Gold 31295/Silver 42340 / Crude Oil 3237 / Copper 325.80 /Soyabean 3774/
Top Gainers
Natural Gas – gains 5.03% LTP – 196.10
Nickel – gains 3.94% LTP – 630.50
Zinc – gains 3.80% - 140.85
Top Losers
Gold – Losses 0.80% LTP – 31295.00
CPO – Losses 0.30% LTP – 506.50
MCX/ COMEX
Bullions
Gold falls 1% as Brexit fears take a breather
Gold prices fell on Tuesday, declining for the first time in three sessions as investor sentiment began to improve in wake of last week’s shock vote by the U.K. to leave the European Union.
The British pound, global stock markets and most risk-sensitive commodities were all higher on Tuesday as traders scooped up beaten down assets after Britain's vote to exit the EU stunned financial markets late last week.
Global equities suffered the largest two-day rout ever, as a wave of selling wiped around $3 trillion from markets.
Gold on the Comex division shed $8.70, or 0.66%, to trade at $1,316.00 a troy ounce.
Prices of the yellow metal surged to a 27-month peak of $1,362.60 last Friday, after a shock U.K. vote to exit the European Union sent investors flooding into bullion and other safe haven assets.
The news raised concerns that other countries might leave the union and that global growth would come under significant pressure, while the actual timeframe of the U.K. departure from the EU remained unclear.
In the latest blow for the U.K., ratings agency Standard & Poor's announced Monday that it had lowered the U.K.’s sovereign credit rating from "AAA" to "AA," citing last week's referendum. Meanwhile Fitch lowered its rating from AA+ to AA with a negative outlook.
European Union leaders will meet in Brussels later on Tuesday for the start of a two-day European Council summit to discuss Britain’s decision to leave the bloc.
Outgoing U.K. Prime Minister David Cameron is due to speak about the U.K.'s plans for exiting the now 28-member European Union.
Pressure was expected to be applied to the U.K. to trigger Article 50 which sets in motion the process of withdrawing from the EU.
Gold is up almost 25% so far this year, boosted by concerns over global growth and as market players all but ruled out further rate hikes by the Federal Reserve this year in the aftermath of Britain’s shock vote to leave the EU.
Market players payed little attention to data showing the U.S. economy grew by 1.1% in the first quarter, upwardly revised from a preliminary estimate of 0.8%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.6% at 95.97, off the previous session’s three-month highs of 96.86.
Energy
Oil extends bargain-hunting rally, jumps 3%
Oil prices extended hefty overnight gains in North American trade on Tuesday, rising for the first three in time sessions as investors scooped up beaten down assets after Britain's vote to exit the European Union stunned financial markets.
Oil prices lost more than 7% over the past two sessions, while global equities suffered the largest two-day rout ever, as a wave of selling wiped around $3 trillion from markets.
Brent oil climbed $1.28, or 2.68%, to trade at $49.05 a barrel.
Oil got a further boost amid concerns over supply disruption in Norway, where about 7,500 workers on seven oil and gas fields could go on strike from Saturday if a new wage deal is not agreed before a Friday deadline.
The affected fields account for nearly 18% of Norway's oil output, hitting production from the North Sea's top producer.
A day earlier, London-traded Brent futures sank to a seven-week low of $47.30 as investors dumped assets perceived as risky in the wake of the U.K.’s vote last week to leave the European Union.
The news sparked concerns that Europe will fall back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
Elsewhere, crude oil advanced $1.36, or 2.94%, to trade at $47.69 a barrel.
On Monday, New York-traded oil prices tumbled to $45.83, a level not seen since May 13.
Market players now looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 2.4 million barrels in the week ended June 24.
Natural gas futures jump to 10-month high amid rising temperatures
U.S. natural gas futures surged to a ten-month high on Tuesday, as forecasts for continued above-normal temperatures across most parts of the U.S. throughout most of summer raised expectations for power generation demand to meet air conditioning needs.
Updated forecasts released Monday said temperatures may be hotter than normal throughout most of the contiguous U.S. from July 8 through July 12.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
Natural gas rose to an intraday peak of $2.865 per million British thermal units, the most since August 13. It last stood at $2.825 up 8.4 cents, or 3.06%.
A day earlier, gas futures rose 4.7 cents, or 1.74%. Natural gas prices are up nearly 40% since late May as expectations have grown that hot summer weather will lead to heavy demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.Meanwhile, traders looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
The U.S. Energy Information Administration's storage report slated for release on Thursday is expected to show a build in a range between 43 to 53 billion cubic feet for the week ending June 24.That compared with builds of 62 billion cubic feet in the prior week, 73 billion a year earlier and a five-year average of 78 billion cubic feet. Total U.S. natural gas storage stood at 3.103 trillion cubic feet, 19.9% higher than levels at this time a year ago and 21.9% above the five-year average for this time of year.
Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
Base Metals
Copper is soaring, hits 7-week high
Copper prices soared to a seven-week high on Tuesday morning in London driven by growing expectations of monetary stimulus, a weakening US dollar and slightly more steady global markets.
The London Metal Exchange’s three-month copper contract was up 1.9% in midmorning European trade at $4,798 a tonne, after hitting earlier $4,800 a tonne — its highest level since May 6.
The sharp gain came even though markets continue to be affected by worries and uncertainty following Britain’s decision to leave the European Union.
Given its widespread use in the communication, transportation, manufacturing and construction industries, copper is perceived as a bellwether for the mining and metals sector as a whole.
Rumours of the US Federal Reserve delaying interest hikes until December are weighing on the dollar. When it falls, it makes US currency-denominated commodities (such as copper) cheaper for foreign companies, which in turn boosts demand.
The chance of monetary policy easing in China — responsible for nearly half of global metals demand — is also helping the industrial metal.
The result on the Brexit referendum won’t have major long-term implications on the copper market, unless it triggers a complete fall apart of the EU.
If that happens, economic turmoil will likely impact the metal, but — in the near-term demand from China is a far bigger concern.
Agri Commodity
India monsoon to end late, benefit farmers
Monsoon rains are likely to end in India later than usual this year, with plentiful showers towards the latter stages of the season helping farmers recover from two straight droughts, the chief of the country's weather office told Reuters on Friday. Monsoon rains are the lifeblood of India's agriculture-dependent economy and a week's delay in their onset this year has caused the planting of summer-sown crops such as cotton, rice, soybean and sugar cane to drop by nearly 24 percent. The monsoon has remained 15 percent lower than average in June, but the deficit is expected to narrow in the days to come, Laxman Singh Rathore of the Indian Meteorological Department said in an interview. The weather office forecasts monsoon rains to be above average this year after the droughts ravaged crops and worsened rural distress. (Source: Reuters)
Cotton area in Punjab, Haryana shrinks 27 per cent in 2016
Cotton area in Punjab and Haryana has declined 27 per cent to 7.56 lakh hectares in the 2016-17 crop year as farmers shifted to other crops after incurring huge losses due to whitefly pest attack last year. These two states had planted cotton in 10.3 lakh hectares in the 2015-16 crop year (July-June). "Sowing of cotton in Punjab and Haryana has been completed. Total area is down as farmers were scared to grow cotton fearing whitefly pest attack that had damaged the crop massively in these two states last year," a senior Agriculture Ministry official said. These states had advised cotton growers to complete the sowing operation timely before May 15 to avoid any whitefly infestation again. Farmers did not opt for cotton despite prices ruling high in the market at present. (Source: PTI)
Cardamom loses aroma on slow buying
Small cardamom prices declined at last week auctions, after moving up by around ₹150 a kg in less than a fortnight, following slow down in buying. At today’s auction held in Bodinayakannur by the Cardamom Planters’ Association, Santhanpara, the average price dropped to ₹729.85 a kg from ₹788.64 the previous Monday. Total arrivals stood at 24.1 tonnes and of this 19.8 tonnes were sold. The maximum price was at ₹1,030/kg. Total arrivals remained at moderately higher levels at 578 tonnes last week. Upcountry buyers were covering while exporters were inactive, PC Punnoose, General Manager, CPMC, told BusinessLine. Exporters were said to have bought an estimated 20 tonnes only. Good colour 8 mm bold capsules were fetching ₹1,150-75 a kg. Good bulk was being traded at ₹740-750 a kg. (Source: HBL)
Soyabean oil recovers from Brexit punch
Soyabean oil recovered from the Brexit fallout on Monday, albeit marginally. The commodity was up 1.49% at $748 per tonne in the international market. Crude palm oil, on the other hand, remained range bound and was at $645 per tonne as against $642 on Friday. Indian edible oil companies like Adani Wilmar felt that this recovery in international prices will not have much impact despite the rupee weakening against the dollar. "This level of price swing is normal and will not affect our imported bill much," Angshu Mallick, chief operating officer at Adani Wilmar, told ET. Adani Wilmar sells edible oil under the Fortune brand. Mallick said soya oil market should remain steady on the price front as sowing has picked up for oilseeds. (Source: ET)
Poor rain, imports push up chana prices by 10%
Chana prices remained firm due to lack of supplies and concerns of poor rains, say traders. Prices in wholesale market of chana increased by 10% in the past one week to Rs 76.85 a kg and were expected to remain firm. Similarly, prices of other pulses from arhar/tur to urad also remained firm. Since the past two months we are seeing prices firming up. Unless government takes up the initiative of importing larger quantities of over 25,000 tonnes pulses, prices will continue to increase. (Source: ET)
Technical Levels.
Gold
Gold has a support at 31200--31150 and resistance at 31450,
Three consecutive close + weekly close above 31450 will take it to 31750---31900 and then to 32000+ marks in days to come. Else it could test its support level of 31150.
Break and sustain below 31150 will take to 31000---30800 mark.
Silver
Silver has support at 42000 and resistance at 42450,
Break and sustain below 42000 will take to 41600---41200 mark. More and more downside panic will see only close below 40800 mark else it could test its resistance level of 42450 again
Close above 42450 will take to 42700---43000 mark
Three consecutive closes + weekly close above 43000 will see sharp upside rally in it
Trade with levels only
Crude oil
Support at 3180 and Resistance at 3270
Close below 3180 will take to 3050---3030 and then to 2900 mark in days to come
Hurdle intact at 3270
Traders can trade with levels only
Copper
Copper has support at 321 and resistance at 327.00,
Close above 327 will see further upside rally till 330---332 and then to 335+ mark in days to come, else could test its support level of 321
Trade with levels only
Soyabean (Oct)
Support at 3600 and Resistance at 3800
Fresh selling can initiate only close below 3600 mark. Three consecutive closes + weekly close below 3600 will take to 3450--3380 and then to 3250 mark in days to come else it could test its resistance level of 3800 again
Close above 3800 will see further upside rally till 3880---3940 mark. 3940 act as major hurdle in Soyabean
Trade with levels only
Our Recommendation on Blog
Natural Gas. Flared like anything and hit 195.90 mark. Told to buy above 187.
Still thinking to join us.
Follow our blog and app regularly and mint money from market.
Technical Pick
Buy Zinc around 140. Stop loss 138.50. Target 142---143.50++++
Economic Data
U.S Core PCE Price Index m/m – 06:00 P.M
U.S Personal Spending m/m – 06:00 P.M
U.S Personal Income m/m – 06:00 P.M
U.S Pending Home Sales m/m – 07:30 P.M
U.S Crude Oil Inventories – 08:30 P.M
More will update soon!!
