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gold

Yesterday, gold prices settled down by -0.72% at 71,450 as investors anticipated a series of economic reports and statements from Federal Reserve officials throughout the week to gauge the Fed’s timeline for potential interest rate cuts. Despite a softer-than-expected Consumer Price Index (CPI) in the US for May, investors remained cautious due to the Federal Reserve's projections of higher interest rates and continued price growth in the US economy over the next two years. Philadelphia Fed President Patrick Harker indicated that the central bank could consider a rate cut this year if there is more evidence of slowing inflation, reflecting a cautious stance among Federal Open Market Committee (FOMC) members. In China, the People's Bank of China paused its aggressive gold-buying spree in May due to high prices, which halted the strong momentum of bullion demand seen since 2022. Gold imports to China via Hong Kong fell by 38% in April compared to the previous month, according to data from the Hong Kong Census and Statistics Department. Net imports totaled 34.6 metric tons in April, down from 55.8 tons in March. In India, gold demand remained tepid despite recent price corrections, with buyers postponing purchases due to the absence of major festivals. Indian dealers offered a discount of up to $10 per ounce over official domestic prices, compared to last week's $14 discount. In China, premiums charged by dealers over international spot prices fell to $18-$26 per ounce, down from $27-$32 the previous week. China's central bank held off on gold purchases for its reserves last month after 18 consecutive months of buying. Technically, the gold market is experiencing long liquidation with open interest remaining unchanged at 14,746, while prices dropped by -515 rupees. Currently, gold has support at 71,255, with a potential test of 71,060 if it falls below this level. On the upside, resistance is likely at 71,715, and a move above this level could see prices testing 71,980.

Trading Ideas:
* Gold trading range for the day is 70960-72160.
* Gold gains as investors awaited a series of economic reports and comments from Fed officials
* Investors heeded Fed’s projections of higher interest rates and price growth in the US economy.
* Fed’s Harker suggested a rate cut this year pending evidence of slowing inflation.



silver

Yesterday, silver prices settled down by 0.3% at 88820, influenced by weaker-than-expected U.S. retail sales data which alleviated concerns regarding the outlook for interest rates, thereby supporting prices. Additionally, overcapacity issues stemming from substantial Chinese government support for solar panels prompted industry groups in China to advocate for investment curbs to prevent a significant price downturn. This call for reduced solar panel supply impacted the outlook for silver input demand from manufacturers, countering the recent surge in industrial demand for silver which had driven the metal to outperform gold this year. Despite these pressures, dovish developments from key central banks helped limit the drop in silver prices. The European Central Bank (ECB) and the Bank of Canada (BoC) began their rate-cutting cycles in June, and the Bank of England (BoE) along with the People’s Bank of China (PBoC) are anticipated to reduce borrowing costs in the coming months. In India, silver imports during the first four months of the year have already surpassed the total imports for all of 2023, driven by rising demand from the solar panel industry and investor expectations of silver outperforming gold. India imported a record 4,172 metric tons of silver from January to April, significantly higher than the 455 tons imported during the same period last year. Technically, the market is undergoing long liquidation, with open interest remaining unchanged at 20,643 while prices declined by 270 rupees. Silver is currently supported at 88265; if this level is breached, it could test 87710. On the upside, resistance is expected at 89375, with potential for prices to test 89930 if this resistance is surpassed.

Trading Ideas:
* Silver trading range for the day is 87210-90360.
* Silver recovered after weaker than expected U.S. retail sales data supported prices.
* Chinese government support for solar panels led to industry groups calling for investment curbs to prevent price downturn.
* Lower solar panel supply limited silver input buying by manufacturers, despite surge in silver demand.


Crude oil

Crude oil prices showed a 1.09% increase, settling at 6702 rupees per barrel, driven by optimistic global demand forecasts and expectations of continued supply constraints by major oil-producing nations. Reports from OPEC, the International Energy Agency, and the US Energy Information Administration all highlighted robust growth in oil demand expected in the latter half of the year. This positive outlook was further buoyed by a broader rally in risk assets amidst easing inflation pressures, which raised hopes for future interest rate cuts in major economies. On the supply side, key OPEC+ members like Russia and Iraq reiterated their commitment to production quotas, while Saudi Arabia indicated flexibility in adjusting output based on market conditions. Investor sentiment recovered following OPEC+'s surprise announcement to gradually increase production starting October, spurred by anticipated stronger future demand, which supported prices. In the US, crude oil stocks saw an unexpected increase of 3.730 million barrels, gasoline stocks surged, and distillate stockpiles also rose above consensus forecasts. Conversely, crude stocks at the Cushing delivery hub decreased after a previous build. Market technicals indicated fresh buying interest, with open interest rising by 24.07% to settle at 3,603 contracts. Prices gained 72 rupees, with support seen at 6632 rupees per barrel. A breach below this level could test 6561 rupees. Resistance was noted at 6754 rupees, and a breakout above this could push prices towards 6805 rupees. Overall, while supply dynamics and geopolitical tensions in the Middle East remain influential, market focus continues to hinge on demand outlooks and production policies of major oil-producing nations.

Trading Ideas:
* Crudeoil trading range for the day is 6561-6805.
* Crude oil rose underpinned by an improving global demand outlook
* IEA and EIA pointed to robust oil demand growth in the second half of this year.
* OPEC+ members such as Russia and Iraq reaffirmed their adherence to production quotas.



Natural gas

prices experienced a notable decline of 3.35% yesterday, settling at 233.8, despite anticipated record early summer heat across the Northeast and increased demand from the power sector. The extreme heat forecasts from June 19 to July 2 were initially expected to support prices due to heightened cooling demand, but slight cooling in Texas mid-week, influenced by tropical rains from a nearby cyclone, tempered market sentiment. In terms of production, gas output in the Lower 48 U.S. states remained steady at 98.1 billion cubic feet per day (bcfd) in June, mirroring May's levels and slightly below the monthly record set in December 2023 at 105.5 bcfd. Forecasts for total U.S. supply for the ongoing week were revised up to 106.1 bcfd, indicating ample availability despite robust demand projections. Meteorologists foresee hotter-than-normal weather persisting across the Lower 48 states through at least early July, which is expected to boost gas demand to 102.2 bcfd next week, up from 96.6 bcfd this week, including exports. However, these projections were slightly lower than earlier estimates, suggesting some adjustment in market expectations. Inventories of natural gas saw a significant addition of 74 billion cubic feet during the week ending June 7, 2024, slightly below market expectations but marking the tenth consecutive week of seasonal increases. Total stockpiles now stand at 2,974 Bcf, notably higher than last year and above the five-year average. Technically, the natural gas market is currently experiencing long liquidation, with open interest unchanged at 16,443 while prices fell by 8.1 rupees. Support for natural gas is identified at 229.1; a breach below this level could test 224.3. On the upside, resistance is expected around 240.5, with a potential breakout above leading to testing of 247.1.

Trading Ideas:
* Naturalgas trading range for the day is 229.3-249.1.
* Natural gas prices rose due to extreme heat spreading across the country.
* Weather models predict an exceptionally hot period from June 19 to July 2, supporting natural gas prices.
* Gas output in the Lower 48 U.S. states stood at an average of 98.1 bcfd so far in June, the same as in May.



Copper

Copper prices closed lower yesterday by -0.83% at 849.65, influenced largely by a steadying US dollar following weaker-than-expected retail sales data, which hinted at potential interest rate cuts by the Federal Reserve. This economic outlook affected market sentiment, as a stronger dollar typically makes commodities priced in dollars more expensive for holders of other currencies, dampening demand. The market also reacted to increased stockpiles in LME warehouses, reaching a six-month high amid a subdued demand outlook and the stronger dollar environment. Notably, there was a significant copper delivery of 19,175 metric tons to Asian locations, underscoring the current supply dynamics. LME-approved warehouse inventories rose to 155,850 tons, reflecting sluggish demand conditions. China's copper market dynamics added complexity, with soaring imports of copper scrap due to concentrate shortages impacting refined metal production for sectors like power and construction. Despite record high prices, US shipments of copper scrap to China are likely to pause, affecting supply dynamics further. The International Copper Study Group (ICSG) reported a surplus in the global refined copper market of 125,000 metric tons in March, a slight decrease from February. This surplus was influenced by refined copper output of 2.33 million metric tons against consumption of 2.20 million metric tons. Technically, the copper market saw long liquidation with unchanged open interest at 6,236 contracts while prices declined by -7.15 rupees. Currently, copper finds support at 846.3, with a potential test of 842.8 if it drops below. On the upside, resistance is expected at 852.3, with a move above potentially testing 854.8. This technical outlook suggests cautious trading amid ongoing supply concerns and fluctuating global economic indicators.

Trading Ideas:
* Copper trading range for the day is 834.6-861.2.
* Copper recovered as dollar steadied due to weaker-than-anticipated retail sales data
* Exchange data showed a massive copper delivery of 19,175 metric tons to Asian locations.
* Inventory at LME-approved warehouses rose to 155,850 tons, indicating lackluster demand.

Zinc

Zinc prices closed higher by 0.88% yesterday, settling at 257.6, driven by short covering after recent declines linked to reduced demand from China, the world's largest zinc importer. China's zinc concentrate imports dropped significantly by 24% in the first four months of this year due to a tightening raw materials market. Spot treatment charges for imported zinc concentrates plummeted to $30-50 per ton, inadequate to cover processing costs for many Chinese smelters, prompting a shift towards domestic sources for zinc supply. Globally, zinc production has faced challenges, declining by 2% in 2022 and another 1% in 2023. The trend continued into 2024 with a 3% year-on-year decrease in the first quarter, as reported by the International Lead and Zinc Study Group (ILZSG). Compounding the supply constraints, European smelters restarting idle capacity have reduced spot market availability of concentrates. On the inventory front, London Metal Exchange (LME) zinc stocks have increased significantly, rising from a low of 30,475 tons to 255,900 tons currently, marking a 15% increase since January. Despite fluctuations due to warehouse arbitrage activities, LME stocks have mostly held steady in the 250,000-260,000-ton range since April. In terms of market balance, the global zinc surplus narrowed to 52,300 metric tons in March from 66,800 tons in February, reflecting tighter supply conditions. For the first quarter of the year, the surplus totaled 144,000 tons compared to 201,000 tons in the same period last year, indicating a diminishing surplus year-on-year. Technically, the zinc market witnessed short covering with unchanged open interest at 2,098 while prices rose by 2.25 rupees. Currently, zinc is supported at 255.7; a breach below could test 253.8. Resistance is anticipated around 258.9, with potential for prices to test 260.2 if this level is surpassed.

Trading Ideas:
* Zinc trading range for the day is 253.6-262.4.
* Zinc gains on short covering after prices dropped largely influenced by reduced demand from China.
* In China, zinc concentrate imports decreased by 24% in the first four months of this year compared to the previous year.
* There has been no recovery so far this year, output sliding another 3% year-on-year in the first quarter.



aluminium

Yesterday, aluminium prices closed lower by 0.43% at 231.5, driven by pressures stemming from disappointing industrial output data in May from China, the world's largest consumer of aluminium. China's aluminium production increased by 7.2% year-on-year to 3.65 million tonnes in May, contributing to a total output of 17.89 million tonnes in the first five months of the year, up 7.1% compared to the same period last year. Despite this, aluminium imports into China surged by 61.1% in May from a year ago, largely attributed to heightened shipments from Russia amidst Western sanctions impacting supply dynamics. Russia notably escalated its aluminium exports to China, with imports reaching 310,000 metric tons last month, reflecting a 91.6% increase compared to the same period in 2023. This surge follows bans on Russian metals imposed by the US and UK, prompting alternative sourcing arrangements. Additionally, aluminium premiums for shipments to Japan for July-September were quoted significantly higher, indicating robust demand and tight supply conditions in the market. Technically, the aluminium market experienced long liquidation with unchanged open interest at 3,038 contracts, alongside a modest price decline of 1 rupee. Currently, aluminium finds support at 230.4; a breach below this level could test 229.2. Resistance is anticipated around 232.6, with a potential breakout leading towards 233.6 if prices exceed this threshold.

Trading Ideas:
* Aluminium trading range for the day is 226.8-234.
* Aluminium dropped amid disappointing May industrial output from China.
* China aluminium production up 7.2 % to 3.65 mln tonnes in May
* China's May aluminium imports surge 61% year – on – year

Cotton

Cotton prices closed slightly lower yesterday, down by -0.18% to settle at 56,100, influenced by delays in shipments from major producers like the US and Brazil, which spurred demand for Indian cotton from mills in neighboring countries. This demand dynamic, coupled with a firm trend in cottonseed prices, supported natural fiber prices despite ongoing kharif 2024 season sowing in southern states of India. In India, the agricultural landscape is shifting with expectations of increased cotton acreage in Telangana due to some chili farmers transitioning to cotton amidst weaker prices for spices. Conversely, North India may see a reduction in cotton acreage due to challenges such as increased pest infestation and rising labor costs, impacting planting decisions. Internationally, the US cotton projections for 2024/25 show higher beginning and ending stocks, with unchanged production, domestic use, and exports. However, the season average upland farm price declined to 70 cents per pound, reflecting changes in new-crop cotton futures and adjustments in export estimates and ending stocks. On a global scale, the 2024/25 cotton balance sheet indicates increased beginning stocks, production, and consumption, with world trade remaining unchanged. Ending stocks are projected higher at 83.5 million bales due to adjustments in production and consumption figures across key producing regions like Burma, Vietnam, and others. Technically, the cotton market is experiencing long liquidation with open interest unchanged at 368 contracts while prices declined by -100 rupees. Currently, support for Cottoncandy is seen at 55,760, with a potential downside test towards 55,410. Resistance is likely at 56,480, and a break above could lead prices towards 56,850.

Trading Ideas:
* Cottoncandy trading range for the day is 55720-56780.
* Cotton gains amid delay in arrival of shipments from US, Brazil, triggers demand for Indian fibre.
* 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 maintained stability, closing unchanged at 18180 yesterday, as farmers refrained from selling their stocks in anticipation of further price increases. However, the upside potential was limited due to increased supplies at the end of the harvesting season. The current heat wave across India poses a threat to crop yields, exacerbating the supply crunch and potentially supporting prices if adverse weather conditions persist. The India Meteorological Department's forecast of more heat wave days than usual in May suggests ongoing challenges for agricultural productivity, particularly in turmeric-growing regions. The Ministry of Agriculture and Farmers’ Welfare’s estimate for the 2023-24 turmeric production is 10.74 lakh tonnes, down from 11.30 lakh tonnes the previous year, indicating a decline in output. Concurrently, demand has been subdued as high prices have led to demand destruction, forcing many consumers to adopt a hand-to-mouth approach. In terms of trade, turmeric exports in April 2024 totaled 14,109.09 tonnes, down 27.98% from April 2023 figures, while imports surged by 570.31% year-on-year to 3,588.11 tonnes in April 2024. This dynamic reflects shifting supply-demand dynamics in the global market. In the spot market, Nizamabad, a major trading hub, saw turmeric prices closing at 18233.5 Rupees, marking a modest gain of 0.32%. Technically, the turmeric market experienced long liquidation with unchanged open interest at 21,200 contracts, coupled with stable prices. Support levels are identified at 17930; a breach below could test 17680. Resistance is anticipated around 18340, with a potential breakout leading to testing of 18500. Market participants will continue to monitor weather updates and trade data closely for further insights into price movements in the upcoming sessions.

Trading Ideas:
* Turmeric trading range for the day is 17972-18872.
* Turmeric gains as farmers are holding back stocks in anticipation of a further rise.
* 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 18233.5 Rupees gained by 0.32 percent.


Jeera

Jeera prices remained unchanged yesterday, settling at 27,880 rupees per quintal, amidst strong domestic and export demand coupled with tight global supplies. The market has seen support from farmers holding back stocks in anticipation of better prices, contributing to stable price levels despite expectations of increased production this season. The outlook for jeera production in India points to a significant rise of 30% compared to the previous season, with estimates ranging between 8.5 to 9 lakh tonnes, driven by substantial increases in cultivation area in Gujarat and Rajasthan. Gujarat alone saw a notable 104% increase in sowing area, while Rajasthan witnessed a 16% rise. This surge in production contrasts with global trends where countries like China, Syria, Turkey, and Afghanistan are also ramping up cumin output in response to high prices seen in previous seasons. However, the influx of new supplies from these regions, expected in June and July, is likely to put downward pressure on prices. Additionally, reduced export trade in cumin has contributed to price softening, reflecting shifting dynamics in the global cumin market. In recent trade data, April 2024 saw a notable increase in jeera exports compared to both the previous month and the same period last year, highlighting robust international demand despite the domestic production outlook. The spot market in Unjha closed slightly higher at 28,965.25 rupees per quintal, up by 0.02% indicating stable local market sentiment. From a technical perspective, the jeera market is currently experiencing long liquidation, with open interest unchanged at 2,973 contracts despite prices holding steady. Support levels for jeera are identified at 27,110 rupees, with potential downside testing towards 26,340. On the upside, resistance is expected around 28,370, and a breakout above this level could push prices towards 28,860.

Trading Ideas:
* Jeera trading range for the day is 27840-28720.
* 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 28965.25 Rupees gained by 0.02 percent.

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