Commodity Research Evening Track By Kotak Securities Ltd
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Gold rises ahead of US economic data, geopolitical tensions
Comex Gold edged up moderately to trade near $2,680 per troy ounce attributed to ongoing global uncertainties, including geopolitical tensions in the Middle East and upcoming U.S. elections. Additionally, the Federal Reserve's monetary easing and interest rate cuts have boosted gold's appeal. The ISM data also indicated that US services activity grew at its fastest rate in over a year in September. Markets now estimate around a 65% chance that the Fed will opt for a modest 25 bps rate cut in November.
WTI Crude oil continue to surge to trade above $75 per barrel on rising tensions in the Middle East on global oil supply. While a direct attack on Iran's oil facilities is technically possible but market believe, it is the least likely course of action for Israel due to the potential backlash from global partners and a potentially severe response from Iran. The premium priced into markets due to geopolitical tensions has been shrinking over the years, suggesting that markets are becoming less sensitive to these events. Additionally, OPEC's spare capacity provides a buffer against supply disruptions.
LME base metals edged higher amid China’s economic stimulus measures continued to support market sentiment amid hopes for stronger demand from the top metals consumer. LME Copper steadied around $9,937 per ton on Friday after losing 2% in the previous session, with trading volumes remaining subdued as Chinese markets were still closed for a week-long holiday.LME Aluminum and Zinc is up 1.70% and 1.32% respectively.
US Natural gas futures trading steady after gaining 2.9% in the previous session on weather forecasts anticipating colder temperatures on the East Coast in the latter half of October were cited as the primary driver behind the rally. These forecasts suggest an increase in natural gas demand for heating purposes, which is typically the main driver of price fluctuations in the futures market.
Today, Traders now eye Friday’s Non-farm Payrolls report, expecting 140K jobs added in September, slightly below August’s 142K, with the unemployment rate forecast to remain unchanged at 4.2%
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