Gold 30416 / Silver 41505 / Crude Oil 3237 / Copper 311.05 / Soybean 3877
FOMC Updates
The Federal Reserve kept interest rates unchanged on Wednesday and signaled it still plans two rate increases this year, saying it expects the U.S. job market to strengthen after a recent slowdown. The U.S. central bank, however, lowered its economic growth forecasts for 2016 and 2017 and indicated it would be less aggressive in tightening monetary policy after the end of this year. Fed policymakers gave no indication of when they might raise rates, though their projections leave the door open to an increase next month.
"The pace of improvement in the labor market has slowed," the Fed said in a statement. It added, however, that "economic activity will expand at a moderate pace and labor market indicators will strengthen" even with gradual rate increases. Updated projections from Fed policymakers point to annual economic growth of only 2 percent for the foreseeable future, slightly lower than forecast at the March policy meeting.
Policymakers have been worried about potential weakness in the U.S. labor market and the possibility of financial turmoil if Britain votes next week to leave the European Union. The Fed statement on Wednesday made no reference to that vote.
"It's as dovish as the Fed can get without actually cutting rates.
Financial markets all but priced out a rate increase this year after the Fed statement, and U.S. short-term interest rate futures contracts rose. U.S. stocks held on to their pre-meeting gains.
The Fed left its target range for overnight lending rates between banks at between 0.25 percent to 0.50 percent, keeping on hold a campaign to lift borrowing costs that started late last year.
It raised rates in December for the first time in nearly a decade and signaled four increases were likely in 2016. Concerns about a global economic slowdown and volatility in financial markets subsequently reduced that number to two.
Although worries about the health of the global economy have eased, a sharp slowdown in U.S. hiring in May was unsettling. More recent data have indicated that last month's jobs report may have been a blip.
The Fed statement said economic activity appeared to have picked up since April.
West Texas Intermediate oil futures initially pared losses in North America trade on Wednesday, after data showed that oil supplies in the U.S. fell and gasoline inventories declined more than expected.
Crude oil for July delivery on the New York Mercantile Exchange lost 9 cents, or 0.14%, to trade at $48.40 a barrel compared to $47.88 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 0.933 million barrels in the week ended June 10. Market analysts expected a crude-stock decline of 2.26 million barrels, while the American Petroleum Institute late Tuesday reported a supply increase of 1.518 million barrels. Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 0.904 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 531.5 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year.”
The report also showed that gasoline inventories decreased by 2.625 million barrels, compared to expectations for a drop of 0.243 million barrels, while distillate stockpiles rose by 0.786 million barrels, compared to forecasts for a decline of 0.249 mill
MCX Copper Advances Almost 2% in the Evening Trades Prices of Copper tested a high of Rs 311.75 per kg and a low of Rs 305 per kg.
Agri Commodities
Monsoon in India: IMD forecast says relief for Jharkhand, Goa, others by weekend : The southwest monsoon on Tuesday further advanced into parts of West Bengal, the seven north-eastern states and Sikkim, India Meteorological Department (IMD) said in its latest weather bulletin.
Cotton acreage seen falling to 7-year low: Cotton planting in the country is likely to fall to the lowest in seven years in the 2016-17 marketing season, as farmers switch to other crops, potentially cutting production and exports of the fibre. India is the biggest producer of cotton in the world. A pest attack in key cotton growing states and forecasts of good monsoon rains are also prompting farmers to plant other crops such as sugarcane, peanut and pulses.
Mustard (rapeseed) prices have surged about 25 per cent since March 2016 on anticipation of strong winter demand, as supplies are going to be depleted in the coming months.
Exports of oilmeals during May 2016 is reported at only 7,737 tons compared to 121,339 tons in May 2015 - down by 94% according to data compiled by Solvent Extractors' Association of India.
The central government could impose a customs duty of 25 per cent on export of sugar. At present, there is presently no duty. “There is an increasing trend in the price of sugar in the international market. Traders might increase the export to make profit. To keep this in control, it is proposed to levy 25 per cent duty
Palm oil imports fell by 28 per cent to 657,454 tonnes in May, in view of higher stock availability and sluggish summer demand, industry body Solvent Extractors’ Association (SEA) said on Tuesday. India, the world’s leading vegetable oil buyer, had imported 907,347 tonnes of palm oil in May last year. Palm oil make up more than 65 per cent of the country’s total vegetable oil imports. In last few months, there has been a sharp rise in the import of cheap RBD palmolein. But last month, overseas purchase including RBD palmolein showed a decline “due to highest stock at port and pipeline and reduced demand due to summer,” SEA said.
Technical Levels for the day
Gold
Support at 30250---30100 and Resistance at 30600
Still looks positive and could test its resistance level of 30600 mark. Two consecutive closes above 30600 will see more upside rally till 30900---31050+ mark in days to come else it could test its support level of 30250---30100 again
Further downside panic will see only close below 30100 mark
Trade with levels only
Silver
Support at 41000 and Resistance at 41600
Close above 41600 will take to 42000---42300 and then to 43000+ mark in days to come else it could test its support level of 41000 again
Further downside panic will see only close below 41000 mark
Trade with levels only
Crude oil
Support at 3230 and Resistance at 3280---3300
Above 3300.. it could test 3340---3350.
Close below 3230 will take to 3180---3150 and then to 3080 mark. Double top figure target looks 3025.
Copper
Support at 310---305.50 and Resistance at 318
Either side break or close with volume will decide further. Till then trade with levels only
Soyabean
Not able to breach its support level of 3860 and bounced back again to 3970.
Now what to expect???
Two consecutive closes above 3980 will see upside rally till 4050---4080+ mark in days to come else it could test its support level of 3860 again
Further downside panic will see only close below 3860 mark
Trade with levels only
Technical Pick of the day
Buy Gold (Aug) above 30500 Stop loss below 30350 Target 30800+
Major Economic Data to be released
1. UK Retail Sales– 02 : 00 P.M
2. UK MPC Official bank rate – 04 : 30 P.M
3. UK Monetary Policy Summary – 04 : 30 P.M
4. UK Official Bank Rate – 04 : 30 P.M
5. US CPI m/m – 06 : 00 PM
6. US Core CPI m/m – 06 : 00 PM
7. US Philly Fed Manufacturing Index – 06:45 P.M
8. US Unemployment Claims – 06: 45 P.M
9. Natural Gas Inventory – 08 : 00 P.M
More will update soon during market hours. Keep visiting our Blog and App!!
