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Gold

Yesterday, gold prices declined by -0.45%, settling at 71,467 as investors awaited crucial US economic reports to gauge the Federal Reserve's interest rate trajectory. The key reports include the core PCE index, consumer spending and income data, the third estimate for Q1 GDP growth, and the goods trade balance. San Francisco Fed Bank President Mary Daly emphasized the need for confidence in inflation moving toward 2% before considering rate cuts. Investors are also keenly watching for insights from Fed Governors Lisa Cook and Michelle Bowman later this week. On the geopolitical front, uncertainties linger as Israeli Prime Minister Netanyahu's agreement to a "partial" cease-fire casts doubt on the US-backed proposal to end the 8-month Gaza conflict. Additionally, gold imports to China via Hong Kong plummeted by 38% in April from the previous month, highlighting a significant drop in demand. Physical bullion demand in India, the world's second-largest gold consumer, has also slowed due to near-record high prices, reducing retail purchases outside the festival season. Indian dealers offered discounts of up to $13 per ounce over official domestic prices, compared to $10 last week. In China, premiums ranged from $18 to $25 per ounce, slightly lower than the previous week. Seasonal factors are expected to keep Chinese demand subdued. In other markets, Singapore and Hong Kong saw gold sold at par to small premiums, while in Japan, premiums were slightly lower at par to $0.5. Technically, the market is under long liquidation, with a 1.34% drop in open interest to 14,165 and a price decrease of 324 rupees. Gold finds support at 71,255, with a potential test at 71,035 if breached. Resistance is anticipated at 71,805, and a move above this level could push prices to test 72,135.
 

Trading Ideas:
* Gold trading range for the day is 71035-72135.
* Gold fell as investors await US economic reports for clarity on Fed’s timeline for interest rate cuts.
* Fed’s Daly stated that she does not think the US central bank should lower rates until policymakers are confident that inflation is moving towards 2%.
* U.S. business activity crept up to a 26-month high in June but price pressures subsided considerably.


Silver
Silver prices fell by -2.32% to settle at 86937, tracking weakness in other precious metals as market caution prevailed ahead of the US PCE inflation data. This data is pivotal for shaping the Federal Reserve's monetary policy outlook. Precious metals have faced pressure due to uncertainties about interest rate cuts, with the US Fed unlikely to slash rates as aggressively as markets had hoped. San Francisco Fed President Mary Daly emphasized that rates should not be cut until there is confidence that inflation is moving towards the 2% target, although some policymakers are noting increasing risks to the economy. The U.S. Commerce Department's upcoming report on personal income and spending, which includes the Fed's preferred inflation readings, is highly anticipated. The final GDP data for Q1 2024 is due on Thursday, and a strong report could pressure the Fed to consider further tightening. Geopolitically, attention is on the first U.S. presidential debate between Joe Biden and Donald Trump, and the beginning of the French election campaign. Meanwhile, India's silver imports in the first four months of the year have surpassed the total for all of 2023 due to rising demand from the solar panel industry and investor bets on silver outperforming gold. India imported a record 4,172 metric tons of silver from January to April, up from 455 tons in the same period last year. Technically, the market is under long liquidation with a -9.27% drop in open interest to 14,696 contracts, while prices decreased by -2062 rupees. Silver finds support at 86045, with a potential test at 85155 if this level is breached. On the upside, resistance is expected at 88490, and a move above this level could see prices testing 90045.
 

Trading Ideas:
* Silver trading range for the day is 85155-90045.
* Silver dropped as caution dominated sentiment ahead of US PCE inflation data this week.
* 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 fell by -0.75%, closing at 6771, pressured by a stronger dollar and investor anticipation of upcoming U.S. inflation data. Despite this decline, geopolitical tensions in the Middle East, particularly Israeli advances into Gaza and fears of a potential conflict with Hezbollah, continued to raise concerns about oil supply disruptions. The market sentiment has been buoyed by robust global demand growth forecasts from OPEC, the IEA, and the US EIA, all predicting solid oil demand growth for the latter half of the year. Additionally, key OPEC+ members, including Russia and Iraq, have reaffirmed their commitment to production quotas. Saudi Arabia has also signaled its readiness to adjust output based on market conditions, further supporting prices. Investor confidence improved after OPEC+ announced plans to increase production from October, anticipating stronger future demand. U.S. Energy Information Administration (EIA) data revealed a 2.547 million barrel drop in crude oil stocks for the week ending June 14, surpassing market expectations of a 2 million barrel decline. Gasoline stocks fell by 2.28 million barrels against an expected rise of 1.10 million, and distillate stockpiles decreased by 1.726 million barrels, contrary to the anticipated 1 million barrel increase. Conversely, crude stocks at the Cushing, Oklahoma, delivery hub rose by 0.307 million barrels, following a previous week’s draw of 1.593 million barrels. Technically, the market is experiencing long liquidation, with a notable 8.55% drop in open interest to 4513 as prices declined by 51 rupees. Crude oil currently finds support at 6738, with a potential further test at 6705 if breached. Resistance is anticipated at 6817, and surpassing this level could see prices testing 6863.
 

Trading Ideas:
* Crudeoil trading range for the day is 6705-6863.
* Crude oil prices edged lower pressured by a stronger dollar
* U.S. crude and gasoline inventories fall
*  U.S. oil demand on the rise as summer begins


Natural gas
Natural gas prices declined by -0.58% to settle at 240.7, influenced by increased output and lower demand forecasts over the next two weeks, despite a severe heatwave affecting much of the United States. Gas output in the Lower 48 U.S. states increased to an average of 98.5 billion cubic feet per day (bcfd) in June, up from a 25-month low of 98.1 bcfd in May, and approaching the record high of 105.5 bcfd set in December 2023. However, on a daily basis, output was set to decrease by about 3.0 bcfd to a preliminary one-week low of 97.4 bcfd, down from an 11-week high of 100.4 bcfd recorded on Monday. Analysts often note that preliminary output figures are revised upward later in the day. Meteorologists predict that weather across the Lower 48 states will remain hotter than normal through at least July 10, which should increase the demand for natural gas as power generators burn more to meet the heightened demand for air conditioning. U.S. utilities added 74 billion cubic feet of gas into storage during the week ending June 7, 2024, slightly below market expectations of 75 billion cubic feet. This increase brought stockpiles to 2,974 Bcf, which is 364 Bcf higher than last year and 573 Bcf above the five-year average of 2,401 Bcf. Technically, the market is under fresh selling pressure, with open interest increasing by 5.52% to 15,994 contracts as prices fell by -1.4 rupees. Natural gas finds support at 237.5, with a potential test of 234.4 if this level is breached. On the upside, resistance is expected at 245.2, with a move above this level potentially driving prices to 249.8.
 

Trading Ideas:
* Naturalgas trading range for the day is 234.4-249.8.
* Natural gas slid amid increase in output and forecasts for less demand
* Speculators increased net long futures and options positions on the New York Mercantile and Intercontinental Exchanges.
* Gas output in Lower 48 U.S. states rose to an average of 98.5 billion cubic feet per day in June.


Copper
Copper prices declined by -1.06% to settle at 838.9 yesterday amid notable increases in deliveries to London Metal Exchange (LME) warehouses, which have seen stocks rise sharply since mid-May. Inventories in Shanghai Futures Exchange warehouses decreased but remain elevated compared to earlier in the year. This surplus in LME stocks has driven cash copper to trade at a record discount of approximately $135 per ton against the three-month contract, reflecting ample supply conditions. Geopolitically, concerns over industrial metals persist amidst growing protectionism, exemplified by the EU's plans to impose tariffs on Chinese-made electric vehicles. China's response includes increased imports of copper scrap as an alternative to scarce ore, while maintaining a supportive monetary policy stance to stabilize economic conditions. Despite supportive measures, including flexible use of interest rates and reserve requirements, China kept its key lending rates unchanged due to narrow interest rate margins and currency pressures. Meanwhile, China's refined copper production in May showed a modest 0.6% increase year-on-year, indicating steady domestic output amid global market dynamics. The International Copper Study Group reported a surplus of 13,000 metric tons in the global refined copper market for April, down from 123,000 tons in March. Importantly, China's unwrought copper imports surged by 15.8% year-on-year in May to 514,000 metric tons, despite weaker physical consumption trends. Technically, copper futures are witnessing fresh selling pressure with a 7.97% increase in open interest, settling at 9168 contracts. Prices face support at 834, with a potential downside test at 828.9, while resistance is positioned at 848.4, with a breakout potentially targeting 857.7.
 

Trading Ideas:
* Copper trading range for the day is 828.9-857.7.
* 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 edged up by 0.39% to settle at 258.35 amid optimism surrounding improved demand in China following recent price declines and supply constraints. The slowdown in industrial output in China during May, coupled with contractionary manufacturing PMI figures, underscored weaker industrial demand trends in the world's leading consumer of metals like copper and zinc. Sentiment received a boost from China's central bank reaffirming its supportive monetary stance and commitment to stabilizing exchange rates. 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, Globally, zinc mine production has continued to decline, falling 2% in 2022, another 1% in 2023, and down 3% year-on-year in Q1 2024, as reported by the International Lead and Zinc Study Group (ILZSG). This supply squeeze has been exacerbated by the restart of idled smelter capacity in Europe, reducing available concentrates on the spot market. Meanwhile, London Metal Exchange (LME) stocks rebounded significantly from 30,475 tons in 2023 to 255,900 tons currently, reflecting increased market activity and inventory management strategies. Despite these movements, the global zinc market surplus narrowed to 22,100 metric tons in April from 70,100 tons in March, with a surplus of 182,000 tons in the first four months of the year compared to 282,000 tons in the same period last year. Technically, the zinc market experienced fresh buying interest with a 1.57% increase in open interest to 2,269 contracts as prices rose by 1 rupee. Support levels are identified at 257.3, with potential downside testing at 256.1. Resistance is anticipated at 259.7, with a breakout above possibly pushing prices towards 260.9.
 

Trading Ideas:
* Zinc trading range for the day is 256.1-260.9.
* 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 retreated by -0.44% to settle at 228.3 amid persistent capital outflows from China and disappointing macroeconomic data, which weighed on market sentiment. China, a major player in the aluminium market, faced challenges as its economic indicators continued to underperform, with limited policy support measures exacerbating concerns. Inventories monitored by the Shanghai Futures Exchange increased by 2.0% week-on-week as of June 14, reflecting ongoing supply dynamics within China. Meanwhile, the US Manufacturing PMI provided a slight positive note, rising to a three-month high of 51.7 in June from 51.3 in May, surpassing expectations of 51, indicating modest expansion in the sector. China maintained its key benchmark lending rates unchanged, highlighting constraints in its monetary easing efforts due to narrowing interest rate margins and a weakening currency. Despite global primary aluminium output rising by 3.4% year-on-year to 6.1 million tons in May, led by a 7.2% increase in China to 3.65 million tons, the market remains pressured by increased imports. China's aluminium imports surged by 61.1% in May year-on-year, with a notable rise attributed to heightened shipments from Russia amid sanctions imposed by Western countries. Russia significantly increased its aluminium exports to China, particularly after bans on Russian metals by US and UK exchanges in April. From January to April this year, China imported 500,741 tons of primary aluminium from Russia, marking a 91.6% increase from the same period last year. Technically, the aluminium market experienced fresh selling pressure with a modest 0.81% increase in open interest to 4,369 contracts as prices declined by -1 rupee. Support levels are identified at 227.5, with potential downside testing at 226.5. Resistance is anticipated at 229.8, and a breakout above this level could lead prices to test 231.1.
 

Trading Ideas:
* Aluminium trading range for the day is 226.5-231.1.
* Aluminium dropped as China’s macroeconomic data continues to disappoint
* 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
Cotton prices, represented by Cottoncandy, rose by 1.1% to settle at 58,890 amid disruptions in shipments from major producers like the US and Brazil, boosting demand for Indian cotton from mills in neighboring countries. This uptick in prices was also supported by a firm trend in cottonseed prices, despite the ongoing sowing for the kharif 2024 season in southern states like Karnataka, Telangana, and Andhra Pradesh, which have started receiving monsoon rains. In India, the cotton acreage outlook for 2024 is mixed. While Telangana anticipates an increase in cotton planting due to shifts from other crops like chillies, North India faces challenges with decreased acreage attributed to pest issues and rising labor costs. Internationally, the US cotton projections for the 2024/25 season show higher beginning and ending stocks, with unchanged production, domestic use, and exports. The season average upland farm price is forecasted lower at 70 cents per pound due to declines in new-crop cotton futures. Global balance sheets for cotton in 2024/25 reflect increased beginning stocks, production, and consumption, with stable world trade. Ending stocks are projected higher at 83.5 million bales. Technically, the cotton market saw short covering as open interest dropped by -0.28% to 361 contracts, while prices surged by 640 rupees. Support levels for Cottoncandy are identified at 58,360, with potential downside testing at 57,830. Resistance is expected at 59,210, and a breakthrough above this level could lead to further gains toward 59,530. Investors and traders will continue to monitor these factors closely for potential impacts on future price trends in the cotton market.
 

Trading Ideas:
* Cottoncandy trading range for the day is 57830-59530.
* 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 strengthened by 1.03% to settle at 17,410 amid strategic holding of stocks by farmers anticipating further price increases. However, the upside potential was tempered by increased supplies towards the end of the harvesting season. The prevailing heat wave across India poses a significant threat to crop yields, potentially exacerbating the supply shortage and supporting price levels. The India Meteorological Department's forecast of continued hot weather suggests little relief in the near term, with expectations of more heat wave days than usual. The Ministry of Agriculture and Farmers’ Welfare's estimate for 2023-24 anticipates turmeric production at 10.74 lakh tonnes, down from 11.30 lakh tonnes the previous year, indicating a decrease in output. This reduction in production, coupled with demand destruction due to higher prices, has influenced market dynamics. Regions like Sangli, Basmat, and Hingoli are experiencing robust demand for quality turmeric amid expectations of increased sowing area in the current year. On the trade front, turmeric exports in April 2024 totaled 14,109.09 tonnes, down 19.07% from March 2024 and 27.98% from April 2023. Conversely, imports surged in April 2024 to 3,588.11 tonnes, marking a significant increase of 192.36% from March 2024 and 570.31% from April 2023 levels, highlighting shifting trade dynamics. In the major spot market of Nizamabad, turmeric prices closed at 17,946.4 Rupees, reflecting a minor decline of -0.18% from previous levels. Technically, the turmeric market observed fresh buying interest with a 0.35% increase in open interest to settle at 21,430 contracts. Prices rose by 178 rupees, with support identified at 17,120 and potential downside testing at 16,830. Resistance is expected at 17,590, and a breakout above this level could lead prices towards 17,770.
 

Trading Ideas:
*  Turmeric trading range for the day is 16830-17770.
* Turmeric 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 17946.4 Rupees dropped by -0.18 percent.


Jeera
Jeera prices closed higher by 0.63% yesterday, settling at 29,620 amid strong domestic and export demand coupled with tight global supplies. The market saw support from farmers withholding stocks in anticipation of better prices, contributing to the upward momentum. However, the upside was capped by expectations of higher production this season, which could potentially exert downward pressure on prices. India is expected to witness a substantial increase in jeera production, projected to rise by 30% this season to between 8.5-9 lakh tonnes. This surge is primarily driven by a significant expansion in cultivation areas, with Gujarat and Rajasthan notably increasing their sowing areas by 104% and 16% respectively. Globally, the production outlook for cumin has also improved, with countries like China, Syria, Turkey, and Afghanistan ramping up production in response to high prices from previous seasons. This influx of new supplies, expected around June and July, may lead to a correction in prices despite current market strength. On the export front, India's jeera exports showed resilience, with significant increases year-on-year. In April 2024 alone, exports rose by 133.55% compared to April 2023, reflecting robust international demand despite the price volatility. Analysts anticipate a rebound in export volumes for 2024, supported by increased production and more competitive international prices. Technically, the jeera market observed fresh buying interest, evidenced by a 0.65% increase in open interest alongside a price rise of 185 rupees. Key technical levels indicate support at 29,110, with a potential downside test at 28,600. Resistance is anticipated at 30,090, and a breakout above could lead to further gains towards 30,560.
 

Trading Ideas:
* Jeera trading range for the day is 28600-30560.
* 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 29920.8 Rupees dropped by -0.18 percent.

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