Gold 31850/Silver 46847/ Crude Oil 3065/ Copper 319.00 /Soyabean 3799/
Top Losers
Crude Oil – losses – 4.16% LTP – 3065
Nickel – Losses 3.94% LTP – 654.10
Silver – Losses – 1.97% LTP – 46847.00
Commodity Round UP
Bullions
Gold falls mildly, ahead of key jobs report amid strong employment data
Gold fell slightly on Thursday, taking a brief pause from its scorching, post-Brexit winning streak, as a favorable payroll indicator sent a strong harbinger for a critical U.S. jobs report at week's end.
On the Comex division Gold traded between $1,352.00 and $1,372.50 an ounce, before settling at $1,361.60, down $5.50 or 0.40% on the session. It came one session after Gold surged to a fresh 28-month high amid continuing Brexit-related concerns, after several U.K. property funds halted redemptions due to "exceptional liquidity pressures." Since polls closed in the historic referendum two weeks ago, the safe-haven asset has surged more than 7%. More broadly, Gold has jumped by nearly 30% year-to-date as investors have engaged in a flight to safety from high-risk equities, due primarily to signs of a global economic slowdown and a delayed interest rate hike from the Federal Reserve.
Gold likely gained support at $1,323.50, the low from June 8 and was met with resistance at $1,391.40 the high from March 17, 2014.
On Thursday morning, ADP said in its monthly employment report that nonfarm payrolls rose by 172,000 in June, above May's revised total of 168,000 and considerably higher than consensus estimates of 150,000. Last month's revised total from the payroll services firm contrasts sharply from May's government report, which showed an increase of 38,000, the lowest monthly increase in nearly six years. Analysts expect that the report from the U.S. Department of Labor will show monthly job gains of 180,000, its highest total in three months. Economists expect a rebound following the return of approximately 35,000 Verizon workers, which were on strike in June during a labor dispute.
While Federal Reserve chair Janet Yellen has emphasized the importance of not placing an undue amount of weight on a single report, the Federal Open Market Committee (FOMC) characterized the slowing labor market as a factor for holding interest rates steady at its monetary policy meeting last month. Prior to the disappointing report, Yellen said at a speech at Harvard University in late-May that it could be appropriate to raise interest rates in the coming months. Since then, the FOMC lowered its long-term rate outlook while markets have taken a 2016 rate hike off the table entirely.
Investors who are bullish on Gold are in favor of a gradual tightening of monetary policy by the Fed. Gold, which is not attached to interest rates, struggles to compete with high-yield bearing assets in rising rate environments.
The Sterling Pound hit an intraday high of 1.3047 on Thursday, one day after plunging to a fresh 31-year low at 1.2798. In February, 1985, the Pound touched a record-low against its American counterpart at 1.05.
Since voters in the U.K. resoundingly approved a referendum to leave the EU late last month, investors have piled into safe-haven assets such as Gold, government bonds and the Japanese Yen while engaging in broad risk-off trade.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.20% to an intraday high of 96.35. Although the index is up by more than 2.5% since the Brexit referendum, it is still down by approximately 4% from its December highs.
Dollar denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Energy
Oil falls after U.S. reports crude draw down within forecasts
Oil prices turned negative on Thursday after the U.S. government reported a weekly crude draw that was within analysts' forecasts, disappointing the bulls in the market who had expected larger declines.
Brent crude futures were down 70 cents, or 1.4 percent, at $48.10 per barrel by 11:04 a.m. EDT (1504 GMT). It rose 1.6 percent earlier to a session high of $49.59.
U.S. crude futures were down 63 cents, or 1.2 percent, to $46.80.
The Energy Information Administration (EIA) said crude stockpiles fell 2.2 million barrels for the week ended July 1, drawing for a seventh week in a row.
The EIA's figure came in just below the decline of 2.3 million barrels forecast by analysts in a Reuters poll but far less than the 6.7 million-barrel draw reported by trade group the American Petroleum Institute late Wednesday.
Natural gas futures extend gains after bullish weekly storage data
U.S. natural gas futures extended gains in North America trade on Thursday, after data showed that natural gas supplies in storage in the U.S. rose less than expected last week.
Natural gas jumped 4.4 cent, or 1.58%, to trade at $2.830 per million British thermal units. Prices were at around $2.810 prior to the release of the supply data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended July 1 rose by 39 billion cubic feet, below forecasts for an increase of 43 billion.
That compared with builds of 37 billion cubic feet in the prior week, 87 billion a year earlier and a five-year average of 77 billion cubic feet.
Total U.S. natural gas storage stood at 3.179 trillion cubic feet, 16.9% higher than levels at this time a year ago and 18.8% above the five-year average for this time of year.
Meanwhile, updated weather forecasting models showed that temperatures may be mostly normal in the lower 48 states from July 15 through July 19.
Prices are up nearly 50% since late May as expectations have grown that hot summer weather will lead to heavy demand.
Gas futures jumped to $2.998 last week, the highest since May 2015, as hot summer temperatures across most parts of the U.S. raised expectations for power generation demand to meet air conditioning needs.
A rally for natural gas this time of year isn't unusual. 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.
Agri commodity
Monsoon rainfall up by 1 per cent so far: IMD
The Southwest monsoon rainfall has shown a marginal rise of one percent with a good amount of precipitation in several parts of the country for the period between June 1 and July 6, IMD has said. All regions, barring the east and northeast have started recording monsoon above
the normal. Only the northeast and east India region are currently witnessing a deficiency. According to IMD, the country as a whole received 218.2 mm of rainfall as compared to 215.3 mm, which is 1 per
cent more than the normal precipitation the country receives from June1 to July 6. (Source: PTI)
Pulses output may touch 20 mt in 2016-17
After two years of deficit, India’s pulses output is likely to rise 18 per cent to around 20 million tonnes (mt) in 2016-17, which could ease the pressure on prices. However, in the interim, the Centre has planned to import 200,000 tonnes of arhar from Mozambique. It is also looking to
import a similar quantity of urad from Myanmar either on governmentto-government basis or through agreement with private trade bodies.
The government is importing pulses at minimum support price (MSP) plus cost to ensure domestic farmers are not disincentivised. “We are committed to keeping pulses prices under check this year and the Centre is doing everything possible to bridge the demand and supply gap which
has widened due to production shortage in 2015-16,” Food Minister Ram Vilas Paswan told reporters. Pulses output declined to 17.15 mt in 2014- 15 crop year from 19 mt in the previous year owing to drought. In 2015- 16, pulses output further dipped to 17.06 mt on poor monsoon. Annual
domestic demand is pegged at 23.5 mt. (source: BS)
Cotton planting picks up, but acreage may fall
With the monsoon covering most cotton-growing regions of the country, planting across Maharashtra, Gujarat, Telangana and Andhra Pradesh has picked up pace and farmers are trying to complete sowing operations
before the cut-off dates. Significantly, there has been a major dip in demand for Bt cotton and farmers across the country have shown a marked preference for locally-grown varieties. “The pace of sowing operations is pretty dynamic and as against the usual 40 lakh hectares that comes under cotton plantation in Maharashtra, it remains to be
seen how much area actually comes under cotton since several farmers are also opting for pigeon pea (arhar or tur dal). The cut-off date for cotton sowing is around July 10 and can be extended to July 15, after which the growth of cotton becomes stunted. (source: FE)
India's June oilmeal exports down by 48%
Oilmeal exports fell by 48 per cent to 88,514 tonnes last month due to tight local supply of oilseeds and continuous price disparity in the global market, industry body SEA said today. The country had shipped 1,69,699 tonnes of oilmeal, used as an animal feed, in June last year. Even during
the April-June quarter of current fiscal, the overall export of oilmeals declined by 61 per cent to 1,86,293 tonnes compared to 4,73,676 tonnes in the year-ago period, the Mumbai-based SEA said in a statement. Out
of the total exports, a maximum of 76,775 tonnes of oilmeal was shipped to South Korea in June, followed by Vietnam at 4,158 tonnes, Indonesia at 2,070 tonnes and Thailand at 1,595 tonnes. South Korea and Vietnam
are the top two destinations for export of oilmeal for India. (Source: PTI)
Malaysia palm oil stocks seen rising in June, 1st gain in 7 months
Malaysia's palm oil inventories likely rose for the first time in seven months in June due to a seasonal jump in production and waning demand for exports during the month of Ramadan. Higher stocks in the world's No.2 palm oil producer after Indonesia could drag on benchmark
prices of the tropical oil, which are mired near 7-month lows of 2,317 ringgit ($578.38) per tonne amid forecasts for rising output. (source: Reuters)
Corn, soybean futures tumble anew as La Nina fears subside
Corn futures tumbled to fresh contract lows, and soybean prices extended nearly to 10% their losses this week already, as improved US weather prospects eased La Nina fears and prompted a further scramble to sell. Corn futures for December, the best-traded lot, touched $3.46 a
bushel at one point – taking to 23% their plunge from a June 17 high. "As the old saying goes, prices take the staircase up, but the elevator down," said Don Roose, president at Iowa-based broker US Commodities. Benchmark soybean futures for November dropped more than 3% to $10.42 a bushel, putting them on course for their first close beneath
their 50-day moving average in three months. (Source: AM)
Technical Levels.
Gold
Support at 31750---31600 and Resistance at 32280
Below 32000 will take to 31750---31600 mark. Further downside panic will see only weekly close below 31600 mark else it could test its resistance level of 32280 mark again
Trade with levels only
Silver
Support at 46750 and Resistance at 48400---49000
It looks weak and could test it support level of 46750. Three consecutive closes + weekly close below 46750 will confirm double top pattern on four hourly chart pattern and we will see sharp downside panic till 45300---44800 mark in days to come else it could test its resistance level of 48400---49000 mark again
Upper side now seems limited in Silver but we will expect high volatility in it. So traders can trade safely with levels only and wait for confirmation
Crude oil
Support at 3030 and Resistance at 3100
Break and sustain below 3030 will take to 2950---2930 and then to 2900 mark in days to come else it could test its resistance level of 3100 again
Further downside panic will see only close below 2900 mark
Copper
Support at 318 and Resistance at 326
Close and sustain below 318 will take it to 315--313 levels else could test its resistance level of 326 again.
Further upside rally will see only close below 326 mark
Trade with levels only
Soyabean
Support at 3780 and Resistance at 3850
Looks negative and could test its support level of 3780. Weekly close below 3780 will see downside panic till 3700----3660 mark in days to come.
Trade with levels only
Technical Pick
NCDEX : Sell Soyabean Below 3780, Stop loss 3850, Target 3700
Economic Data
Canadian Employment Change – 06:00 P.M
Canadian Unemployment Rate– 06:00 P.M
Average Hourly Earnings m/m – 06:00 P.M
Non-Farm Employment Change – 06:00 P.M
Unemployment Rate – 06:00 P.M
