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Gold 

Gold yesterday settled down by -0.12% at 50414 as the UK’s decision to reverse unfunded tax cuts lifted market sentiment, easing demand for the safe-haven US dollar and supporting bullion and US treasuries. Still, expectation of tighter monetary policy by the Federal Reserve remained prevalent and capped gold’s rebound, as inflation expectations compiled by the University of Michigan rose for the first time since March, exacerbating the hotter than expected CPI print last week. US Federal Reserve officials signaled readiness to raise interest rates higher than previously planned, with St. Louis Fed President Bullard backing a frontload in the central bank’s hiking path. Physical gold buying improved in India as prices cooled ahead of the Dhanteras and Diwali festivals later this month, while Chinese premiums stayed elevated amid robust demand. In India, dealers were charging $1.5 an ounce premium over official domestic prices versus $6 discounts last week. Supplies were limited as banks were importing less and inflows of gold-platinum alloys have stopped after the government raised the import duty. China saw premiums of $27-$32 an ounce over global spot prices, although COVID restrictions could hit activity. Premiums of $1-$4 an ounce were charged in Hong Kong, and $1.50-$3 in Singapore. Technically market is under long liquidation as the market has witnessed a drop in open interest by -4.98% to settle at 13928 while prices are down -59 rupees, now Gold is getting support at 50301 and below same could see a test of 50188 levels, and resistance is now likely to be seen at 50536, a move above could see prices testing 50658.

Trading Ideas:

 Gold trading range for the day is 50188-50658.

Gold prices remained in range as the UK’s decision to reverse unfunded tax cuts lifted market sentiment, easing demand for the safe-haven US dollar.

Still, expectation of tighter monetary policy by the Federal Reserve remained prevalent and capped gold’s rebound.

US Federal Reserve officials signaled readiness to raise interest rates higher than previously planned

Silver 

Silver yesterday settled up by 0.08% at 56354 as the dollar faltered, although risks from looming aggressive interest hikes by the U.S. Federal Reserve limited gains. The UK’s fiscal policy reversal lifted investors’ sentiment and the US dollar backed off its recent highs. Inflation in the United States is "very stubborn" and the Federal Reserve should "stay the course" and tighten monetary policy or else lose credibility, said Gita Gopinath, the International Monetary Fund's first deputy managing director. A fourth straight 75-basis-point Fed interest rate hike is expected next month after data last week showed inflation increasing strongly in September. The German government is aiming to cushion an expected recession with its investment programmes, but without fuelling inflation, Economy Minister Robert Habeck said. Latest data showed that US year-ahead inflation expectations increased, which along with another hot inflation report in September support the case for more rate hikes. The dramatic U-turn in British fiscal policy boosted investors' appetite for riskier assets. "We remain completely committed to our mission to go for growth, but growth requires confidence and stability - which is why we are taking many difficult decisions, starting today," British finance minister Jereme Hunt said. Technically market is under short covering as the market has witnessed a drop in open interest by -0.08% to settle at 21156 while prices are up 47 rupees, now Silver is getting support at 55892 and below same could see a test of 55429 levels, and resistance is now likely to be seen at 56819, a move above could see prices testing 57283.

Trading Ideas:

 Silver trading range for the day is 55429-57283

 Silver prices steadied as the dollar faltered, although risks from looming aggressive interest hikes by the U.S. Federal Reserve limited gains.

 The UK’s fiscal policy reversal lifted investors’ sentiment and the US dollar backed off its recent highs

 Inflation in the United States is "very stubborn" and the Federal Reserve should "stay the course" and tighten monetary policy or else lose credibility

Crude oil

Crude oil yesterday settled down by -2.5% at 6863 as fears of economic slowdown and lower Chinese fuel demand offsetting cuts to OPEC+ production quotas. On the supply side, U.S. crude oil stocks were expected to have risen for a second consecutive week. Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said. The United States plans to release another 10 million to 15 million barrels of oil from the country's emergency stockpile in a bid to balance markets and keep gasoline prices from climbing. The White House also plans to replenish the U.S. strategic petroleum reserve. The United Arab Emirates believes that OPEC+ made the correct technical choice when it agreed to cut production and the unanimous decision had nothing to do with politics, energy minister Suhail al-Mazrouei said. His comments came after several members of the oil producers group endorsed the steep cut to output targets agreed this month after the White House accused Saudi Arabia of coercing some other nations into supporting the move, a charge Riyadh denies. Mazrouei said the OPEC+ decision stabilised prices, rather than increasing them, adding that it was lack of stability that was driving investors away. Technically market is under fresh selling as the market has witnessed a gain in open interest by 67.86% to settle at 5620 while prices are down -176 rupees, now Crude oil is getting support at 6714 and below same could see a test of 6564 levels, and resistance is now likely to be seen at 7041, a move above could see prices testing 7218.

Trading Ideas:

Crude oil trading range for the day is 6564-7218.

 Crude oil dropped as fears of economic slowdown and lower Chinese fuel demand offsetting cuts to OPEC+ production quotas

 Output in the Permian Basin of Texas and New Mexico, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month

U.S. to release another 10 – 15 mln barrels of oil to balance markets

Nat.Gas

Nat.Gas yesterday settled down by -4% at 475.6 on a downwardly revised demand forecast for next week due to milder weather. Average US gas demand, including exports, is expected to fall to 94.9 bcfd next week, from 100.3 bcfd this week, according to Refinitiv. Prices have been falling in the past 8 weeks, amid record domestic production levels and reduced liquefied natural gas (LNG) exports that have allowed utilities to inject much bigger than normal amounts of gas into storage over the past month. The average amount of gas flowing to US LNG export plants fell to 11.0 bcfd so far in October from 11.5 bcfd in September, and below a monthly record of 12.9 bcfd in March. Meanwhile, average gas output in the US Lower 48 states rose to 99.6 bcfd so far in October from a record 99.4 bcfd in September. The EIA report showed that US utilities added 125 bcf of gas to storage last week, the 4th consecutive week of increases above 100 bcf. U.S. natural gas prices at the Henry Hub benchmark in Louisiana will rise to $6.77 per million British thermal units (mmBtu) in 2022, their highest since 2008, before falling to $5.57 in 2023. Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.74% to settle at 11845 while prices are down -19.8 rupees, now Natural gas is getting support at 462.3 and below same could see a test of 448.9 levels, and resistance is now likely to be seen at 495.8, a move above could see prices testing 515.9.

Trading Ideas:

Natural gas trading range for the day is 448.9-515.9.

Natural gas dropped on a downwardly revised demand forecast for next week due to milder weather

Average US gas demand, including exports, is expected to fall to 94.9 bcfd next week, from 100.3 bcfd this week

U.S. Henry Hub natgas price forecasts, 2022 to rise to 14 year high

Copper 

Copper yesterday settled down by -1.22% at 640.45 on worries that China's determination to stick with its strict COVID-19 rules could dampen economic growth and demand for metals. Chinese president Xi Jinping reiterated the validity of China's zero-covid policy, which includes lockdowns and movement curbs to prevent the spread of coronavirus, at the Communist Party Congress, the country's key political event. Some market participants had previously hoped that China would ease its COVID-19 restrictions rules to support its economy, which has shown signs of slowing in the past months but cushioned by a raft of government supportive policies. A sharp increase in ShFE copper inventories on Oct. 14 also dented sentiment. But tight supply, overall, of the metal in China continued to lend some support and cushion prices from steep falls. Visible copper stocks in China, which includes inventories in Chinese bonded and ShFE warehouses, were 93,846 tonnes on Oct. 14, edging up from a record low, but still at low levels, data showed. Total copper production in Chile, the world's top copper producer, fell 10.2% in August to 415,500 tonnes. Tight supplies, better demand in China, and an open import arbitrage buoyed the Yangshan import copper premium to $142.50 a tonne on Friday, the highest since March 2014. Technically market is under fresh selling as the market has witnessed a gain in open interest by 10.88% to settle at 5188 while prices are down -7.9 rupees, now Copper is getting support at 634.5 and below same could see a test of 628.4 levels, and resistance is now likely to be seen at 649, a move above could see prices testing 657.4.

Trading Ideas:

 Copper trading range for the day is 628.4-657.4

 Copper dropped on worries that China's determination to stick with its strict COVID-19 rules could dampen economic growth and demand for metals.

 A sharp increase in ShFE copper inventories on Oct. 14 also dented sentiment.

 But tight supply, overall, of the metal in China continued to lend some support and cushion prices from steep falls.

Zinc 

Zinc yesterday settled up by 0.45% at 265.75 as European zinc smelters slashed output massively amid sky-rocketing energy costs, with little possibility of resumptions in the short term. Data shows that the zinc ingot inventories across seven major markets in China totalled 94,400 mt as of October 17, up 9,700 mt from a week ago and up 5,700 mt from last Friday (October 14). In Shanghai, the inflows to the inventory increased with the arrivals of Qilin zinc and Baiyin zinc. At the same time, the smelters have started sending cargoes to inventory for futures delivery, while the downstream enterprises were reluctant to pick up cargoes. South American zinc and copper producer Nexa Resources SA expects tight supplies of zinc metals globally due to smelter closures in Europe as energy prices skyrocket, a situation that is boosting overall price premiums. Nexa's Chief Executive Ignacio Rosado told Reuters on Thursday, ahead of a meeting with investors at the New York Stock Exchange (NYSE), that the European situation is opening opportunities to expand zinc sales in the continent at higher prices. "Smelters in Europe, and also in the United States, are stopping production due to the high price of energy, so there is not much (zinc) metal," Rosado said, adding that the situation is more than offsetting the negative aspect of a possible global recession. Technically market is under short covering as the market has witnessed a drop in open interest by -13.18% to settle at 2148 while prices are up 1.2 rupees, now Zinc is getting support at 263.3 and below same could see a test of 260.8 levels, and resistance is now likely to be seen at 267.5, a move above could see prices testing 269.2

Trading Ideas:

Zinc trading range for the day is 260.8-269.2

Zinc remained supported as European zinc smelters slashed output massively amid sky-rocketing energy costs

 Zinc producer Nexa expects high prices as Europe smelters shut

Refined zinc output is estimated at 516,700 mt in October

Aluminium 

Aluminium yesterday settled down by -2.48% at 194.65 as inventories in London Metal Exchange (LME) warehouses jumped, fuelling fears of unwanted Russian-origin metal in the LME system. Western countries have imposed sanctions on Russian banks and wealthy individuals connected to President Vladimir Putin since Russia's invasion of Ukraine in February, but so far there are no restrictions on buying Russian metal. However, metal industry sources say there is concern that Rusal will be unable to sell its metal and will deliver it into the LME system, which would distort prices. Stocks of aluminium in LME warehouses jumped 65,825 tonnes to 433,025 on Friday. Of that, 23,525 tonnes were delivered to Gwanyang in South Korea and 44,675 tonnes to Port Klang in Malaysia. The aluminium ingot social inventory rose less than expected on the basis of a low base before the National Day holiday and poor arrivals after the holiday. To sum up, aluminium prices are unlikely to break the current range amid supply disruptions in China and abroad, bearish global demand in mid and long term, as well as the wrestling between longs and shorts. China's economy showed a significant recovery in the third quarter and employment is generally stable, said an official at China's economic state planner, but the economy still faces many challenges and difficulties. Technically market is under fresh selling as the market has witnessed a gain in open interest by 8.6% to settle at 3282 while prices are down -4.95 rupees, now Aluminium is getting support at 192.5 and below same could see a test of 190.1 levels, and resistance is now likely to be seen at 199, a move above could see prices testing 203.1.

Trading Ideas:

Aluminium trading range for the day is 190.1-203.1

Aluminium price drops on jump in LME stocks and Russian metal

China's economy showed a significant recovery in the third quarter and employment is generally stable

Metal industry sources say there is concern that Rusal will be unable to sell its metal and will deliver it into the LME system

Mentha oil

Mentha oil yesterday settled down by -0.94% at 974.7 as mentha exports during Apr-Aug 2022 has dropped by 14.27 percent at 886.53 tonnes as compared to 1034.14 tonnes exported during Apr-Aug 2021. Exports in the month of August 2022 were around 238.04 tonnes as against 155.04 tonnes in July 2022 showing a rise of 53.53%. In the month of August 2022 around 238.04 tonnes of Mentha was exported as against 227.27 tonnes in August 2021 showing a rose of 4.74%. Synthetic Mentha supply remains uninterrupted. Support also seen amid low production this season and improving demand post-pandemic. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year, production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. In Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil gained by 13.5 Rupees to end at 1141.9 Rupees per 360 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.29% to settle at 1069 while prices are down -9.2 rupees, now Mentha oil is getting support at 970.8 and below same could see a test of 967 levels, and resistance is now likely to be seen at 981.2, a move above could see prices testing 987.8.

Trading Ideas:

 Mentha oil trading range for the day is 967-987.8

In Sambhal spot market, Mentha oil gained  by 13.5 Rupees to end at 1141.9 Rupees per 360 kgs

Mentha oil dropped as mentha exports during Apr-Aug 2022 has dropped by 14.27 percent at 886.53 tonnes

August exports were around 238.04 tonnes showing a rise of 53.53% compared to July 2022

However, Synthetic Mentha supply remains uninterrupted

Turmeric 

Turmeric yesterday settled up by 1.37% at 7406 as support seen after Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. Arrivals has been dropped by 26% Y-o-Y due to lower production as about 11248 tonnes of turmeric arrived at APMC mandies across India in Sep’22 compared to 15758 tonnes of previous year for corresponding month. As per Andhra Pradesh agricultural department, as on 06th October 2022 Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67% till date. Turmeric exports during Apr-August 2022 has rose by 15.35 percent at 74,393.62 tonnes as compared to 64,493.34 tonnes exported during Apr- August 2021. In the month of August 2022 around 12,147.89 tonnes turmeric was exported as against 12,810.36 tonnes in July 2022 showing a drop of 5.17%. In the month of August 2022 around 12,147.89 tonnes of turmeric was exported as against 11,617.90 tonnes in August 2021 showing a rise of 4.56%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. The Spices Board has pegged turmeric production at 1.33 mln tn, up 18.4% on year. In Nizamabad, a major spot market in AP, the price ended at 7248.65 Rupees gained 58.55 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.74% to settle at 11060 while prices are up 100 rupees, now Turmeric is getting support at 7262 and below same could see a test of 7118 levels, and resistance is now likely to be seen at 7498, a move above could see prices testing 7590.

Trading Ideas:

Turmeric trading range for the day is 7118-7590.

Turmeric rose as support seen after Agriculture Minister said unseasonal rains in some parts of the country have affected the crops.

As per Andhra Pradesh agricultural department, turmeric sowing activity completed around 16,921 hectares, down by 12.67% till date from last year.

 Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.

 In Nizamabad, a major spot market in AP, the price ended at 7248.65 Rupees gained 58.55 Rupees.

Jeera 

Jeera yesterday settled down by -0.67% at 23675 on profit booking after prices seen supported as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices in coming months. Arrivals also observed to be less during the month. Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month supported by decrease in arrivals in Rajasthan as well as in Gujarat. Jeera exports during Apr-August 2022 has dropped by 26.44 percent at 91,505.49 tonnes as compared to 1,24,390.31 tonnes exported during Apr- August 2021. In the month of August 2022 around 24,448.33 tonnes jeera was exported as against 19,866.18 tonnes in July 2022 showing a rise of 18.74%. In the month of August 2022 around 24,448.33 tonnes of jeera was exported as against 17,460.60 tonnes in August 2021 showing a rise of 40.02%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. Jeera production was seen at 725,651 tn, down 8.8% on year due to lower acreage in Rajasthan and Gujarat, the key producer, according to data from Spices Board India. According to fourth advanced estimates by Gujarat government, jeera production is seen fall by 44.5 per cent to 221500 tonnes in 2021-22 on yoy basis In Unjha, a key spot market in Gujarat, jeera edged down by -3.8 Rupees to end at 23809.55 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -0.71% to settle at 6666 while prices are down -160 rupees, now Jeera is getting support at 23570 and below same could see a test of 23470 levels, and resistance is now likely to be seen at 23830, a move above could see prices testing 23990.

Trading Ideas:

Jeera trading range for the day is 23470-23990.

 Jeera dropped on profit booking after prices seen supported as supply was less as farmers and stockists were holding stocks

 Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month

 All-India Jeera production is expected to fall in the Marketing year 2022-23 by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings.

 In Unjha, a key spot market in Gujarat, jeera edged down by -3.8 Rupees to end at 23809.55 Rupees per 100 kg.

Cotton 

Cotton yesterday settled up by 0.21% at 33380 as India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. This is lower by about 13 per cent than 353 lakh bales estimated for the previous season ended September 30, 2021. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey and Vietnam. The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales, while also cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece and Mexico. "In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher," the USDA said. USDA said its estimates for 2022/23 U.S. cotton crop ending stocks are 100,000 bales higher from a year earlier, with production nearly unchanged at 13.8 million bales. In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg. Ginning mills have started buying seed cotton with the advent of the auspicious festival of Navratri. However, spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival. In spot market, Cotton gained by 110 Rupees to end at 33720 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -3.56% to settle at 487 while prices are up 70 rupees, now Cotton is getting support at 33010 and below same could see a test of 32630 levels, and resistance is now likely to be seen at 33760, a move above could see prices testing 34130.

Trading Ideas:

Cotton trading range for the day is 32630-34130.

 Cotton gained as India’s 2021-22 cotton crop estimated at 14-year low

Support also seen as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions.

USDA projected higher year-end stocks and a decline in exports amid a slowdown in consumption.

 In spot market, Cotton gained  by 110 Rupees to end at 33720 Rupees.

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