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GOLD

Gold prices inched up by 0.08%, settling at 60111, driven by indications of slowing U.S. inflation, suggesting a potential pause in Federal Reserve interest rate hikes. The significant drop in U.S. consumer inflation for October, with an annual headline CPI growth of 3.2%, below estimates of 3.3%, marks the slowest inflation growth in over two years. Federal Reserve Chairman Jerome Powell emphasized the commitment to tightening monetary policy to control inflation, considering it a priority. However, Richmond Federal Reserve Bank President Thomas Barkin noted that supply shortages partially offset core inflation, expressing caution about a smooth return to the 2% target for Core CPI. Despite progress in inflation control, Barkin urged the Fed to do more to address demand and inflation concerns. The latest inflation figures favor maintaining interest rates between 5.25-5.50%, as reflected in declining Retail Sales, primarily influenced by reduced automobile demand due to higher interest rates impacting household living costs. From a technical standpoint, the gold market experiences short-covering, with a -6.06% drop in open interest to 9470, while prices rose by 46 rupees. Support is identified at 59935, with a potential test of 59760 below, and resistance is anticipated at 60365, with a breakthrough possibly leading to a test of 60620.

Trading Ideas:

* Gold trading range for the day is 59760-60620.
* Gold prices held firm as slowing inflation in U.S. bolstered the view that Fed might be done with raising interest rates.
* US Retail Sales contracted at a slower pace of 0.1% against a 0.3% estimate.
* The US headline CPI rose at 3.2%, its slowest pace for two years.
 

SILVER

Silver surged by 1.09%, settling at 72372, fueled by softer-than-expected U.S. CPI data, heightening expectations that the Federal Reserve might not raise rates and could cut them by May. Market expectations indicate a 50 basis-point rate cut by July. The U.S. experienced a slowdown in annual consumer price growth to 3.2% in October from 3.7% in September, with core consumer prices marking the smallest year-over-year increase since September 2021. Additionally, U.K., Germany, and France inflation data suggested moderating price pressures. Despite a 0.5% monthly decline in German producer prices, retail sales defied expectations with only a 0.1% decrease, underscoring economic resilience. The probability of a December rate hike by the Fed is now considered nil, and there's a 50% chance of a cut in May 2024, favoring precious metals. Moody's recent downgrade of the U.S. credit rating outlook to negative due to fiscal deficits and political standoffs in Washington also supported silver prices. From a technical perspective, silver experiences short-covering, with a -1.77% drop in open interest to 18217, coupled with a price increase of 779 rupees. Support is identified at 71815, with a potential test of 71265 below, and resistance is anticipated at 72820, with a breakthrough possibly leading to a test of 73275.

Trading Ideas:

* Silver trading range for the day is 71265-73275.
* Silver gains after softer-than-expected U.S. CPI data
* Producer prices in the country fell by 0.5% mom in October 2023, logging the steepest decline since April 2020
* US retail sales decreased by 0.1% in the period, defying the consensus of a 0.3% drop and pointing to the economy's resilience.
 

CRUDE OIL

Crude oil experienced a decline of -1.29%, settling at 6424, driven by record-high U.S. output despite positive demand signals from China. The U.S. Energy Information Administration adjusted its crude output growth forecast to 12.9 million bpd in 2023, slightly below previous estimates. The International Energy Agency, along with OPEC+, raised oil demand growth projections for the year, citing unexpected production growth in the U.S. and Brazil. However, the IEA's statement contradicted OPEC's assessment of strong growth trends and healthy fundamentals. In the U.S., crude oil stocks increased by 1.335 million barrels, following a significant 11.9 million barrels jump in the previous week. This rise, although slightly below market expectations, contributes to the overall market sentiment. From a technical standpoint, crude oil observes long liquidation, with a -22.55% drop in open interest to 3971, accompanied by a price decrease of -84 rupees. Support is identified at 6362, with a potential test of 6300 below, and resistance is anticipated at 6517, with a breakthrough possibly leading to a test of 6610.

Trading Ideas:

* Crudeoil trading range for the day is 6300-6610.
* Crude oil dipped amid record high output in US.
* EIA raised its forecast for this year's crude output growth by less than expected
* IEA said that the oil market won't be as tight as initially thought for the current quarter

 

NATURAL GAS

Natural gas prices experienced a notable uptick, closing 3.92% higher at 270.1, driven by forecasts of colder weather and increased heating demand until the end of November. This surge was further fueled by record gas flows to liquefied natural gas (LNG) export plants. The Lower 48 U.S. states observed a rise in average gas output to 107.3 billion cubic feet per day (bcfd) in November, surpassing the previous record of 104.2 bcfd in October. However, a recent downtrend indicated a potential drop to a one-week low of 105.9 bcfd. Despite the recent increase in natural gas production in North Dakota, reaching a record 3.440 bcfd in September, concerns arose as gas flaring also saw a slight uptick, reaching 0.182 bcfd compared to 0.154 bcfd in August. Meteorologists' projections suggested a deviation from the warmer-than-normal weather until November 21, anticipating a shift towards colder temperatures from November 22-30. In anticipation of colder weather, the London Stock Exchange Group (LSEG) forecasted a rise in U.S. gas demand, including exports, from 111.3 bcfd to 113.9 bcfd next week.Technically, the market showed signs of short covering, with a notable drop in open interest by -39.44% to settle at 21336. Despite this decline, prices rose by 10.2 rupees. Support for natural gas was identified at 259.9, and a breach below could lead to a test of 249.7 levels. On the upside, resistance was anticipated at 276.4, with a potential move above indicating a test of 282.7.

Trading Ideas:

* Naturalgas trading range for the day is 249.7-282.7.
* Natural gas gained on forecasts for colder weather and more heating demand
* Average gas output in the Lower 48 U.S. states rose to 107.3 bcfd so far in November
* Over the past three days, output was on track to drop by about 2.6 bcfd to a preliminary one-week low of 105.9 bcfd.


 

COPPER

Copper prices saw a modest uptick of 0.54%, closing at 711.95, propelled by a weakened U.S. dollar following softer inflation data, which led to speculation about the Federal Reserve halting interest rate hikes. China's economic activity in October showed mixed signals with accelerated industrial output growth and retail sales surpassing expectations. However, the property sector continued to struggle, experiencing a sharper decline in sales and investment. To boost the economy, China widened its budget deficit, injecting an additional CNY 1 trillion into manufacturing and infrastructure development, positively impacting copper outlook. In efforts to support the debt-ridden property developers, reports surfaced about the People's Bank of China (PBoC) considering fresh CNY 1 trillion liquidity injections. Concurrently, SHFE inventories dropped by 14% to 35,000 tonnes, indicating a potential increase in demand. The PBoC contributed to liquidity with a CNY 1.45 trillion one-year medium-term lending facility (MLF), injecting a net CNY 600 billion into the banking system, the largest since 2016. From a technical standpoint, the market exhibited short covering, as open interest decreased by -7.03% to 5342, while prices rose by 3.8 rupees. Copper found support at 709.2, and a breach could test 706.2 levels, while resistance was identified at 714, with a potential move above leading to testing 715.8.

Trading Ideas:

* Copper trading range for the day is 706.2-715.8.
* Copper gains as the dollar weakened after softer U.S. inflation data
* China's October economic activity perked up as industrial output grew at a faster pace
* China's property sales fell at a faster pace in October and investment in real estate slumped

 

ZINC

Zinc prices displayed a robust uptrend, closing 1.31% higher at 232.7, primarily fueled by a significant reduction in stocks in LME-certified warehouses, plummeting by over 50% since September to 68,125 tonnes. The notable 30% increase in canceled orders suggests further zinc departure from the LME system. The combination of dwindling inventories and substantial zinc orders contributed to December contract premiums of $3.5 and $8 per ton over three-month and January contracts, respectively. In China, economic indicators portrayed positive momentum with retail sales surging 7.6% YoY in October, exceeding market expectations and marking the tenth consecutive month of growth. Industrial production also outperformed forecasts, growing by 4.6% YoY in October, the fastest pace since April. The People's Bank of China injected CNY 1.45 trillion through a one-year MLF, maintaining an unchanged interest rate of 2.50%, resulting in a substantial net CNY 600 billion fund injection, the largest since 2016. From a technical standpoint, the market demonstrated fresh buying interest, with open interest rising by 10.02% to settle at 4906, while prices increased by 3 rupees. Support for zinc was identified at 230.1, with a potential test of 227.4 levels if breached. On the upside, resistance was seen at 234.7, and a move above could lead to testing 236.6.

Trading Ideas:

* Zinc trading range for the day is 227.4-236.6.
* Zinc gains boosted by lower stocks in LME warehouses
* LME stocks fell to 68,125 tonnes by more than 50% since the start of September.
* China's retail sales rose by 7.6% year-on-year in October 2023


 

ALUMINIUM

Aluminium experienced a 0.49% increase, closing at 206.1, propelled by favorable industrial production data from China. Despite optimism from robust retail sales (7.6% YoY growth in October) and industrial production (4.6% YoY growth), challenges in China's real estate sector and a strengthened dollar tempered gains. China's aluminium production reached a record high of 3.62 million metric tons in October, a 6% YoY surge, attributed to increased profits for smelters and sustained domestic demand, particularly from the new energy sector. The consistent growth in retail turnover for ten consecutive months, coupled with the fastest industrial production expansion since April, reflects China's economic resilience. Notably, the new energy sector, particularly solar, has been a driving force behind the steady demand for aluminium. With profits for the light metal tripling to 3,000 yuan per ton compared to the previous year, operations are well-supported, according to CITIC Futures. From a technical perspective, the market shows signs of fresh buying, evidenced by a 1.79% increase in open interest to 2960, alongside a 1 rupee uptick in prices. Support for Aluminium is identified at 205.4, with potential downside testing of 204.6. On the upside, resistance is expected at 206.7, and a breakthrough could lead to further testing of 207.2.

Trading Ideas:

* Aluminium trading range for the day is 204.6-207.2.
* Aluminium gains after positive industrial production data from China boosted sentiment
* However, gains were capped by weakness in the country’s real estate sector.
* China Oct aluminium production at record monthly high

 

COTTON

The cotton market experienced a marginal decline of -0.28% to settle at 57340, driven by profit booking following earlier support from India's anticipated 7.5% decrease in cotton production for 2023/24. Factors such as lower planted area and the impact of El Nino weather conditions contributed to this decline. The Cotton Association of India (CAI) foresees an increase in imports to 2.2 million bales, up from the previous year's 1.25 million bales. In the U.S., the 2023/24 cotton balance sheet shows slightly lower consumption but higher production and ending stocks. The global cotton balance sheet for the same period indicates reduced consumption but higher production and stocks. India's 2022/23 production saw a 300,000-bale increase, according to the CAI. Despite the organization's final estimate for the 2022-23 season being slightly higher at 31.8 million bales, there is a notable disparity compared to the government's third advance estimate of 34.3 million bales. North Maharashtra faces a 25% decline in cotton production due to insufficient rainfall, with output potentially dropping to 15 lakh tonnes. In Rajkot, a significant spot market, cotton prices dropped to 26908 Rupees, marking a -0.2% decrease. From a technical perspective, the market is undergoing long liquidation, evidenced by a -4.76% drop in open interest to settle at 100. With prices down -160 rupees, support for Cottoncandy is identified at 57200, with a potential test of 57060. Resistance is anticipated at 57480, and a move above could lead to a testing of 57620 levels.

Trading Ideas:

* Cottoncandy trading range for the day is 57060-57620.
* Cotton dropped  on profit booking after prices gains as India's cotton production in 2023/24 is likely to fall 7.5%
* Cotton production likely to decline by 25% in north Maha
* USDA cut U.S. production in 2023/24 to 12.8 million bales
* In Rajkot, a major spot market, the price ended at 26908 Rupees dropped by -0.2 percent.

 

TURMERIC

Turmeric prices settled marginally lower at 13524, decreasing by -0.03% due to sluggish buying activity in anticipation of stock releases before the new crops in January 2024. However, limited downside is expected as adverse weather conditions may cause yield losses. Improved crop conditions, attributed to favorable weather, are exerting pressure. Harvest readiness is projected for January to March, but the drier October forecast by IMD could impact crop growth. Despite the current slow buying pace, decreasing supplies and support from enhanced export opportunities are anticipated to maintain price stability. The demand surge for turmeric in developed and emerging nations has boosted exports by 25%. Concerns over a 20–25% decline in turmeric seeding, especially in Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana, are influenced by shifting farmer priorities. Turmeric exports from April to August 2023 rose by 11.51% to 82,939.35 tonnes compared to the same period in 2022. However, August 2023 witnessed an 18.20% drop from July 2023 and a 6.67% decline from August 2022. In the Nizamabad spot market, turmeric prices ended at 13445.65 Rupees, reflecting a -0.7% decrease. Technically, the market is undergoing long liquidation, evident in a -0.04% drop in open interest to settle at 12605. With prices down by -4 rupees, Turmeric finds support at 13352, and a breach could test 13180 levels. Resistance is expected at 13748, and a breakthrough could lead to testing 13972 levels.

Trading Ideas:

* Turmeric trading range for the day is 13180-13972.
* Turmeric settled flat in expectation of release of stocks ahead of commencement of new crops
* However downside seen limited due to the potential for yield losses caused by the crop's unfavourable weather.
* Expectations for a 20–25 percent decline in turmeric seeding this year
* In Nizamabad, a major spot market, the price ended at 13445.65 Rupees dropped by -0.7 percent.

 

JEERA

Jeera prices registered a decline of -1.93% to settle at 42320, driven by favorable weather conditions and sufficient soil moisture encouraging robust sowing activities. The upcoming sowing season is expected to remain normal, further supported by stockists displaying interest in buying due to recent price drops and triggering short covering. However, global demand for Indian jeera has diminished, with buyers preferring other origins like Syria and Turkey due to higher prices in India. This trend is likely to keep export activities subdued in the coming weeks. The competitive pricing of Indian jeera in the global market has not translated into increased exports, as exporters face challenges amid current market dynamics. Despite the potential for China to purchase Indian cumin in October-November before the arrival of new cumin, uncertainties prevail. According to FISS forecasts, cumin demand is anticipated to surpass 85 lakh bags this year, while the likely supply stands at 65 lakh bags. However, jeera exports from April to August 2023 recorded a significant decline of 23.76%, totaling 69,779.04 tonnes compared to the same period in 2022. August 2023 exports also dropped by 66.98% compared to August 2022. In the major spot market of Unjha, Jeera prices ended at 45429.75 Rupees, marking a slight gain of 0.04%. Technically, the market is undergoing long liquidation, evident in a -3.26% drop in open interest to settle at 4098. With prices down by -835 rupees, Jeera finds support at 41670, and a breach could test 41010 levels. Resistance is expected at 42960, with a potential breakthrough leading to testing 43590 levels.

Trading Ideas:

* Jeera trading range for the day is 41010-43590.
* Jeera  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 45429.75 Rupees gained by 0.04 percent.

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