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GLOBAL MARKET ROUND UP

Sentiment across commodity markets was broadly positive as the USD weakened. This was compounded by a lack of liquidity with China closed for national holidays. The dollar index retreated further from a recent 20-year peak, losing 0.4% and falling for a fourth consecutive session. 10-year Treasury yields also backed away from an early 12-year high. Gold has an inverse correlation with the dollar index. Falling Dollar Index could push the gold prices on the upside

Oil pushed higher after posting the biggest one-day gain since May as the market looked to OPEC+ to deliver a substantial cut in supply

Base metals prices ended strong on Monday with Copper and Aluminum remaining the biggest gainers among the pack.

Investors greeted the fourth quarter by sending stocks higher by 2.6% on the S&P 500, the broad index’s best one-day showing since July 27. Similar strength in the Treasury complex left the two-year note at 4.12% and the long bond at 3.73%, down ten and six basis points from Friday’s close, respectively,

Markets are now pricing in the possibility that the Fed will eventually pivot to a dovish stance if economic conditions worsen in the country. This comes ahead of key U.S. nonfarm payrolls data this Friday, which is expected to show resilience in the labour market.

Commodity Daily BULLION

U.S. Gold is muted today after a strong rally on a weakening dollar, but gains in the red metal were dampened by more signs of weakening global manufacturing activity. U.S. Gold rose sharply on Monday, retaking the $1,700 an ounce level after nearly three weeks. Prices of the yellow metal rose after weak U.S. manufacturing and construction data suggested that the Federal Reserve may have to temper its pace of rate hikes to prevent further economic destruction.

Trading Strategy

MCX Gold Surged almost 2% in yesterday’s trade, to close at 51160. Gold December Fut. has surpassed the previous top resistance of 50780 and entered the bullish momentum zone. RSI on the daily chart has reached above 60, which is a bullish sign for the short term. Gold is headed towards the nextresistance of 51800. Dipsshould be bought into.

MCX Silver soared more than 7%, to settle at 60911. It has surpassed the previous top resistance of 60481. Next resistance for the Dec fut. is seen at 63000 odd levels. Supports are seen at 60500 and 58500 odd levels and the same should be utilized to initiate fresh long positions.

Commodity Daily ENERGY

Crude oil prices rallied sharply as expectations of a large cut to OPEC production rose. The OPEC+ alliance is due to meet in Vienna on Wednesday to review its production agreement. The group has already signalled that it is willing to intervene to support prices. A cut as large as 1mb/d would tighten the market considerably. Inventories are relatively low and European sanctions are not due to kick in until December. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19.

European natural gas fell sharply as strong inflows into storage eased concerns of shortages over the coming winter. So far, an influx of LNG has helped mitigate losses from Russia. Storage facilities have reached 88% of capacity in Europe, higher than usual for this time of year

Trading Strategy:

MCX Crude oil price is expected to trade higher with higher side resistance at 6975 and support at 6510. The surpassing of 6975 will confirm the trend reversal and crude oil will march towards 7200. MCX Natural Gas has broken the long-term support of 530 and the breaking of 525 will further add pressure on it and we could see levels of 480.

Commodity Daily BASE METALS

Base metals prices ended strong on Monday with Copper and Aluminum remaining the biggest gainers among the pack. However, Zinc ended with losses. The sharp rebound in the Equity markets also supported the Base metal prices. The weak manufacturing data, coupled with similarly dismal readings from Japan, the Eurozone and the UK on Monday, saw copper prices lag precious metal markets on fears of further demand headwinds.

Trading Strategy

MCX Copper Oct support lies at Rs. 642 and resistance at Rs. 655. MCX Zinc Oct support lies at Rs. 265, resistance at Rs. 272. MCX Aluminium Oct support lies at Rs. 192 with resistance at Rs. 201. After an initial dip, buying should emerge in Base metals and they are likely to trade with a positive biasfor the day.

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