Gold 30275/Silver 41359 / Crude Oil 3357 / Copper 317.55 /Soyabean 3831/
Top Gainers
Copper – Gains 1.57 % LTP – 317.55
Zinc - Gains 1.03 % LTP – 137.45
Natural Gas – Gains 0.59 % LTP – 186.90
Top Losers
GOLD – Losses 1.37% LTP – 30275
CPO – Losses 1.21% LTP – 506.20
Silver - Losses 1.04% LTP - 41359
MCX/ COMEX
Gold fell sharply amid a stronger dollar, as Federal Reserve chair Janet Yellen reiterated on Tuesday that the U.S. central bank would maintain a cautious approach with future interest rate adjustments, producing little reaction from global equity, currency and bond markets.
With the considerable declines, Gold suffered its fourth straight losing session and it worst one-day loss in nearly a month. At session lows, On the Comex division Gold fell to its lowest level since June 10, erasing nearly all of its gains from a seven-day winning streak earlier this month. The precious metal has still surged more than 19% since the start of the year and is on pace for its strongest first half in more than a decade.
Yellen indicated that the Federal Open Market Committee (FOMC) remains hesitant to raise interest rates for the foreseeable future amid an uncertain global economic backdrop. Yellen's appearance marked her first public appearance since the FOMC held its benchmark Federal Funds Rate steady last week at a targeted range between 0.25 and 0.50%. Citing slow economic and financial developments in China and the euro area, subdued household formation, and meager productivity growth, Yellen said in prepared remarks that the FOMC expects the Fed Funds Rate to remain below its long-term outlook due to the temporary headwinds.
Last month in an appearance at Harvard University, Yellen indicated that the FOMC could raise short-term rates multiple times before the end of the year in the wake of improved labor market conditions and reduced global headwinds. However, the FOMC shifted their expectations and lowered their long-term rate outlook at last week's June monetary policy meeting following a disappointing national employment report in May when the economy added 38,000 nonfarm payrolls, its lowest monthly total in six years.
On Tuesday, Yellen told the Committee that the FOMC will be watching the job market carefully to see whether the recent slowing in employment growth is transitory. At the same time, Yellen said she expects temporary factors holding down inflation to abate. Last month, the Consumer Price Index (CPI) rose by 1% on an annual basis, far below the Fed's long-term target of 2%. While Yellen said the FOMC has the legal authority to push interest rates into negative territory, she emphasized that it is not something the Committee is "actively considering."
"Stronger growth or a more rapid increase in inflation than the Committee currently anticipates would likely make it appropriate to raise the federal funds rate more quickly," Yellen said. "Conversely, if the economy were to disappoint, a lower path of the federal funds rate would be appropriate. We are committed to our dual objectives, and we will adjust policy as appropriate to foster financial conditions consistent with their attainment over time."
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged more than 0.40% to an intraday high of 94.15, bouncing from one-week lows from Monday's session. The index is still down by more than 5% since early-December.
Oil prices were under pressure on Tuesday, snapping a strong two-day rally, as uncertainty about the Brexit referendum continued to preoccupy investors. Concerns over a possible Brexit lingered after a series of recent polls showed that voters remained evenly split ahead of Thursday's highly-anticipated vote.
A vote by Britain to leave the European Union may tip Europe back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
U.S. natural gas futures rose to a new nine-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 in the Midwest and eastern seaboard will be warmer than previously expected going into the July 4 holiday weekend.
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.
Agri Commodities
Monsoon covers Mumbai, set to hit Gujarat The monsoon is coming into its own along the West Coast as well the East with its northern limit advancing beyond Mumbai to Dahanu in Palghar district of Maharashtra on Monday. The rain over Central and East India is being spearheaded by a cyclonic circulation that moved in expectedly from the Bay of Bengal and that was parked over Vidarbha on Monday
Monsoon rains cover half of India; to accelerate sowing: Indian monsoon rains have covered nearly half of the country, the weather department said on Monday, accelerating planting of summer crops like paddy rice, soybeans, cotton and pulses. The June to September monsoon is crucial for farm output and economic growth in India, where just over half of arable land is fed by rain. The farm sector makes up about 15 percent of the $2-trillion economy that is Asia's third biggest. The sowing has been held up this year due to a delay in the arrival of monsoon rains, but now conditions are becoming favorable for further progress of the monsoon in central and western India, the weather office said in a statement. The monsoon has covered all southern and eastern states and nearly the whole of Maharashtra, the biggest producer of sugar and second biggest producer of cotton and soybeans.
Kharif sowing begins as monsoon finally hits north, central India: After a delay of eight days, the monsoons have finally hit most parts of Maharashtra and central India. With this, sowing of kharif crops like paddy, cotton, maize, oilseeds and pulses, is expected to gather pace. Sowing is expected to peak by the last week of June and first week of July. After hovering over Karnataka coast around June 10-18, the monsoons have covered most parts of Maharashtra and is expected to cover south Gujarat, parts of Madhya Pradesh, East Uttar Pradesh and Bihar in the next 48 hours. "There will be better rainfall during the next 15 days over central India," DS Pai, director (long range forecast), IMD, has said. As of June 17, kharif sowing was completed on 84.21 lakh hectares, which is 10% less than last year
India to create a buffer stock of pulses : The Indian government is negotiating with countries like Mozambique, Malawe, Canada and Myanmar, to buy pulses to end the chronic and recurring price rise, said Nirmala Sithraman, commerce and industry minister. Talking to members of the Indian women’s press corps (IWPC), Sithraman said that the government has decided to create a major buffer stock of pulses to bring down prices. For this, talks with Myanmar are on, she said. Earlier too, Myanmar had helped the Indian government when the prices of pulses soared. “The government eventually wants to create a buffer of eight lakh tonne of pulses,” she added. India produces 17 lakh tonne of pulses as against the requirement of 23 lakh tonne. “The Modi government is working on a strategy to bridge this gap,
Technical Levels
Gold
Clearly indicated gold is weak below 30400.
Now what to expect??
Support at 30000 and Resistance at 30450.
Below 30000 it will take to 29850--29700 mark. More and more downside panic will see only below 29700 mark else it could test its resistance level of 30450 again.
Further upside rally will see only close above 30450 mark
Trade with levels only
Silver
Support at 40800 and Resistance at 42000
Looks weak and could test its support level of 40800. Weekly close below 40800 will see more downside panic till 40500---40200 and then to 39800 else it could test its resistance level of 42000 again
Further upside rally will see only close above 42000 mark
Trade with levels only
Crude Oil
Above 3380... we will see further upside rally till 3420---3450 and then to 3480+ mark in days to come else it could test its support level of 3350 again.
Further downside panic will see only close below 3350 mark
Trade with levels only
Copper
Support at 312 and Resistance at 318
Either side break or close with volume will decide further. Till then traders can trade in a range with levels only and wait for confirmation.
Soya Bean
Support at 3800 and Resistance at 3860
Close above 3860 will see further upside rally till 3920 and then to 3980---4050 mark again else it could test its support level of 3800 again
Fresh selling can initiate only close below 3800 mark
Three consecutive closes + weekly close below 3800 will take to 3720---3650 mark in days to come
Trade with levels only
Our Recommendation on blog
Yesterday on our blog post we recommended to buy copper at 310 with stop loss of 305.50 …… copper flared and made high of 317.95 almost achieved our full target of 318.
Technical Pick of the day
Buy Zinc around 137. Stop loss 134.50. Target 140++
Major economic data to be released today
Canadian Core Retail Sales m/m – 06 : 00 P.M
Canadian Retail Sales m/m – 06 : 00 P.M
Fed Chair Yellen Testifies – 07 : 30 P.M
U.S Existing Home Sales – 07 : 30 P.M
Crude Oil Inventory – 08 : 00 P.M
More will update soon!!
