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Gold 

Gold closed marginally down by -0.04% at 57,918 as investors absorbed the latest economic data. The US CPI report indicated a slightly higher-than-expected increase in the headline rate for September, which suggests that interest rates may remain elevated for a longer period. Federal Reserve officials expressed mixed opinions on the need for another rate hike, despite the Fed's subtle suggestion of one. However, they unanimously agreed on the importance of maintaining high interest rates until inflation returns to 2%. While most members leaned toward another rate hike, some believed it unnecessary. The Fed's approach hinges on fresh data and cautious decision-making. On the global scale, central banks increased their gold reserves for the third consecutive month in August, accumulating 77 tonnes, marking a 38% rise from July. Notable contributors included the People's Bank of China, boosting its gold holdings to 2,165 tonnes, and the National Bank of Poland, which added 18 tonnes to reach 314 tonnes. Other buyers encompassed the Central Bank of Turkey, Uzbekistan, India, Czech National Bank, and Kyrgyz Republic. In terms of technical analysis, the market experienced a phase of long liquidation, as open interest dropped by -2.53% to 13,849, accompanied by a price decline of -22 rupees. Gold is finding support at 57,785, with a potential test of 57,655. Resistance is expected at 58,140, and a move above could drive prices toward 58,365.
Trading Ideas:
* Gold trading range for the day is 57655-58365.
* Gold dropped as investors digested the latest economic data.
* Fed officials had mixed opinions on the need for another interest rate hike according to the released minutes
* Central banks worldwide increased their gold reserves for the third consecutive month in August

Silver 

Silver prices experienced a 0.51% decline, closing at 69074, as the market assessed the Federal Reserve's policy direction in light of recent US economic releases. The US Consumer Price Index (CPI) report indicated that inflation remained steady at 3.7% in September, slightly exceeding the expected 3.6%, possibly implying that the Fed might need to maintain its restrictive policies for a longer duration. Higher interest rates can reduce silver demand as they increase the opportunity cost of holding non-interest-bearing assets. However, silver found support from indications that the Fed may proceed cautiously in its future moves. Additionally, a rebound in government bonds during the second week of the month boosted solar panel manufacturers' equities, which in turn improved the outlook for silver as an industrial input. The US labor market exhibited mixed results, with initial jobless claims aligning with market expectations, while continuing claims increased. Jobless claims for the week ending October 6 remained at 209,000, consistent with the prior week's upwardly revised estimate of 207,000. From a technical perspective, the market saw a fresh wave of selling, with open interest increasing by 3.66% to reach 26,530. Silver prices dropped by 352 rupees. Support is currently expected at 68645, with a potential test of 68215 levels below that. On the upside, resistance may be encountered at 69785, and a move above this level could lead to price testing at 70495.

Trading Ideas:

* Silver trading range for the day is 68215-70495.

* Silver prices dipped as markets assessed the Fed's policy path in light of the latest US releases.

* The US CPI report showed that the inflation rate remained steady at 3.7% in September

* Fed officials underscored in the need for caution in their future steps.

Crude oil

Crude oil prices dipped by -1.72% to $68.96 per barrel following a 10.176 million barrel surge in US crude inventories, as reported by the latest EIA update. Meanwhile, OPEC maintained its optimistic outlook for global oil demand in 2023 and 2024, citing a robust world economy and growing demand in China. They anticipate a 2.25 million barrel per day (bpd) increase in demand in 2024, down slightly from 2.44 million bpd in 2023. Interestingly, this forecast aligns with their consistent pattern of projecting higher demand growth compared to entities like the International Energy Agency (IEA). However, the IEA took a more cautious stance by reducing its 2024 demand growth forecast to 880,000 bpd, citing a potentially harsher global economic climate and advances in energy efficiency. They did raise their 2023 demand forecast slightly to 2.3 million bpd. Furthermore, global oil inventories are expected to decline by 200,000 bpd in the latter half of 2023 due to deliberate output cuts by Saudi Arabia and reduced production among OPEC+ nations, as per the U.S. Energy Information Administration. From a technical standpoint, the market has seen fresh selling with increased open interest by 3.76% at 9,546. Prices dropped by -121 rupees. Crude oil finds support at 6,819 and may test 6,742. On the upside, resistance is expected at 7,037 with potential testing at 7,178.
Trading Ideas:
* Crudeoil trading range for the day is 6742-7178.
* Crudeoil dropped after the latest EIA report showed that US crude inventories rose by 10.176 million barrels last week
* OPEC sticks to 2024 oil demand growth forecast
* Economic headwinds prompt IEA to cut 2024 oil demand growth forecast

Natural gas

Natural gas saw a modest increase of 0.25% to reach $2.785 per mmBtu, driven by a smaller-than-expected storage build in the US. The Energy Information Administration reported an addition of 84 billion cubic feet (bcf) into gas storage, falling short of the anticipated 88 bcf increase. In the Lower 48 US states, gas output for October slightly rose to 102.9 bcfd, hinting at increased demand with cooler weather approaching. US gas demand, including exports, is projected to grow from 94.5 bcfd this week to 96.0 bcfd next week. Natural gas exports to Mexico are on the rise, and the market anticipates further growth when New Fortress Energy's LNG plant begins exports, along with the expected resumption of production at Cove Point. In Europe, the Title Transfer Facility (TTF) benchmark in the Netherlands experienced a 10% price surge, reaching a seven-month high at around $16 per mmBtu. This increase is due to concerns about potential disruptions in global gas supplies linked to Middle East violence. From a technical perspective, the natural gas market observed short covering with a decrease in open interest by -2.18% at 17,594. Prices climbed by 0.7 rupees. Natural gas finds support at 273.9 and may test 269.2 on the downside, while resistance is expected at 284.2 with the possibility of reaching 289.8.
Trading Ideas:
* Naturalgas trading range for the day is 269.2-289.8.
* Natural gas gains after the EIA report showed a smaller-than-expected storage build.
* US utilities added 84 bcf of gas into storage last week, less than market expectations of an 88 bcf billion increase.
* US gas demand, including exports, is expected to rise from 94.5 bcfd this week to 95.8 bcfd next week

Copper

Copper prices slipped by -0.34% to $699.9, largely due to rising inventory in London. Stockpiles in LME-registered warehouses reached their highest levels since May 2022, with a three-fold increase in just three months. Despite this, a weaker US dollar and expectations of stimulus in China provided some support. The Yangshan copper premium also surged to $70 a ton, signaling strong demand in China, where copper consumption remains robust. Chinese policymakers are contemplating a significant stimulus package, including issuing 1 trillion yuan ($136.95 billion) in additional sovereign debt for infrastructure spending. Improved PMI data from China and forecasts of increased infrastructure construction boosted confidence. Moreover, concerns about future shortages are bolstering copper prices. Reports from S&P Global and the EIA predict a doubling of copper demand by 2035, raising concerns about potential supply shortfalls. From a technical perspective, the copper market experienced fresh selling, with open interest rising by 7.9% to settle at 8,418. Prices dipped by -2.4 rupees. Support is seen at 696.5, with potential testing at 693.2 on the downside, while resistance is expected at 705.9, with the possibility of reaching 712.
Trading Ideas:
* Copper trading range for the day is 693.2-712.
* Copper prices inched lower weighed down by rising inventory in London
* Although losses were cushioned by a soft U.S. dollar and expectations of more stimulus in China.
* LME Copper inventories rose to 179,675 tons, the highest since May 2022, having more than tripled in just three months.

Zinc

Zinc's recent performance reflects a 0.5% drop, settling at 220.2, primarily due to expectations of surpluses in the global refined zinc market for 2023 and 2024, as per the International Lead and Zinc Study Group (ILZSG). They predict surpluses of 248,000 tons in 2023 and 367,000 tons in 2024. Demand for refined zinc is expected to increase by 1.1% to 13.59 million tons in 2023 and 2.5% to 13.93 million tons in 2024. Furthermore, global production of refined zinc metal is set to rise by 3.7% in 2023 and 3.3% in 2024, largely driven by substantial growth in China. In the financial world, Federal Reserve meeting minutes revealed a mix of sentiments, with many officials leaning dovish and anticipating a pause in interest rate hikes. However, Fed Chair Powell's speech remained hawkish, introducing some uncertainty to the market. As for zinc's stock situation, LME stocks have experienced fluctuations. They rose to 99,100 tonnes, marking a significant increase from 30,475 tonnes at the beginning of the year. Stocks reached their peak at 153,975 tonnes on August 31 but have since declined by 35.6% from August to October. Interestingly, despite decreasing stocks, the demand outlook hasn't shown substantial improvement. From a technical perspective, the market has seen fresh selling, with open interest rising by 11.04% to settle at 3610. Prices have decreased by -1.1 rupees. Zinc currently finds support at 219.4, and a breach could lead to a test of 218.7 levels. On the upside, resistance is expected at 221.5, with a potential move above that level resulting in prices testing 222.9.
Trading Ideas:
* Zinc trading range for the day is 218.7-222.9.
* Zinc prices dropped as global refined zinc markets are likely to see surpluses in both 2023 and 2024.
* Total LME stocks have risen to 99,100 tonnes, 3 up from 30,475 tonnes on January 3.
* Stocks were increasing all year before reaching their highest point on August 31, when total inventory closed at 153,975 tonnes.

Aluminium 

Aluminium faced a 0.37% decline, settling at 203.55, as concerns grew regarding supply surpassing demand. Notably, LME aluminium stocks have been steadily increasing since the start of the year, reaching 502,850 tonnes as of October 4, marking a 12% rise from the year's beginning. This figure represents a 53% increase from the previous year when only 328,600 tonnes were stored in LME warehouses. Notably, Gwangyang, South Korea, witnessed an astounding increase in aluminium stocks, growing by 1,000% from January and 52,780% from a year ago, now holding the largest share of global LME aluminium stocks. This surge in availability in both exchange and physical markets led to weaker premiums for aluminium. Externally, macroeconomic factors added to market volatility. While expectations for a November interest rate hike cooled and the US dollar index declined, boosting market confidence, uncertainty arose due to recent economic data and the escalation of the Palestinian-Israeli conflict. From a technical perspective, the market saw long liquidation as open interest decreased by 0.78% to 3687. Prices dropped by 0.75 rupees. Currently, aluminium finds support at 202.8, and a breach could lead to a test of 202 levels. On the upside, resistance is expected at 204.6, with potential for prices to test 205.6 if it's surpassed.
Trading Ideas:
* Aluminium trading range for the day is 202-205.6.
* Aluminium prices dropped as the outlook worsened, with supply set to outweigh demand.
* LME aluminium stocks have also been rising since the beginning of the year, after dropping to significant lows in 2022
* Increased availability for units on the exchange and in the physical market has also prompted weaker premiums for the light metal.

Cotton 

Cotton prices declined by 0.51% to 58,660 due to improved supply prospects with the new crop season beginning in October 2023. As arrivals increase, price pressure is anticipated. However, the drop is expected to be limited due to a weaker cotton production outlook, which is estimated to decrease by 8%-10% compared to the previous year, primarily because of reduced cotton cultivation in 2023. Various factors, including a prolonged dry spell and damage from the pink bollworm in North India, may affect cotton yields and quality for the 2023-24 crop. Global cotton production and consumption are also expected to decrease in the 2023-24 outlook. The U.S. cotton projections indicate lower production, exports, and ending stocks. India is predicted to produce 330-340 lakh bales of cotton in the 2023-24 season, beginning on October 1. In Telangana, cotton cultivation faced challenges due to unfavorable seasonal conditions, impacting cotton area. Cotton picking is expected to gain momentum in the coming weeks. The central government forecasts normal rainfall and an increase in cotton cultivation for the year 2023-24. In the major spot market of Rajkot, cotton prices closed at 27,636.55 Rupees, showing a 0.55% decrease. From a technical perspective, long liquidation was observed, with a 0.92% decrease in open interest and a price drop of 300 rupees. Key support levels for Cottoncandy are at 58,240, with potential testing at 57,820, while resistance is likely at 58,940, possibly leading to price tests at 59,220.
Trading Ideas:
* Cottoncandy trading range for the day is 57820-59220.
* Cotton prices dropped on improved supply prospects.
* With commencement of new crop season in Oct’23, arrivals will start to pick up that will put pressure on prices.
* India’s cotton exports are estimated to have dropped to a record low of 15.50 lakh bales in the 2022-23 season
* In Rajkot, a major spot market, the price ended at 27636.55 Rupees dropped by -0.55 percent.

Turmeric 

Turmeric prices rose by 0.75% to 14,158, primarily due to concerns about potential yield losses caused by unfavorable weather expected in October. However, the upside is limited as current weather conditions are favorable and crop conditions are satisfactory, with the harvest expected between January and March. The Indian Meteorological Department (IMD) forecasts drier-than-average conditions for October, which may affect crop growth. Demand for turmeric has increased in both developed and emerging markets, leading to a 25% rise in exports. Farmers are shifting priorities, leading to expectations of a 20-25% decline in turmeric seeding, particularly in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. From April to July 2023, turmeric exports grew by 15.05%, totaling 71,616.77 tonnes compared to 62,245.73 tonnes in the same period in 2022. In July 2023, turmeric exports decreased by 24.60% from June 2023 but increased by 8.05% from July 2022. In the major spot market of Nizamabad, turmeric prices closed at 13,638.15 Rupees, marking a 1.01% decline. From a technical perspective, fresh buying was observed, with a 6.71% increase in open interest and a price increase of 106 rupees. Key support levels for turmeric are at 13,876, with potential testing at 13,594, while resistance is likely at 14,418, potentially leading to price tests at 14,678.
Trading Ideas:
* Turmeric trading range for the day is 13594-14678.
* Turmeric gains due to the potential for yield losses
* Crop condition is satisfactory and it will be ready for harvest ready for harvest during January to March.
* Support is also evident for improved export opportunities.
* In Nizamabad, a major spot market, the price ended at 13638.15 Rupees dropped by -1.01 percent.

Jeera 

Jeera (cumin) prices marked a 1.45% rise, closing at 54,720, as low-level recovery efforts were made due to limited availability of quality crops. However, the upside potential was restricted by sluggish export demand. Global buyers showed preference for other sources like Syria and Turkey due to higher Indian cumin prices, impacting India's export prospects. Export seasonality is expected to keep exports subdued in the coming months, as the competitiveness of Indian cumin in the global market isn't in exporters' favor. Reduced purchases by China, a major buyer of Indian cumin, have further affected overall Indian cumin exports. The potential for China to resume buying in October-November adds uncertainty to market dynamics. Additionally, drier weather in Gujarat is expected to increase arrivals, putting a cap on upward price movements. According to FISS forecasts, cumin demand is estimated to exceed supply this year, with demand reaching 85 lakh bags and supply around 65 lakh bags. During April to July 2023, jeera exports decreased by 7.99%, totaling 61,697.44 tonnes compared to 67,057.16 tonnes in the same period in 2022. In July 2023, jeera exports dropped by 20.30% from June 2023 and by 58.23% from July 2022. In the major spot market of Unjha, jeera prices closed at 56,746.9 Rupees, reflecting a 0.64% gain. From a technical perspective, fresh buying was evident, with a 4.46% increase in open interest and a price increase of 780 rupees. Key support levels for jeera are at 53,460, with potential testing at 52,200, while resistance is likely at 56,030, potentially leading to price tests at 57,340.
Trading Ideas:
* Jeera trading range for the day is 52200-57340.
* Jeera gains on low level recovery amid limited availability of quality crop.
* Global demand of Indian jeera slumped as most of buyers preferred other destinations like Syria and Turkey
* Export is likely to remain down in upcoming months as per the export seasonality.
* In Unjha, a major spot market, the price ended at 56746.9 Rupees gained by 0.64 percent.

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