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Gold: Expected to trade within range of Rs. 47000-48500

* Gold prices rose strongly last month, supported by a retreat in US bond yields and dollar with investors focusing on the Federal Reserve’s response to inflationary pressure and concerns on tepid economic growth

* US GDP increased at a 2.0% annualised rate last quarter, as a resurgence in Covid-19 cases further stretched global supply chains, leading to shortages of goods like automobiles that slammed the brakes on consumer spending

* US Fed officials face a ticking clock in their ability to ignore high inflation and are now navigating between their own senses of patience and risk, and a US economy stymied by tangled supply chains, slow hiring and strong consumer demand

* European Central Bank President Christine Lagarde acknowledged higher inflation but pushed back against market bets that price pressures would trigger an interest rate hike as soon as next year

* MCX gold prices have an immediate resistance around | 48500 level. As long as they sustain below this level they are expected to trade within in the range of ₹ 47000-48500 levels for the next few weeks

* Taking cues from gold prices, silver prices are also likely to move within the range of ₹ 63500-66500 levels for the coming weeks

Copper: To remain supported near ₹ 730 level..

* Copper prices rallied strongly in the first half of last month, buoyed by decades-low supplies and an extreme shortage of readily available metal in exchange warehouses as industrial users sought material from declining inventories while speculative buyers also piled in. However, macroeconomic uncertainty and a strong dollar capped further gains in copper

* Furthermore, prices corrected sharply in the second half of the month weighed down by worries that a power crisis and slower economic growth in top metals consumer China will erode demand

* On-warrant copper stockpiles in LME warehouses rose to 27,100 tonnes, rebounding slightly from a 1998-low hit on October 14 of 14,150 tonnes that sparked supply concerns and pushed premium of cash LME to a record high over the three-month contract

* High power prices and efforts to curb emissions in China have dampened output of some metals but investors are concerned that fabricators will also be hit, undermining consumption

* Chile’s copper exports hit $4.157 billion in value in September, up 18.5% from a year earlier, boosted by strong global prices for the metal, the central bank said

* Overall, we expect copper prices to remain supported around ₹ 730 level for the coming weeks due to low inventories

Aluminium: To take support near ₹ 210 level…

* Aluminium prices rose to all-time high in the first half of last month boosted by strong demand and large shortages created by China imposing production curbs on high-polluting industries such as smelting to cut power use and emissions

* However, prices plunged sharply in the second half after China’s state planner said it would step in to cool soaring prices for coal, which powers aluminium smelters, during a severe power crunch. Energy accounts for about 40% of aluminium smelter costs. China’s state planner has set an immediate price target for thermal coal in its most direct intervention yet to cool the market for the key power-generating fuel

* Aluminium output in China, the world’s top producer, declined for a fifth consecutive month in September. Russian aluminium producer Rusal said the aluminium market deficit of 1.1 million tonnes in the first nine months of 2021 compared with a 2.2 million tonne surplus in the same period a year ago

* On-warrant inventories of aluminium available to the market in LME-registered warehouses eased to 625,350 tonnes, near its lowest since 2018

* Therefore, we believe aluminium prices should take support near ₹ 210 level in the coming weeks due to falling inventories

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