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Global Market Round Up

Commodity prices traded lower in the week gone except copper and Aluminium all the non-agri commodities fell amid fear of recessions.

The dollar is stealing every bit of safe-haven shine out there, leaving gold - the original precious metal - with very little luster.

Gold marked for its worst week since July as the dollar continued to strengthen after a slew of US economic data reinforced expectations of the Federal Reserve’s hawkish policy path. The dollar is trading near its record high, weighing on the non-yielding metal which typically has a negative correlation with the greenback and rates, asit is priced in the US currency.

WTI Crude oil posted a weekly loss as inflation-fighting measures and muted Chinese demand soured the market’s outlook, blunting some of the stings from OPEC’s upcoming supply curtailments. After last week’s run-up, it feels like oil prices have been plagued with a sell-the-news trade this week. China’s appetite for overseas oil has yet to recover as anxiety over virus lockdowns keeps travel subdued, overshadowing an increase in fuel-export quotas aimed at supporting economic growth.

Base Metals demand recovery is failing to build momentum despite China's manufacturing sector rise ahead of the Communist Party's Congress, a key meeting where policies for economic recovery are likely to be unveiled.

Commodity Daily BULLION

The dollar is stealing every bit of safe-haven shine out there, leaving gold - the original precious metal - with very little luster.

Gold broke below key $1,650 support on Thursday before bulls in the space lucked out, as the dollar’s tumble on talk of peak inflation in the U.S. helped the yellow metal recoup virtually all that it lost on the day. Gold’s selling, however, resumed Friday as the Dollar Index rose for a seventh time in eight days.

Lisbon hosts the London Bullion Market Association global precious metals conference on 17 October 2022.

Money managers have decreased their bullish gold bets by 3,651 net-long positions to 1,290, weekly CFTC data on futures and optionsshow.

Exchange-traded funds cut 109,913 troy ounces of gold from their holdings in the last trading session, bringing this year's net sales to 1.31 million ounces, according to data compiled by Bloomberg. This wasthe eighth straight day of declines.

Monthly action on spot gold indicates the metal may continue to extend declines towards $1,630-$1,615. If this zone of support fails, then a further drop to $1,600- $1,585 could be expected.

MCX Silver fell for the sixth consecutive session, washing the entire gain which was seen from 28th September to 4 th October. From the recent peak of 62370, MCX silver Dec Fut has fallen almost 12%. Fall in Gold remained limited to 3.7% from the recent peak. Positional Support for Gold Dec Fut. is seen at 48950, while Resistance for the Same is seen at 52100 odd levels. Supports for Silver Dec Fut. are seen at 54350 and 51350, while Resistance for the same is seen at 58500.

Commodity Daily ENERGY

WTI Crude oil posted a weekly loss as inflation-fighting measures and muted Chinese demand soured the market’s outlook, blunting some of the stings from OPEC’s upcoming supply curtailments. After last week’s run-up, it feels like oil prices have been plagued with a sell-the-newstrade this week.

A massive increase in US crude stockpiles last week may be disguising an increasingly tight market picture going into winter. While the nearly 10 millionbarrel surge in inventories seems at first glance to be bearish, much of that increase could be coming from barrels that moved from emergency stockpiles into commercial storage. About 7.8 million barrels were released from the SPR last week, part of the Biden administration’s effort to tame energy prices. That’s one of the largest weekly releasesin history.

The risk of a hurricane strike is shifting to the US East Coast and the Caribbean as the storm season enters its final weeks, with the threat of a blow to the western Gulf this year all but disappearing.

Money managers have increased their bullish NYMEX WTI crude oil bets by 19,305 net-long positions to 208,666, the net-long position was the most bullish in 11 weeks as per weekly CFTC data on futures and optionsshow.

Strategy for the Week:

The short-term view for crude oil has turned negative after last week’s sell-off. WTI Crude oil closed below an upward-slopping trend line and formed a bearish candlestick pattern. It has support at 76.25, the 126% Fibonacci extension level and closed above 13 WEMA. It has resistance at 93.80, the 50 weeks simple moving average. MCX Crude Oil October future has resistance at 7640 and support at 6700.

Commodity Daily BASE METALS

Base metals prices cooled off during the second half of the week amid fears of more interest rate hikes by the Federal Reserve and as global equities witnessed correction on Friday.

Metals demand recovery is failing to build momentum despite China's manufacturing sector rise ahead of the Communist Party's Congress, a key meeting where policies for economic recovery are likely to be unveiled.

SMM copper inventory across major Chinese markets stood at 94,200 mt, up 11,500 mt from October 9, but down 11,000 mt from the same period last year when the inventory dipped 5,800 mtto 105,200 mt

During the week, Industrial metal prices were boosted by signs that sanctions against Russia were beginning to cause a supply crunch.

Chile’s Codelco, the world’s largest copper miner, isreportedly selling copper to European buyers at a record-high premium, citing tightening supply conditions.

Aluminum is continuing to pour into London Metal Exchange warehouses, lifting inventory levels at a time when demand is deteriorating and the market is on high alert forsignsthat unwanted Russian metal could end up on the bourse.

The short-term demand outlook remains weak amid recession fears and weakening global manufacturing activity. MCX Copper’s short-term trend remains positive with October Fut support lying at Rs. 641 and 636 and resistance at Rs. 660 and 671. Short term trend of the MCX Zinc is positive with Oct support lying at Rs. 266 and 260, and resistance at Rs. 275 and 281. MCX Aluminium also looks good on the short-term chart. Immediate supportfor the Oct future lies at Rs. 197 with resistance at Rs. 211.

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