than usual for the sixth consecutive week, and forecasts suggest even hotter weather next week than previously anticipated. The U.S. Energy Information Administration (EIA) reported that utilities added 71 billion cubic feet (bcf) of gas into storage during the week ending June 14, which is below market expectations. Natural gas output in the Lower 48 U.S. states increased to an average of 98.2 billion cubic feet per day (bcfd) in June, up from 98.1 bcfd in May. This rise in production, which began in late May, indicates that some drillers are gradually boosting output following a 47% jump in futures prices in April and May. On a daily basis, output reached a 10-week high of 99.6 bcfd on June 17. Major companies like EQT and Chesapeake Energy have started increasing their output in June, although overall U.S. gas production remains about 7% lower in 2024 due to previous reductions in drilling activities when prices fell earlier this year. The EIA also noted that US utilities added 74 billion cubic feet of gas into storage during the week ending June 7, aligning closely with market expectations.. Technically, the market is undergoing long liquidation, with open interest dropping by 38.7% to settle at 5,103 contracts, and prices decreasing by 4 rupees. Natural gas prices are currently supported at 222.3, with a potential test of 218.7 if they fall below this level. Resistance is expected at 230.5, and a move above this could see prices testing 235.1.
 

Trading Ideas:
* Naturalgas trading range for the day is 218.7-235.1.
* Natural gas eased on a rise in output and forecasts for demand to decline in two weeks
* That price decline came despite forecasts for hotter weather and higher demand
* EIA said utilities added 71 bcf of gas into storage during the week ended June 14.


Copper

Copper prices fell by -2.04% to settle at 849.9, influenced by a notable rise in LME inventories, which have surged around 50% since mid-May, and record-high copper exports from China. Additionally, rumors of reduced processing fees due to a potential ore shortage have surfaced, with negotiations between a Chilean copper mine operator and Chinese smelters. In an effort to mitigate the scarcity of copper ore, China's imports of copper scrap have increased significantly. China's monetary policy remains supportive, with the central bank governor indicating flexible use of tools such as interest rates and reserve requirement ratios. Despite this, China's key benchmark lending rates remain unchanged, reflecting limited monetary easing amid narrowing interest rate margins and a weakening currency. In terms of inventory data, copper stockpiles in LME-registered warehouses have climbed to their highest level since January, reaching 161,925 tons. Conversely, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell by 1.8% last week. China's refined copper production in May saw a modest year-on-year increase of 0.6%, while May copper cathodes imports rose 17% year-on-year to 324,530 tons. The global refined copper market showed a surplus of 13,000 metric tons in April, down from a 123,000 metric ton surplus in March, according to the International Copper Study Group (ICSG). Technically, the copper market is under fresh selling pressure, with a 36.9% gain in open interest to settle at 6982, while prices decreased by -17.7 rupees. Copper is currently supported at 844, with a potential test of 838.2 levels if this support is breached. On the resistance side, a move above 860.7 could see prices testing 871.6.
 

Trading Ideas:
* Copper trading range for the day is 838.2-871.6.
* Copper prices dropped as LME inventories rise around 50% since the mid-May low
* China's copper exports stand at a record high the same month.
* Data showed the global refined copper market had a surplus of 13,000 tons in April

Zinc

Yesterday, zinc prices declined by 0.66% to settle at 257.5, influenced by a stronger dollar and increasing stockpiles. Despite these factors, hopes of improved demand in China following recent price drops and supply concerns provided some support. China's central bank reinforced its supportive monetary stance, emphasizing its commitment to prevent exchange rate volatility, which bolstered market sentiment. In China, 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 fell sharply to $30-50 per ton, insufficient to cover processing costs for many Chinese smelters. Consequently, Chinese smelters are increasingly turning to domestic sources for zinc supply. Globally, zinc mine production has seen consecutive declines, with a 2% drop in 2022 followed by another 1% in 2023. The trend continued into 2024, with a 3% year-on-year decrease in the first quarter, highlighting supply constraints as European smelters restart previously idled capacity, reducing spot market concentrate availability. London Metal Exchange (LME) zinc stocks increased significantly from 30,475 tons to 255,900 tons in recent times, reflecting ongoing market dynamics and warehouse arbitrage activities. Despite these fluctuations, the global zinc market surplus narrowed to 22,100 metric tons in April from 70,100 tons in March, indicating a tightening market condition year-over-year. Technically, zinc is experiencing fresh selling pressure, with open interest rising by 27.22% to settle at 2,075 contracts while prices fell by 1.7 rupees. Currently, support is seen at 255.3, with potential for testing 253.1 if this level is breached. Resistance is anticipated at 259.7, and a move above could lead to testing 261.9.
 

Trading Ideas:
* Zinc trading range for the day is 253.1-261.9.
* Zinc dropped amid a stronger dollar and rising stockpiles
* 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 settled down by -0.97% at 230.1 amid increased inventories in warehouses monitored by the Shanghai Futures Exchange, which rose by 2.0% compared to the previous week. This uptick in inventories reflects growing supply pressures in the aluminium market. Meanwhile, in the US, Manufacturing PMI reached a three-month high of 51.7 in June, slightly surpassing expectations and indicating modest expansion in the sector. China maintained its key benchmark lending rates unchanged, continuing its cautious monetary easing due to narrowing interest rate margins and a weakening currency. However, the central bank reiterated its commitment to a supportive monetary policy stance to bolster economic stability. Globally, primary aluminium production rose by 3.4% year-on-year to 6.1 million tons in May, driven largely by a 7.2% increase in China's production to 3.65 million tonnes. China's aluminium imports surged by 61.1% year-on-year in May, primarily due to heightened shipments from Russia amid Western sanctions, with imports reaching 310,000 metric tons of unwrought aluminium and products. Market sentiment has been buoyed by optimism surrounding demand from industries such as solar energy and electric vehicles, contributing to a speculative rally in aluminium prices this year. The London Metal Exchange benchmark contract hit a near two-year high recently, reflecting strong investor interest in the metal. Technically, the aluminium market is witnessing fresh selling pressure, with a notable 29.22% increase in open interest to settle at 4100, while prices declined by -2.25 rupees. Currently, aluminium finds support at 228.9, and a break below this level could test 227.8. On the upside, resistance is anticipated at 231.9, with a potential move above this level targeting 233.8.
 

Trading Ideas:
* Aluminium trading range for the day is 227.8-233.8.
* Aluminium prices dropped as Shanghai warehouse stocks rose by 2% week on week
* 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 settled marginally lower by -0.02% at 57,780, driven by profit booking following earlier gains attributed to delayed shipments from the US and Brazil, which bolstered demand for Indian cotton from nearby mills. The market also saw support from firm cottonseed prices, maintaining natural fiber prices despite ongoing kharif 2024 season sowings in southern states like Karnataka, Telangana, and Andhra Pradesh, which have begun receiving monsoon rains. In the US, the 2024/25 cotton projections indicate higher beginning and ending stocks compared to the previous month, with production, domestic use, and exports unchanged. However, the season average upland farm price decreased to 70 cents per pound due to declines in new-crop cotton futures. Globally, the 2024/25 cotton balance sheet shows increased beginning stocks, production, and consumption, while world trade remains unchanged. Ending stocks are projected higher at 83.5 million bales, reflecting adjustments in production and consumption figures across various regions. Regionally, in India, shifts in agricultural practices are anticipated with potential increases in cotton acreage in Telangana, as some farmers consider switching from chili cultivation amidst weaker spice prices. Conversely, North India may see reduced cotton plantings due to increased pest issues and rising labor costs. Technically, the cotton market is currently experiencing fresh selling pressure, indicated by a 1.64% increase in open interest alongside a price decline of 10 rupees. Support levels are identified at 57,550 and potentially down to 57,330, while resistance is expected around 57,940 and a breakout could push prices towards 58,110.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57330-58110.
* Cotton settled flat 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 experienced a significant decline of -4.52%, settling at 17374, primarily driven by profit booking following recent price gains. Farmers had been holding back stocks in anticipation of higher prices, but increased supplies towards the end of the harvesting season tempered upside potential. The current heat wave across India poses a threat to crop yields, potentially exacerbating the supply crunch and supporting prices, although relief from the hot weather remains uncertain according to the India Meteorological Department. Production estimates for 2023-24 indicate a slight decrease to 10.74 lakh tonnes from 11.30 lakh tonnes the previous year, contributing to market dynamics. Despite local demand in turmeric-growing regions like Sangli, Basmat, and Hingoli remaining robust due to expectations of increased sowing, there has been some demand destruction as prices surged, affecting consumption patterns. Internationally, turmeric exports saw a decline in April 2024, with volumes dropping by 19.07% compared to March 2024 and by 27.98% compared to April 2023. Conversely, imports surged in April 2024, rising sharply by 192.36% compared to March 2024 and by 570.31% compared to April 2023, reflecting shifting trade dynamics. In the technical outlook, the turmeric market witnessed fresh selling pressure with a 2.31% increase in open interest to settle at 21450 contracts, while prices fell by -822 rupees. Currently, turmeric is supported at 16938, with potential downside to 16500 if this level is breached. Resistance is now anticipated at 17982, with a breakout above this level potentially pushing prices towards 18588.
 

Trading Ideas:
* Turmeric trading range for the day is 16500-18588.
* 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 18053.9 Rupees dropped by -0.84 percent.

Jeera

Jeera prices closed slightly higher by 0.16% at 28,810 amid strong domestic and export demand coupled with tight global supplies. The market, however, faced pressure as expectations of higher production in the upcoming season could potentially limit further upside. Farmers withholding stocks in anticipation of better prices also supported current price levels. This season, jeera production is anticipated to increase significantly by 30% to reach 8.5-9 lakh tonnes, driven by a substantial expansion in cultivation areas, particularly in Gujarat and Rajasthan. Gujarat saw a remarkable 104% increase in sowing area, while Rajasthan witnessed a 16% rise. Globally, cumin output has surged, notably in China where production more than doubled from previous levels. Increased planting is also expected in Syria, Turkey, and Afghanistan, which could add to global supplies and potentially exert downward pressure on prices as new crops come to market. In the spot market of Unjha, prices closed at 28,847.55 Rupees, marking a slight decline of -0.3% recently. Export data showed a significant rise in jeera shipments, with April 2024 exports reaching 38,026.96 tonnes, up 133.55% from the same period last year, reflecting robust international demand despite the challenges posed by higher prices. Technically, the jeera market witnessed short covering as indicated by a 4.97% drop in open interest alongside a price increase of 45 rupees. Current support levels are identified at 28,510 and potentially down to 28,200, while resistance is expected around 29,040 and a breakout could lead prices towards 29,260.
 

Trading Ideas:
* Jeera trading range for the day is 28200-29260.
* 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 28847.55 Rupees dropped by -0.3 percent.

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