XAU/USD Current price: $2,292.40

• Federal Reserve’s speakers keep cooling hopes for multiple rate cuts this year.
• Investors are now waiting for the United States March Nonfarm Payrolls report.
• XAU/USD could extend its near-term decline, but bulls still hold the grip.

Spot Gold kept rallying on Tuesday, peaking at the beginning of the day at $2,304.81 a troy ounce, a fresh record high. The bright metal benefited from the broad US Dollar’s weakness as Federal Reserve (Fed) officials aligned beyond Chairman Jerome Powell and worked on cooling hopes for soon-to-come rate cuts. Despite the central bank having maintained three potential cuts in the dot plot, market players are now hoping for two in the best-case scenario.

Fed Chair Powell made it clear that policymakers are in no rush to cut rates, particularly considering the economic strength, inflation still above target, and the tight labor market. Speaking of which, the United States (US) is heading into publishing the March Nonfarm Payrolls report on Friday. The country is expected to have added 200K new job positions in the month, while the Unemployment Rate is foreseen unchanged at 3.9%. A better-than-anticipated outcome will help the USD recover ground ahead of the weekly close, although softer-than-expected figures could push XAU/USD beyond the mentioned record high.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it finally gave up some ground after rallying for seven straight days. The case for a bearish correction gains strength as technical indicators started retreating from extreme overbought levels. An interim top can not be confirmed yet. The pair is still developing well above bullish moving averages while consolidating near its recent highs. XAU/USD may well resume its advance after giving up some ground.

The 4-hour chart also supports the case of an upcoming bearish correction. The pair shed some ground, leading to technical indicators leaving overbought territory. The Momentum indicator heads firmly south, approaching its 100 line from above, although the Relative Strength Index (RSI) indicator turned flat at 65, the latter suggesting limited selling interest. Furthermore, XAU/USD keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) losing its bullish strength but still heading north far above the longer ones.

Support levels: 2,277.60 2,261.30 2,250.70  

Resistance levels: 2,295.10 2,310.00 2,325.00

XAU/USD Current price: $2,292.40

• Federal Reserve’s speakers keep cooling hopes for multiple rate cuts this year.
• Investors are now waiting for the United States March Nonfarm Payrolls report.
• XAU/USD could extend its near-term decline, but bulls still hold the grip.

Spot Gold kept rallying on Tuesday, peaking at the beginning of the day at $2,304.81 a troy ounce, a fresh record high. The bright metal benefited from the broad US Dollar’s weakness as Federal Reserve (Fed) officials aligned beyond Chairman Jerome Powell and worked on cooling hopes for soon-to-come rate cuts. Despite the central bank having maintained three potential cuts in the dot plot, market players are now hoping for two in the best-case scenario.

Fed Chair Powell made it clear that policymakers are in no rush to cut rates, particularly considering the economic strength, inflation still above target, and the tight labor market. Speaking of which, the United States (US) is heading into publishing the March Nonfarm Payrolls report on Friday. The country is expected to have added 200K new job positions in the month, while the Unemployment Rate is foreseen unchanged at 3.9%. A better-than-anticipated outcome will help the USD recover ground ahead of the weekly close, although softer-than-expected figures could push XAU/USD beyond the mentioned record high.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it finally gave up some ground after rallying for seven straight days. The case for a bearish correction gains strength as technical indicators started retreating from extreme overbought levels. An interim top can not be confirmed yet. The pair is still developing well above bullish moving averages while consolidating near its recent highs. XAU/USD may well resume its advance after giving up some ground.

The 4-hour chart also supports the case of an upcoming bearish correction. The pair shed some ground, leading to technical indicators leaving overbought territory. The Momentum indicator heads firmly south, approaching its 100 line from above, although the Relative Strength Index (RSI) indicator turned flat at 65, the latter suggesting limited selling interest. Furthermore, XAU/USD keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) losing its bullish strength but still heading north far above the longer ones.

Support levels: 2,277.60 2,261.30 2,250.70  

Resistance levels: 2,295.10 2,310.00 2,325.00

ChiniMandi, Mumbai: 4th April 2024

Domestic Market

Domestic sugar continue to trade stable

Domestic sugar prices in major markets were said to be stable following a mixed session yesterday. However, with a higher monthly quota, they are likely to face additional pressure in the coming days. Furthermore, demand in the major markets is expected to be weak, putting prices under pressure.

In Muzaffarnagar, M-grade sugar costs between Rs 3,770 and Rs 3,800 per quintal, whereas S-grade sugar is expected to cost between Rs 3,420 and Rs 3,450. Agrimandi expects the price of S grade sugar in the Kolhapur market to fall to between Rs 3,380 and Rs 3,460 per quintal within the next two weeks.

Ex-mill Sugar Prices as on  April, 4 2024 :

Destination-wise Spot Prices as on April, 4 2024 :

 

International Market

At the time of writing this update London White Sugar #5 front month contract is trading at $651.90 ton, whereas the New York Sugar #11 front month contract is trading at 22.41 c/lb.

Currency, Commodity & Indian Indices

The rupee traded against the US dollar at 83.430 whereas USD was trading with BRL at 5.0367, Crude futures traded at ₹7121, Crude WTI traded at $85.45 barrel. Sensex closed 350.81 points higher at 74227.63 whereas Nifty ended 80.00 points higher at 22514.65

News Round-Up

Thailand’s sugar production reported above February estimate

Thailand’s sugar production reported above February estimate

 

Over 20 sugar mills revived, five new ones set up during BJP’s Rule: Amit Shah

BSF thwarts another sugar smuggling attempt in Bangladesh

Sweltering heat grips multiple regions, maximum temperatures soar to 40 to 42°C in several areas

 

The Punjab government has approved Wheat Procurement Policy 2024-25 under which the provincial cabinet fixed the minimum support price of wheat for the year 2023-2024 at Rs 3,900 per 40 kilogram. 

Punjab Chief Minister Maryam Nawaz Sharif chaired the fifth meeting of the provincial cabinet at the CM’s office on Wednesday. 

Regarding the agriculture sector, CM Maryam Nawaz reiterated her commitment to ensure the interests of small farmers are protected at all costs.

She said Rs 1.5 lakh interest-free loans would be given to small farmers for buying farm inputs like seeds, fertiliser, and pesticides, under the best and most historic farmer cards in the history of Pakistan.

The cabinet also approved the establishment of Special Speedy Trial Courts in Punjab for the logical conclusion of criminal cases related to rape, child abuse, domestic violence, electricity theft, and others through speedy trials.

Advocate General Punjab briefed the cabinet about the proposed amendment in the defamation law and the establishment of special trial courts. He said that in a defamation case, the degree must be completed within 90 days and the trial within 180 days. 

He added defamation notices would be given simultaneously through major newspapers, social media, courier service, and registered posts to avoid complaints of non-receipt and delay. 

AGP apprised the cabinet that this amendment would be presented soon in the Punjab Assembly for seeking approval.

The chief minister appreciated the move and said the culture of lying and false accusations must end. 

The cabinet also approved the formation of the Cabinet Standing Committee on Legal Affairs, and amendments to the Alternate Dispute Reservation Act, 2019.

The provincial cabinet removed Chairman Drug Court Gujranwala on complaints of misconduct.

 

A worker picks cocoa fruit at the Somos Cacao farm in Ragonvalia, Norte de Santader department, Colombia, on Friday, March 22, 2024.

Bloomberg | Bloomberg | Getty Images

Moving markets today: Nikkei drives Asian markets up, oil and gold prices surge; US Fed’s Powell maintains cautious rate-cut strategy, attention on Fedspeak and US jobs data

The S&P 500 recovered from consecutive declines, registering its first weekly gain amid new data suggesting a softening US economy. Asian markets rallied on Thursday, fuelled by expectations of potential US rate cuts, though the timing remained uncertain, leading to a yen depreciation and boosting Japanese stocks. Oil prices surged due to concerns over reduced supply and geopolitical tensions. Federal Reserve Chair Jerome Powell maintained a cautious stance on rate cuts. Exxon Mobil signalled lower first-quarter profits due to weakened oil and gas prices. Investors remained focused on the Federal Reserve, with several top officials scheduled to speak during the session. Here are five key takeaways for your day.

Powell upholds Fed’s prudent approach to rate cuts

Federal Reserve officials, including chief Jerome Powell, underscored the need for careful consideration before start cutting interest rates. Market expectations suggest potential rate cuts around June.

Powell mentioned that policymakers widely concur that reducing rates may be necessary “at some point this year.” However, they will consider this action only after they are more confident that inflation is steadily decreasing towards the 2 per cent target.

In separate remarks to CNBC, Atlanta Fed President Raphael Bostic suggested maintaining current interest rates until the fourth quarter of the year. Bostic anticipates only one quarter-percentage-point cut in 2024, differing from the expectations of his colleagues, Reuters reported.

Exxon Mobil projects lower first-quarter profits on back of oil and gas price weakness

Exxon Mobil expects lower first-quarter operating results due to reduced oil and gas prices and significant losses in fuel derivatives, as per a recent securities filing. Weak natural gas prices and losses in fuel derivatives, which reversed course after gains last year, are the primary factors behind this decline.

Story continues

Operating profit is estimated at $6.65 billion for the first quarter, down from $11.6 billion a year ago and $7.63 billion in the previous quarter. Investors anticipate an adjusted per-share profit of $2.21, compared to $2.83 a year ago, Reuters reported.

Oil prices soar amid supply worries and geopolitical unrest

Oil prices have surged recently due to several factors. Attacks on Russian refineries by Ukraine have disrupted fuel supplies, contributing to the rise. Moreover, concerns have emerged about the potential spread of the conflict between Israel and Hamas in Gaza to involve Iran, which could further disrupt oil supplies from the Middle East.

In a recent meeting, top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, decided to maintain the current oil supply policy. They also urged certain countries to increase compliance with output cuts.

Consequently, Brent crude prices increased by an additional 0.37 per cent to $89.68 per barrel on Thursday, while U.S. crude prices rose by 40 per cent to $85.77 per barrel.

What’s coming up

Thursday will see investors closely monitoring the US Federal Reserve, as several of its top officials are slated to deliver speeches. In addition to this, significant economic data, including the eagerly awaited monthly U.S. non-farm payrolls report, is scheduled for release the following day.

Ahead of this, attention will also be on the latest weekly jobless claims figures and Challenger’s report on monthly layoff announcements.

In Europe, the focus will be on the services sector survey results. S&P Global is expected to unveil the March services Purchasing Managers’ Index for the euro area, along with similar survey data for the UK. Additionally, eurozone producer price data for February will be published.

Nikkei leads surge in Asian markets

Overnight, the Dow Jones Industrial Average slightly dipped by 0.11 per cent to 39,127.14 points, while the S&P 500 edged up by the same percentage to reach 5,211.49 points. Concurrently, the Nasdaq Composite saw a modest increase of 0.23 per cent, reaching 16,277.46 points. Notably, key sectors within the S&P 500, including energy materials and communication services, showed notable gains.

Across Asian markets, Tokyo’s Nikkei 225 index surged by 1.7 per cent alongside a decline in the yen. Japan’s Topix index also experienced a significant uptick of 1.6 per cent, while South Korea’s Kospi index rose by 1 per cent. Bitcoin, known for its sensitivity to expectations of interest rate adjustments, saw a 0.6 per cent increase, reaching $66,100.

Meanwhile, gold continued its remarkable ascent, hitting a fresh peak at $2,302 per ounce, marking a substantial 12 per cent surge since the onset of February.

Notably, markets in greater China remained closed due to the Ching Ming tomb sweeping festival.

The Nifty closed at 22434.65, up by 0.36% today. Throughout the day, the Nifty reached a high of 22619.0 and a low of 22303.8. Meanwhile, the Sensex traded between 74501.73 and 73485.12, closing 0.47% higher at 73876.82, which was 350.81 points above the opening price.

In comparison to the Nifty 50, the Nifty Midcap 50 underperformed and closed 0.11% lower. However, the Nifty small cap 100 outperformed and ended at 16146.4, up by 72.95 points or 0.45% higher.

Looking at the historical performance of the Nifty 50, it has provided the following returns:

– In the last 1 week: 0.81%

– In the last 1 month: 0.45%

– In the last 3 months: 3.92%

– In the last 6 months: 15.8%

– In the last 1 year: 28.19%

The top gainers in the Nifty index today were HDFC Bank (up 3.06%), Eicher Motors (up 2.04%), Tech Mahindra (up 1.92%), Titan Company (up 1.89%), and Asian Paints (up 1.71%). On the other hand, the top losers in the Nifty index were Oil & Natural Gas Corporation (down 2.31%), Shriram Finance (down 2.24%), Adani Ports & Special Economic Zone (down 2.17%), Bharat Petroleum Corporation (down 2.04%), and Bharti Airtel (down 1.54%).

The Bank Nifty ended at 47624.25, with an intraday high of 48254.65 and a low of 47712.7. The performance of the Bank Nifty in different time frames is as follows:

– In the last 1 week: 1.97%

– In the last 1 month: 1.25%

– In the last 3 months: -0.3%

– In the last 6 months: 9.3%

– In the last 1 year: 17.2%

In the trading session on April 4, 2024, the top gainers in the Sensex were HDFC Bank (up 3.06%), Titan Company (up 1.98%), Tech Mahindra (up 1.74%), Asian Paints (up 1.72%), and Tata Consultancy Services (up 1.41%). The top losers in the Sensex were State Bank Of India (down 1.52%), Bharti Airtel (down 1.44%), Power Grid Corporation Of India (down 0.96%), ITC (down 0.60%), and Reliance Industries (down 0.54%).

In the Nifty MidCap 50, the top gainers were Bandhan Bank, UPL, Coforge, Au Small Finance Bank, and Indus Towers. The top losers were Hindustan Petroleum Corporation, Tube Investments Of India, Petronet LNG, P I Industries, and Yes Bank.

In the Nifty Small Cap 100, the top gainers were CESC, Ujjivan Small Finance Bank, KEC International, PNB Housing Finance, and Cyient. The top losers were Angel One, Redington India, Indiamart Intermesh, Swan Energy, and RITES.

In the BSE, the top gainers were Aster DM Healthcare (up 9.66%), Gujarat Ambuja Exports (up 7.14%), Balaji Amines (up 6.93%), CESC (up 6.71%), and Indiabulls Real Estate (up 5.86%). The top losers were Capri Global Capital (down 7.08%), Dabur India (down 4.77%), Angel One (down 4.73%), Ajanta Pharmaceuticals (down 3.96%), and JM Financial (down 3.83%).

In the NSE, the top gainers were Jubilant Pharmova (up 9.92%), Aster DM Healthcare (up 9.75%), Balaji Amines (up 7.07%), Gujarat Ambuja Exports (up 7.03%), and CESC (up 6.66%). The top losers were Capri Global Capital (down 7.15%), Angel One (down 4.77%), Dabur India (down 4.70%), JM Financial (down 3.82%), and Ajanta Pharmaceuticals (down 3.81%).

For more information on the top gainers and losers in the BSE and NSE, please visit the provided links.

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ChiniMandi, Mumbai: 3rd April 2024

Domestic Market

Domestic sugar were reported stable

Domestic sugar prices in major markets were reported to be stable after a mixed session yesterday. However, with a higher monthly quota, they are expected to face continued pressure in the coming days. Furthermore, demand is expected to be weak in the major markets, putting pressure on prices.

In Muzaffarnagar, M-grade sugar costs between Rs 3,770 and Rs 3,800 per quintal, while S-grade sugar is expected to cost between Rs 3,420 and Rs 3,450. Agrimandi anticipates that the price of S grade sugar in the Kolhapur market will fall to between Rs 3,380 and Rs 3,460 per quintal within the next two weeks.

Ex-mill Sugar Prices as on  April, 3 2024 :

Destination-wise Spot Prices as on April, 3 2024 :

 

International Market

At the time of writing this update London White Sugar #5 front month contract is trading at $654.10 ton, whereas the New York Sugar #11 front month contract is trading at 22.50 c/lb.

Currency, Commodity & Indian Indices

The rupee traded against the US dollar at 83.523 whereas USD was trading with BRL at 5.0739, Crude futures traded at ₹7156, Crude WTI traded at $85.75 barrel. Sensex closed 27.09 points lower at 73876.82 whereas Nifty ended 18.65 points lower at 22434.65

News Round-Up

World Bank projects India’s growth to reach 7.5 per cent in FY 23-24

World Bank projects India’s growth to reach 7.5 per cent in FY 23-24

Season 2023-24: 151 sugar mills end sugarcane crushing operations

Season 2023-24: 151 sugar mills end sugarcane crushing operations

Pakistan Sugar Mills Association requests govt to create ‘permanent’ window of sugar export

Pakistan Sugar Mills Association requests govt to create ‘permanent’ window of sugar export

Back in 2022, two insurance majors said they would reduce the amount of business they do with Big Oil. Allianz and Swiss Re both motivated the move with their net-zero efforts that they wanted to extend to their clients if they wanted to continue being their clients.

One would think this could be a pretty effective strategy to get oil companies to become cleaner, but climate activists disagree. For them, what the insurance industry is doing is not enough. So they’re staging protests to force more radical change: a complete drop of oil and gas companies by the insurers.

Euronews called insurance “the Achilles heel of the fossil fuel industry” back in February, citing an Extinction Rebellion activist as the radical climate group staged a week-long push against insurers to stop insuring oil and gas projects.

“If fossil fuel companies have no insurance for their massive projects, the entire financial risk falls on their shoulders, so if something goes wrong, they are liable for whatever happens,” Steve Tooze told Euronews at the time.

It is difficult to argue with the point. Indeed, companies that are solely responsible for the entire financial risk of a project would be a lot more careful in how they handle that project. They would, in fact, be very careful when deciding whether to take on the project at all-which is what the activists are banking on. Related: SLB Announces $8-Billion Deal as Mergers Extend to Oilfield Sector

What is doubtful in this scenario, however, is that the insurance industry would be willing to drop clients that bring it between $1.6 billion and over $2 billion in premium income annually, per the Euronews report. And that’s just insurers on the Lloyd’s of London market. According to British consultancy Insuramore, as cited by Energy Voice, in 2022, total gross premiums from the oil and gas industry were at $21.25 billion.

“The insurance industries have a kind of superpower and they could make it almost impossible for fossil fuels to continue to operate,” Extinction Rebellion’s Steve Tooze said back in February. They probably can. But will they?

“By 2030, Swiss Re’s oil and gas re/insurance portfolios will only contain companies that are aligned with net zero by mid-century. For our treaty business we are developing an oil and gas approach by 2023,” the insurance major said in 2022.

Allianz will “no longer invest in and underwrite new single-site or stand-alone oil and selected gas risks, oil and gas activities related to the Arctic and the Antarctic as well as extra-heavy oil and ultra-deep sea risks,” the other major declared.

Neither company, then, is willing to give up oil and gas entirely, possibly thanks to the premiums that business brings in. There is a simple reason for that. There is no other business that can fully replace those premiums.

On the contrary, insurers are losing money on the business they do with wind and solar companies because of weather-related events and, in the case of offshore wind, what one publication called “engineering deficiencies.” That goes hand in hand with the higher premiums insurers are slapping on EVs because of the huge write-off risk for these vehicles compared to ICE cars.

So, what Extinction Rebellion’s Tooze says about the insurance industry’s superpower may be right, but the threat of reputation damage is unlikely to be enough to make that industry use its superpower to kill oil and gas. Because oil and gas are cash cows in troubled times of mounting losses because of “engineering deficiencies” and hail.

Even so, insurers are caving, whether due to the fear of reputational damage or because they genuinely believe it is immoral to cover oil and gas projects. As many as 28 insurance companies last year declared they would not provide coverage for the Eastern African Crude Oil Pipeline project.

The declaration came after climate activist protests against the infrastructure project that is set to be the biggest one in Africa, and that will transport oil from Uganda to the coast of Tanzania. It was a development that radical activists such as XR should celebrate because, without insurance coverage, the EACOP may never get completed-there are not a lot of insurance companies that can afford to cover such a massive project.

However, the one thing that those calling for insurers to stop doing business with oil and gas seem to forget is the number one rule of markets. Where there’s demand, supply will find a way. The world’s oil demand keeps breaking records even as the transition away from hydrocarbons gathers pace. And this means that producers will find a way to get their projects done despite insurers’ net-zero declarations.

Lending is a case in point. As some banks started reducing their exposure to the oil and gas industry under net-zero pressure, private equity stepped in to fill the void. Insurance is trickier because there is no private equity equivalent in that industry, but then again, insurers would be hard pressed to give up a business that brings in billions every year. They need these billions, too, for payouts for the engineering deficiencies of offshore wind and the hail storm devastation of solar installations.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Oil prices continued their upward trajectory amid investor apprehensions regarding potential disruptions in supply due to escalating geopolitical tensions, on Wednesday. However, some of these concerns were mitigated by an unexpected increase in U.S. crude oil inventories.

Brent crude futures climbed by 84 cents, representing a 0.9% increase, reaching $89.76 per barrel by 11:38 a.m. ET (1538 GMT). Similarly, U.S. West Texas Intermediate futures experienced a gain of 76 cents, or 0.9%, reaching $85.91 per barrel.

Also read: Gold prices continue to rise for fourth straight session, silver surges to two-year high

During the session, both contracts experienced an increase of over one dollar each before the U.S. Energy Information Administration disclosed a 3.2 million barrel rise in crude stocks. Analysts surveyed by Reuters had anticipated a reduction of over 1.5 million barrels, aligning with the preliminary data released by the American Petroleum Institute on Tuesday.

What’s weighing on crude oil prices?

• Brent and WTI futures have surged to their highest levels in over five months, maintaining this momentum for three straight sessions. This rally is driven by apprehensions regarding Ukraine’s recent assaults on Russian refineries, alongside fears of a potential escalation of conflict in the Middle East, both of which could disrupt oil supplies.
• Iran has pledged retaliation against Israel following an assault on Monday that resulted in the death of senior military figures. As a significant supporter of the Hamas militia engaged in conflict with Israel in Gaza, Iran holds the position as the third-largest producer within the Organization of the Petroleum Exporting Countries (OPEC).

Also read: Mentha Oil Rate Today gains 0.11% on Apr 2 2024 3:50PM

• In a note released on Wednesday, Bank of America Global Research revised its 2024 Brent and WTI forecasts upward to $86 and $81 per barrel, citing strengthening demand and increasing political tensions. Meanwhile, during a meeting of the top OPEC ministers on Wednesday, the oil output policy remained unchanged, with pressure exerted on some countries to enhance compliance with output cuts.

(With inputs from Reuters)

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