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GOLD

Gold settled lower by -0.41% at 60770, influenced by a slight rise in U.S. Treasury yields and investor focus on developments in the Middle East, awaiting Federal Reserve Chair Jerome Powell's upcoming speech. The rise in U.S. long-term bond yields and a weaker dollar helped limit the downward pressure on gold prices. Investors are eager to gain insight from key policymakers' speeches this week, anticipating clarity on the future direction of interest rates. There's a widespread belief that the Fed might refrain from further rate hikes, with futures markets suggesting an 86 percent chance of the first policy easing potentially happening by June. Expectations also include rate cuts by the European Central Bank by April and the Bank of England in August. Additionally, the Reserve Bank of Australia is anticipated to resume rate adjustments at an upcoming policy meeting to combat persistent inflation. In India, physical gold dealers continued offering discounts for the fourth consecutive week as buyers hesitated due to higher domestic prices. Indian dealers provided discounts of up to $9 an ounce over official domestic prices, an increase from the prior week's $5 discount. Similarly, China, a significant consumer, experienced subdued demand. From a technical standpoint, the market witnessed long liquidation with a -1.44% drop in open interest to settle at 13874. Gold's support level is positioned at 60675, potentially testing 60580, while resistance is anticipated at 60920, possibly leading to a price test at 61070 upon a breakout.

Trading Ideas:

* Gold trading range for the day is 60580-61070.
* Gold slightly lower following a slight uptick in U.S. Treasury yields
* Investors took stock of the latest developments in the Middle East
* Investors looked ahead to a speech by Fed Chair Jerome Powell later this week for more clarity on the interest rate outlook

SILVER

Silver prices experienced a slight decline of -0.19% to settle at $72,117. This dip was influenced by a mix of economic data and geopolitical factors. On one hand, the weaker-than-expected US jobs report hinted at a potential conclusion to the Federal Reserve's tightening cycle. This led to a drop in the US dollar and bond yields. On the other hand, the safe-haven appeal due to the Israel-Hamas situation diminished as there was no significant escalation in the conflict. Investors are now closely watching the statements of several Fed officials, including Federal Reserve Chair Jerome Powell, for guidance on interest rates. The disappointing jobs report reinforced the belief that the Federal Reserve may not raise interest rates further. In October, the US added only 150,000 jobs, well below expectations. Additionally, the ISM Services PMI for October fell to 51.8, the lowest in five months, indicating economic challenges. On the central bank front, the Bank of England decided to maintain its interest rates at 5.25%, aligning with other major central banks. They intend to keep rates elevated for an extended period. From a technical perspective, the market is currently experiencing fresh selling pressure with an increase in open interest by 3.16% to 18,778 contracts. Silver has found support at $71,820 and could test $71,530 if that level is breached. On the upside, resistance is expected around $72,395, with potential further gains towards $72,680.

Trading Ideas:

* Silver trading range for the day is 71530-72680.
* Silver stabilized as traders weighed the latest economic data and geopolitical risks.
* Weak US jobs figures sparked optimism that the Federal Reserve might have concluded its tightening cycle
* The safe-haven premium associated with Israel-Hamas was washing out, there being no significant escalation in the conflict.
 

CRUDE OIL

The recent surge in crude oil prices, reaching a settlement of 6826 with a 1.94% increase, follows crucial decisions by major oil-producing nations. Saudi Arabia and Russia's commitment to maintaining additional voluntary output cuts until year-end has tightened the market. Saudi Arabia's continued cut of 1 million bpd until December, subject to review for extension or alteration, and Russia's persistence with an extra 300,000 bpd cut until December 2023, aim to bolster the stability of global oil markets. The U.S. House passing a bill to intensify sanctions on Iranian oil by targeting foreign ports and refineries handling Iranian petroleum adds another layer of complexity to the market dynamics. Such geopolitical factors play a significant role in influencing crude oil prices and market sentiment. Technically, the market is experiencing short-covering, indicated by a substantial drop in open interest by -27.93% to 6529. Despite this, prices have risen by 130 rupees. The support level for Crude oil stands at 6757, with a potential downside towards 6687. On the upside, resistance is projected at 6873, potentially leading to a test of 6919 if breached.

Trading Ideas:

* Crudeoil trading range for the day is 6687-6919.
* Crude oil gains after Saudi Arabia and Russia announced that they would stick to extra voluntary oil output cuts until the end of the year
* Saudi Arabia confirms to continue voluntary 1 mln bpd output cut for December
* Russia to continue voluntary cut of oil and oil product exports until year – end
 

NATURAL GAS

The significant 6.85% decline in natural gas prices to settle at 272 is primarily due to a combination of increased gas production, abundant gas in storage, subdued demand, and mild weather conditions. Production in November is on the rise after reaching a record high in October, contributing to the oversupply. Furthermore, current gas storage levels exceed the typical quantity for this time of the year by about 6%. Warmer weather forecasts until mid-November have led to decreased heating demand, adding to the surplus. Although gas flows to US LNG export facilities are rising, they remain below the peak levels seen in April. Exports to Mexico have declined since September but are expected to rise with the start of LNG exportation from New Fortress Energy's plant. According to financial firm LSEG, gas output in the Lower 48 U.S. states rose to 106.6 bcfd in November, with a peak of 107.6 bcfd on Thursday, indicating a continuous increase in production. However, the market also faces technical pressure with a surge in open interest by 109.22% to settle at 29979, despite the prices dropping by -20 rupees. Support for natural gas is at 266.7, with a potential downside to 261.3. Resistance is projected at 282.3, possibly leading to a test of 292.5 if breached.

Trading Ideas:

* Naturalgas trading range for the day is 261.3-292.5.
* Natural gas fell due to increased gas production, an abundance of gas in storage, subdued demand
* Natural gas production has been on the rise in November, following a record high in October.
* The expectation of warmer-than-normal weather until at least mid-November is reducing heating demand, further dampening the need for natural gas.

 

COPPER

Copper marked a 0.54% increase, settling at 713.7, driven by a weaker dollar and China's commitment to enhance imports, spurring fund buying. Chinese Premier Li Keqiang's announcement of opening up the economy and aiming for $17 trillion in imports over five years boosted market confidence. Despite increased inventories in both LME-registered and Shanghai Futures Exchange-monitored warehouses, the impact on prices was tempered by a weaker dollar and the anticipation of crucial upcoming U.S. data. China's measures to widen its budget by borrowing an additional CNY 1 trillion for manufacturing investments bolstered industrial input buying, countering concerns over low demand from the debt-laden residential construction sector. However, China's manufacturing data failing to meet expectations impacted the demand outlook for copper. On the supply side, legislative changes in Panama focus on banning new mining concessions while preserving an existing lucrative copper mine. Despite positive developments, concerns arose from China's lower-than-expected manufacturing data and Chile's 4.1% year-on-year increase in copper output for September. The Caixin/S&P Global manufacturing PMI dropping to 49.5 in October, below forecasts, indicated the first contraction since July. From a technical perspective, the market witnessed short-covering with a 6.19% drop in open interest, settling at 6036, while prices rose by 3.8 rupees. Support for copper lies at 711.3, potentially testing 708.7 on the downside, and resistance stands at 715.7, with a probable test of 717.5 if surpassed.

Trading Ideas:

* Copper trading range for the day is 708.7-717.5.
* Copper gains as a softer dollar and China committing to boost its imports spurred fund buying.
* Copper stocks in the LME-registered warehouses rose after their recent decline
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 11.3% this week.
 

ZINC

Zinc saw a gain of 1.32%, settling at 226.5, driven by Nyrstar's announcement of the temporary closure of two zinc mines in Tennessee by the end of November due to weak prices and inflationary pressures. The decision by Nyrstar, majority-owned by Trafigura, reflects the challenging market conditions facing the zinc industry. The decline in China's manufacturing PMI to 49.5 in October highlights concerns about the economy's fragile recovery. Additionally, the official NBS Non-Manufacturing PMI dropped to 50.6 in October, down from 51.70 in the previous month, indicating challenges in the services sector as well. The International Lead and Zinc Study Group's statement revealed a shift in the global refined zinc market, which is now expected to have a surplus of 248,000 metric tons this year, compared to a previously projected deficit of 45,000 tons due to weaker demand. This change is attributed to tighter monetary conditions and lower-than-expected demand. Despite some growth in China's refined zinc output, it fell short of expectations, and global demand for refined zinc is projected to increase by 1.1% in 2023, a more modest figure compared to earlier estimates. From a technical perspective, the market is experiencing fresh buying, with a 26.34% increase in open interest, settling at 4513, while prices rose by 2.95 rupees. Support for zinc is at 224.2, with a potential test of 221.7 on the downside, while resistance is likely at 228.3, potentially testing 229.9 if surpassed.

Trading Ideas:

* Zinc trading range for the day is 221.7-229.9.
* Zinc prices rose as Nyrstar plans to temporarily close two zinc mines.
* Global zinc market surplus widens in August – ILZSG
* The global zinc market to show a surplus of 148,000 metric tons this year and 238,000 tons in 2024.

 

ALUMINIUM

Aluminium surged by 1.01%, closing at 209.2, driven by reduced production in China's Yunnan province due to limited hydropower sources during the dry season. Chinese smelters have initiated production cuts totaling 1.15 million metric tons to comply with government-imposed curbs expected to endure until April. Yunnan, accounting for about 12% of China's total aluminium capacity, faces a reduction of 9% to 40% in production capacity. Despite the previous growth in aluminium capacity in Yunnan due to inexpensive hydropower, water scarcity is now impacting overall output. Global aluminium production has increased this year as European smelters resume operations with stabilized power prices. Analysts have revised their market deficit expectations for this year and the next due to lackluster demand, particularly in Europe, impacting the metal used in packaging, transportation, and construction. Technically, the market witnessed short-covering with a 7.17% decrease in open interest, settling at 2850, while prices rose by 2.1 rupees. Support for aluminium stands at 207.6, with a potential test of 205.9 on the downside, while resistance is projected at 210.4, potentially testing 211.5 if breached.

Trading Ideas:

* Aluminium trading range for the day is 205.9-211.5.
* Aluminium rose as smelters in China's Yunnan province trimmed production
* Global aluminium production has ramped up this year as smelters come back on line in Europe
* Market surpluses of 338,000 tons this year and 250,000 tons in 2024, an about-face from deficits 191,750 tons
 

COTTONCANDY

Cottoncandy faced a decline of -0.72%, settling at 58040, following profit booking activities. The outlook for India's cotton production in 2023/24 predicts a 7.5% decrease to 29.5 million bales due to reduced planted area and El Nino weather impacting productivity. The Cotton Association of India (CAI) anticipates an increase in imports to 2.2 million bales in the marketing year that began on Oct. 1. USDA's October WASDE report reflects reduced production estimates for the U.S. and a forecast of Brazil surpassing the U.S. in cotton production and potentially in exports, marking a significant shift in global cotton dynamics. Australia's cotton exports to China surged in August, indicating a favorable trade relation between the two nations. The CAI's estimates for the 2022-23 season settled slightly higher at 31.8 million bales, deviating from the government's third advance estimate of 34.3 million bales for the same season. Projections for India's 2023-2024 cotton season hint at a production range of 330 to 340 lakh bales. In the major spot market of Rajkot, cotton prices dropped by -0.09% to 27328.8 Rupees. From a technical standpoint, the market observed long liquidation, with a 3.92% drop in open interest, settling at 98, as prices decreased by -420 rupees. Support for Cottoncandy stands at 57880, potentially testing 57710 on the downside, while resistance is likely at 58340, with a potential test of 58630 if surpassed.

Trading Ideas:

* Cottoncandy trading range for the day is 57710-58630.
* Cotton dropped  on profit booking after prices gained as India's cotton production in 2023/24 is likely to fall 7.5%.
* Imports could rise to 2.2 million bales in the marketing year that started on Oct. 1, up from the last year's 1.25 million bales
* USDA cut U.S. production in 2023/24 to 12.8 million bales
* In Rajkot, a major spot market, the price ended at 27328.8 Rupees dropped by -0.09 percent.
 

TURMERIC

Turmeric showed a gain of 0.75%, settling at 13950, mainly due to concerns about potential yield losses from unfavorable weather. However, the upside is limited as better weather conditions have improved crop conditions. Harvest readiness is expected between January and March, but the dry projections for October by the IMD might affect crop growth. Despite this, current buying activity and decreasing supplies are expected to maintain price stability. Improved export prospects are also supporting the market, with a 25% increase in turmeric exports due to rising demand in developed and emerging nations. Anticipations suggest a decrease of 20–25% in turmeric seeding, particularly in areas like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, due to shifting priorities among farmers. Turmeric exports during April to August 2023 saw an increase of 11.51% compared to the same period in 2022. However, in August 2023, there was a drop in exports compared to July and August 2022, signaling fluctuations. In the major spot market of Nizamabad, turmeric prices dropped by -0.72% to 13620.2 Rupees. From a technical perspective, the market observed short covering, with a 1.73% drop in open interest, settling at 13040, while prices rose by 104 rupees. Support for turmeric stands at 13614, with potential testing of 13280 on the downside, while resistance is likely at 14290, with potential testing of 14632 if surpassed.

Trading Ideas:

* Turmeric trading range for the day is 13280-14632.
* Turmeric gained due to the potential for yield losses caused by the crop's unfavourable weather.
* However, upside seen limited amid improved crop condition due to favorable weather condition.
* Expectations for a 20–25 percent decline in turmeric seeding this year
* In Nizamabad, a major spot market, the price ended at 13620.2 Rupees dropped by -0.72 percent.
 

JEERA

Jeera experienced a significant surge of 5.98%, settling at 42540, mainly due to short covering following a recent price drop. Adequate soil moisture and favorable weather conditions are expected to enhance sowing activities, supporting the upcoming jeera crop. Stockists are showing interest in purchasing amid recent price declines, prompting short covering. The availability of quality crop remains limited, further supporting the market. However, the global demand for Indian jeera has declined as buyers opt for other origins like Syria and Turkey due to comparatively higher prices in India. This scenario has suppressed export activity, with Indian jeera prices remaining competitive globally but not favoring exporters at present. Cumin demand is predicted to exceed the expected supply this year, with a gap of 20 lakh bags, as per forecasts by FISS. Jeera exports during April to August 2023 dropped by 23.76% compared to the same period in 2022. In August 2023, exports declined compared to July and August 2022, indicating a considerable drop in overseas demand. In the major spot market of Unjha, jeera prices rose by 0.84% to 44135.25 Rupees. From a technical perspective, the market observed short covering, with a 2.29% drop in open interest, settling at 3072, while prices increased by 2400 rupees. Support for jeera stands at 41120, potentially testing 39690 on the downside, while resistance is likely at 43260, with potential testing of 43970 if surpassed.

Trading Ideas:

* Jeera trading range for the day is 39690-43970.
* Jeera on short covering after prices dropped as adequate soil moisture, and favorable weather condition for crop will boost sowing.
* The upcoming sowing of jeera that is expected to remain normal due to favorable weather condition.
* Stockists are showing interest in buying on recent downfall in prices triggering short covering.
* In Unjha, a major spot market, the price ended at 44135.25 Rupees gained by 0.84 percent.

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