IGI Logo

Gold 

Gold prices surged by 1.44% to close at 60,073, driven by concerns over a broader Middle East conflict, prompting investors to flock to safe-haven assets. Federal Reserve Bank of Philadelphia President Patrick Harker emphasized the importance of not increasing borrowing costs to avoid economic strains. Housing starts in September increased by 7%, reaching 1.358 million units, slightly below the expected 1.38 million, with August data revised down to 1.269 million units, marking a 7.2% decline in housing construction compared to September 2022. Building permits for future home construction dipped 4.4% in the last month, totaling 1.473 million permits, which, though lower, exceeded the consensus expectation of 1.455 million permits. August's figure was downwardly revised to 1.541 million, resulting in a 7.2% decrease in building permit issuances for the year. In Federal Reserve commentary, Richmond Fed President Thomas Barkin highlighted that higher long-term borrowing costs are dampening demand, while Minneapolis Fed President Neel Kashkari expressed concerns about persistently high inflation. From a technical perspective, the market witnessed fresh buying, with open interest increasing by 5.16% to settle at 14,481. Meanwhile, gold prices rose by 855 rupees. Gold is currently finding support at 59,610, and if it falls below this level, it may test 59,155. On the upside, resistance is expected at 60,390, and a breakthrough could push prices to 60,715.

Trading Ideas:

* Gold trading range for the day is 59155-60715.
* Gold gains as fears of a wider conflict in the Middle East prompted investors to seek safe haven assets.
* Fed’s Harker said the central bank should not create new pressures in the economy by increasing the cost of borrowing.
* Housing starts rose by 7% in September to a seasonally adjusted annual rate of 1.358 million units

Silver

Silver prices rose by 0.46% to reach 71,895 amid growing tensions in the Middle East, driving investors to seek the safe-haven metal. Meanwhile, Neel Kashkari, President of the Minneapolis Federal Reserve Bank, expressed concern about lingering high inflation, hinting at a slower-than-expected decline. In the US, housing starts surged by 7% in September, reaching 1.36 million, rebounding from a three-year low in the previous month but falling slightly short of estimates. Market attention is now focused on Federal Reserve Chair Jerome Powell's upcoming speech, as traders seek clarity on the Fed's stance following recent dovish comments from US policymakers. Currently, there's a 60% probability that the Fed will maintain interest rates for the remainder of the year. From a technical perspective, the market is experiencing short covering with a 3.23% drop in open interest, settling at 18,921, while prices increased by 328 rupees. Silver finds support at 71,175 and could test 70,455 if it falls below. Resistance is expected at 72,680, and a move above that level might drive prices to test 73,465.

Trading Ideas:

* Silver trading range for the day is 70455-73465.
* Silver rose advances as Middle East tensions spur safe haven demand
* Fed’s Kashkari said it has taken much longer than expected for inflation to come down, and it is "still too high."
* Traders pricing 60% chance of further U.S. rate hike

Crude oil 

Crude oil prices remained unchanged, settling at 7192 per barrel, amid reports suggesting the U.S. may ease sanctions on Venezuela. This development, in addition to concerns over the Israel-Hamas conflict potentially expanding, influenced oil market dynamics. Libya announced plans to increase its oil production to two million barrels per day by the end of the decade, which could add to global supply. In contrast, U.S. oil output from major shale-producing regions is expected to decline for the third consecutive month in November, reaching its lowest level since May 2023, according to the U.S. Energy Information Administration (EIA). U.S. oil production is forecasted to fall to 9.553 million barrels per day in November, down from 9.604 million in October. Despite the expected decline in U.S. shale oil production, the country's overall crude oil production reached a record 13.2 million barrels per day, surpassing the previous peak set in 2020. However, the growth in U.S. oil output has been gradual in recent years as companies have prioritized returning cash to shareholders through dividends and buybacks over increasing production. From a technical standpoint, the market is currently experiencing long liquidation, with open interest dropping by -3.4% to settle at 4,000. Key support levels for crude oil are at 7040, with a potential test of 6888 if it falls below this level. Resistance is likely to be observed at 7436, and a breakout could push prices to 7680.

Trading Ideas:

* Crudeoil trading range for the day is 7128-7618.
* Crude oil rose as the risk of escalating conflict in the Middle East threatened to disrupt oil supplies
* Crude oil inventories in the US fell by 4.491 million barrels in the week ending October 13, 2023
* Iran calls for oil embargo on Israel, OPEC+ plans no immediate action

Natural gas

Natural gas prices edged up by 0.2% to settle at 256.3 as several factors influenced the market. First, the amount of natural gas flowing to liquefied natural gas (LNG) export plants reached near-record levels. Additionally, cooler weather and anticipated higher heating demand in the coming two weeks boosted prices. However, meteorologists predicted milder weather than usual through early November, which may keep demand lower for this time of year. A critical aspect impacting prices is the substantial gas output, with average production in the Lower 48 U.S. states reaching 103.6 billion cubic feet per day in October. While this is up from September, traders are cautious about lower-than-usual demand despite the record output. U.S. gas demand, including exports, is expected to hover around 97.7 billion cubic feet per day this week and the next, with fluctuating forecasts. In terms of exports, pipeline shipments to Mexico dipped slightly in October compared to the previous month. However, LNG feedgas reached 14.6 billion cubic feet per day on a daily basis, marking the highest level since April 2023. From a technical standpoint, the market saw a short covering, with a 6.28% decrease in open interest, settling at 28,503. Prices increased by 0.5 rupees. Support levels for natural gas are at 252.3, and a breach of this could test the 248.2 mark. On the upside, resistance is anticipated at 261.8, and a move beyond this level could push prices to 267.2.

Trading Ideas:

* Naturalgas trading range for the day is 248.2-267.2.
* Natural gas climbed with the amount of gas flowing to LNG export plants back near record highs
* Support also seen amid forecasts for cooler weather and higher heating demand over the next two weeks than previously expected.
*  Average gas output in the Lower 48 U.S. states rose to an average of 103.6 bcfd so far in October


Copper

Copper prices saw a modest 0.19% increase to reach 700.45 per unit. This uptrend was primarily driven by a strong demand outlook and concerns about future supply. The demand for copper remains robust, especially from the renewable energy and infrastructure sectors. A significant development contributing to these concerns is Glencore's announcement of closing its Mount Isa copper operations in Australia by the second half of 2025. Despite a recent surge in copper inventories, fears of future shortages persist, as demand continues to outpace supply projections.Two key reports, one from the EIA and the other from the International Copper Association, forecast a 26% increase in copper supply by 2035, significantly below the anticipated 50% rise in demand. In this context, the market is closely monitoring the dynamics between supply and demand. Additionally, positive economic news emerged from China, as its Q3 2023 GDP expanded by 4.9%, surpassing market expectations. This growth was attributed to sustained monetary stimulus, compensating for weak foreign demand and the lingering property crisis. From a technical perspective, the market observed short covering with a 14.33% drop in open interest, settling at 6848. Copper prices increased by 1.35 rupees. Copper now finds support at 698.1, with a possible test of 695.8 if this level is breached. On the upside, resistance is expected at 703.9, with potential testing of 707.4 if prices break through this level.

Trading Ideas:

* Copper trading range for the day is 695.8-707.4.
* Copper gained with bright demand outlook and concerns about longer-term supply supporting the market.
* Demand for copper has been robust, supported by strong consumption from the renewable energy and infrastructure sectors.
* China Q3 GDP growth above estimates

Zinc

Zinc prices rose by 0.32% to 219.6 due to robust Chinese economic data, enhancing demand prospects. However, the International Lead and Zinc Study Group stated that the global refined zinc market is now expected to have a surplus of 248,000 metric tons in 2023, a significant shift from the earlier projected deficit of 45,000 tons, primarily due to weaker demand. Global zinc demand is expected to grow by 1.1% to 13.59 million tons this year, lower than the initial projection of 13.80 million tons in April, mainly due to tight monetary conditions. This change from a deficit to surplus in the zinc market is attributed to lower-than-expected demand and higher-than-expected production. The ILZSG has revised its global usage estimates, reducing the growth forecast for 2023 from 2.1% to 1.1%. Europe is the weakest point, with an expected 1.8% contraction in zinc demand due to a slowdown in the construction sector, a major consumer of galvanized steel made from zinc. Europe's zinc production has also declined due to high energy costs, with a drop of 11.6% last year and an anticipated 2.6% decrease this year. From a technical perspective, the market is experiencing short covering, with a 16.81% decrease in open interest, settling at 2558, while prices have increased by 0.7 rupees. Zinc finds support at 219, and if it goes below this level, it could test 218.3. On the upside, resistance is likely at 220.5, and a break above that level could push prices to 221.3.

Trading Ideas:

* Zinc trading range for the day is 218.3-221.3.
* Zinc gains after better-than-expected economic data from China
* The global refined zinc market is headed for a surplus of 248,000 metric tons this year
* The zinc market's shift to surplus after two years of supply deficit is down to weaker-than-expected demand and higher-than-expected production.

Aluminium

Aluminium prices edged up by 0.37% to reach 202.85 due to China's strong primary aluminium output in September, up 5.3% year-on-year. This growth is attributed to robust demand and dwindling aluminium inventories. China, the world's leading aluminium producer, produced 3.58 million metric tons of primary aluminium in September, with notable increases in the Yunnan province, a major aluminium-producing region. Furthermore, aluminium stocks on the Shanghai Futures Exchange hit their lowest point since March 2019, decreasing by 66% from the previous year. In the first nine months of 2023, primary aluminium production in China rose by 3.3% compared to the same period in 2022. The Chinese economy outperformed expectations, growing by 4.9% in Q3 2023, driven by sustained monetary stimulus amid weak foreign demand and a lingering property crisis. Retail sales in China also saw an uptick, increasing by 5.5% year-on-year in September 2023, surpassing market estimates of 4.9%. From a technical standpoint, the market experienced short covering as open interest dropped by 14.05% to settle at 2868. Prices rose by 0.75 rupees. Currently, Aluminium finds support at 202.4 and, if breached, may test 201.8 levels. On the upside, resistance is expected at 203.4, and a breakthrough could push prices to 203.8.

Trading Ideas:

* China Retail sales rise the most in 4 monthss

Cottoncandy

Cottoncandy prices dipped by 0.85% to settle at 58380 due to profit booking, following a recent boost in prices. The USDA's October WASDE report attributed this price surge to a decrease in U.S. cotton production for 2023/24, mainly due to lower yields in Texas. Additionally, Brazil is expected to outpace the U.S. in cotton production, with their exports nearing historic levels. Australia also saw a spike in cotton exports to China, thanks to improved trade relations. The Cotton Association of India (CAI) revised their crop production estimate for the 2022-23 season to 31.8 million bales, slightly up from their earlier projection. This contrasts with the government's estimate of 34.3 million bales for the season. The Indian Cotton Federation anticipates a cotton production of 330-340 lakh bales in the 2023-24 season, with sowing already exceeding 12.7 million hectares. However, some regions in Telangana witnessed a decline in cotton area due to unfavorable seasonal conditions. On the technical front, the cotton market is experiencing fresh selling pressure. Open interest increased by 2.7%, settling at 114, while prices fell by 500 rupees. Support for Cottoncandy is at 58280, potentially testing 58170, while resistance is expected at 58500, with the possibility of prices reaching 58610.

Trading Ideas:

* Cottoncandy trading range for the day is 58170-58610.
* Cotton dropped  on profit booking after prices gained as USDA cut U.S. production in 2023/24 to 12.8 million bales.
* The USDA also said Brazil's cotton production in 2023/24 will exceed that of the United States for the first time
* Australia's exports of cotton to China ballooned to 61,319 metric tons worth $130 million in August
* In Rajkot, a major spot market, the price ended at 27452.65 Rupees dropped by -0.24 percent.

Turmeric

Turmeric prices faced a setback yesterday, declining by 1.3% to 14,130 Rupees per ton. This dip can be attributed to profit-taking by traders. The improvement in crop conditions, thanks to favorable weather, contributed to this decline. However, the downside may be limited as concerns about potential yield losses due to unfavorable October weather conditions loom large. Crop conditions currently look satisfactory, with the harvest expected between January and March. The India Meteorological Department (IMD) predicts drier-than-average weather for October, which could impact crop growth. Despite the recent drop, the market shows support due to increased buying activity and diminishing supplies, which are likely to maintain price stability. Moreover, improved export opportunities are on the horizon, with a 25% increase in exports driven by rising demand in both developed and emerging nations. The shift in priorities among farmers is expected to lead to a 20-25% decrease in turmeric seeding this year, particularly in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Notably, turmeric exports from April to August 2023 increased by 11.51% compared to the same period in 2022, reaching 82,939.35 tonnes. From a technical perspective, the market is witnessing fresh selling with a slight increase in open interest, settling at 13,845. Prices have fallen by 186 Rupees. Support for turmeric is currently at 13,904 Rupees, with the possibility of testing 13,680 Rupees. On the upside, resistance is expected at 14,374 Rupees, with the potential for prices to reach 14,620 Rupees.

Trading Ideas:

* Turmeric trading range for the day is 13680-14620.
* Turmeric dropped due to profit booking amid improved crop condition due to favorable weather condition.
* However downside seen limited due to the potential for yield losses caused by the crop's anticipated unfavourable October weather.
* Support is also evident for improved export opportunities.
* In Nizamabad, a major spot market, the price ended at 13686.2 Rupees dropped by -1.05 percent.

Jeera

Jeera prices experienced a notable decline of -3.07% on the previous day, settling at 56365, primarily due to profit booking. The sluggish export demand played a role in this drop, with global buyers showing a preference for alternative sources like Syria and Turkey because of the comparatively higher prices in India. However, the downside in prices remained limited as the supply of quality crops was constrained. Indian jeera continued to be competitive in the global market, even though this didn't favor exporters, leading to subdued overseas demand. China, a significant buyer of Indian jeera, reduced its purchases in recent months, impacting India's overall exports. Furthermore, the uncertainty in the market was heightened by the possibility of China resuming purchases in October-November before the arrival of the new cumin crop.  Export data for Apr-Aug 2023 showed a significant drop of 23.76% compared to the same period in 2022. Jeera exports in August 2023 were 2.61% lower than the previous month and a substantial 66.98% lower than August 2022. In the major spot market of Unjha, jeera prices closed at 58153.05 Rupees, down by -0.5%. From a technical perspective, the market witnessed fresh selling, marked by a 1.67% increase in open interest to reach 4371. The price decline amounted to -1785 Rupees. Support levels for jeera were identified at 55700, with potential for a test of 55020, while resistance was anticipated at 57580, which, if breached, could drive prices to test 58780.

Trading Ideas:

* Jeera trading range for the day is 55020-58780.
* Jeera dropped due to profit booking amid demand due to sluggish export demand.
* 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 58153.05 Rupees dropped by -0.5 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer