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GOLD

 
Gold prices experienced a slight decline of -0.55% on the previous day, closing at 60,940, mainly due to a stronger dollar, which was driven by anticipation surrounding the Federal Reserve's upcoming monetary policy announcement. The Fed is expected to keep interest rates unchanged, but the market is closely watching for hints about future rate outlook in the accompanying statement. This could impact gold's performance. Additionally, record-high gold prices may reduce demand in India during the festival season, potentially leading to the lowest purchase volumes in three years, a concern raised by the World Gold Council (WGC). India is the second-largest global consumer of gold, so decreased purchases could influence global prices and potentially help narrow India's trade deficit, thereby supporting the rupee. Global gold demand saw a 6% decline in the third quarter, driven by reduced central bank buying and decreased consumption by jewelers, as reported by the WGC. Despite this, the quarter's demand remained 8% above its five-year average. China, on the other hand, showed growth in gold production and consumption over the first nine months of 2023, and gold ETFs in the country attracted significant inflows during the third quarter. From a technical perspective, the gold market is currently experiencing long liquidation, with a drop in open interest of -2.23% to 14,663, alongside a price decrease of -340 rupees. Gold has a support level at 60,720, and a breach below this could test 60,495. On the upside, resistance is anticipated at 61,355, and a move beyond this level might lead to a test of 61,765.

Trading Ideas:

* Gold trading range for the day is 60495-61765.
* Gold prices fell as the dollar climbed higher ahead of the Federal Reserve's monetary policy announcement
* Indian gold demand loses lustre in peak festive season as prices rally
* Gold demand down with lower central bank buying in Q3, WGC says
 

SILVER

Silver prices dropped by 1.49% to settle at 71669 as the US dollar gained support, driven by expectations that the Federal Reserve would maintain high borrowing costs and the resilient US economy. China's stimulus measures and a weaker dollar due to positive economic data from Europe provided some support for silver. All eyes are now on the upcoming Fed meeting for hints about future guidance. While the Fed is expected to pause rate hikes, it will likely keep rates elevated, which could dampen silver's appeal. In Europe, the European Central Bank's tightening cycle seemed to have ended. The dollar slowed down ahead of the Fed's policy meeting, with uncertainty about the future path of US interest rates. Key data points to note include the US economy's resilience despite successive interest rate hikes, China's recovery driven by government spending and financial support, and a decrease in German consumer price inflation to 3.8% year-on-year in October. Services confidence in the Euro Area also improved, rising to 4.5 in October. From a technical perspective, the market saw an increase in open interest by 10.89% to 18,925, while prices fell by -1086 rupees. Silver's support is now at 71210, with a potential test of 70755 levels if it breaks below. Resistance is likely at 72435, and a move above could lead to prices testing 73205.

Trading Ideas:

* Silver trading range for the day is 70755-73205.
* Silver dropped as dollar seen supported amid expectations the Fed will keep borrowing costs elevated for some time
* The dollar slowdown ahead of the Fed’s policy meeting, which could provide more clues on the future path for US interest rates.
* The US economy recently proved resilient and strong despite the successive interest rate hikes in the past two years.
 

CRUDE OIL

Yesterday, crude oil prices dropped by 1.42% to settle at 67.82 per barrel due to concerns about energy demand, exacerbated by disappointing manufacturing activity in China. However, natural gas prices rose on forecasts of colder weather and increased heating demand. Geopolitically, Israel expanded ground operations in Gaza, causing concerns about a broader conflict, although tensions temporarily eased. Traders are keeping an eye on key monetary policy decisions from the Federal Reserve (Fed), Bank of Japan (BoJ), and Bank of England (BoE), as well as economic data from China and the United States to assess demand prospects. The World Bank predicts that global oil prices will average $90 per barrel in the fourth quarter of 2023 but fall to an average of $81 in 2023 due to slowing growth and reduced demand. However, the bank warns that a further escalation in the Middle East conflict could lead to a significant spike in prices. Despite the conflict, oil prices have risen only modestly, unlike other commodities such as agricultural products and metals. From a technical perspective, the crude oil market is currently experiencing fresh selling pressure, with a notable increase in open interest by 18.11% to reach 7,070. Prices have fallen by 98 rupees. Support for crude oil is seen at 6,712, with a potential test of 6,641 levels if it goes below. On the upside, resistance is likely at 6,912, and a move above this level could lead to prices testing 7,041.

Trading Ideas:

* Crudeoil trading range for the day is 6641-7041.
* Crude oil prices dropped as concerns about the outlook for energy demand weighed
* World Bank said it expected global oil prices to average $90 a barrel in the fourth quarter, and to drop to an average of $81 a barrel over next year
* US EIA cuts 2024 world oil demand growth forecast
 

NATURAL GAS

Natural gas experienced a significant decline of -5.31% to settle at 279.7 due to revised weather forecasts predicting colder temperatures and increased heating demand in the upcoming weeks. US utilities added 74 billion cubic feet of gas to storage, slightly below market expectations but significantly exceeding the five-year average, as per the latest data from the EIA. Gas production in the Lower 48 states surged to a record high, increasing to 104.1 billion cubic feet per day (bcfd) in October. However, meteorologists project a shift from the current colder weather to mostly normal conditions from Nov. 3-14, indicating reduced demand for gas. This forecasted milder weather is expected to cause a drop in US gas demand to 104.2 bcfd from 109.2 bcfd. Additionally, pipeline exports to Mexico declined, while gas flows to major US LNG export plants increased but remained below previous record highs. Technically, the market indicates long liquidation with open interest remaining unchanged at 17,721. Despite this, prices dropped by -15.7 rupees. Support for Natural gas stands at 273.8, with a potential test of 267.8, while resistance is likely at 289.4, potentially leading to price testing at 299 upon a breakthrough.

Trading Ideas:

* Naturalgas trading range for the day is 268.1-318.9.
* Natural gas jumped on forecasts for colder weather and higher heating demand over the next two weeks than previously expected.
* The latest data from the EIA showed that US utilities added 74 billion cubic feet of gas into storage
* Average gas output in the Lower 48 U.S. states rose to an average of 104.1 billion cubic feet per day (bcfd) so far in October
 

COPPER

Copper prices dipped by -0.19% to 707.25 due to a surprising contraction in Chinese manufacturing in October. China's PMI dropped to 49.5, dampening hopes of an economic rebound. To counter this, Beijing expanded its budget by CNY 1 trillion for manufacturing investments, aiming to boost industrial input demand and alleviate concerns of low residential construction demand. Concurrently, copper stocks at exchanges in Shanghai and London plummeted by 40%, signaling increased physical demand in Asia. The global refined copper market recorded a 33,000 metric ton deficit in August, compared to a 30,000 metric ton deficit in July, per the International Copper Study Group (ICSG). However, the market showed a 99,000 metric ton surplus for the first 8 months of the year, contrasting with a 313,000 metric ton deficit in the same period last year. In August, world refined copper output stood at 2.25 million metric tons, with consumption at 2.28 million metric tons. From a technical perspective, the market experienced fresh selling, with a 5.42% increase in open interest, settling at 6962. Copper now finds support at 704.8, with potential testing of 702.3 levels, while resistance is expected at 710, potentially pushing prices to 712.7.

Trading Ideas:

* Copper trading range for the day is 702.3-712.7.
* Copper dropped as manufacturing activities in China unexpectedly contracted in October.
* China's official purchasing managers' index (PMI) fell to 49.5 in October, an official factory survey showed
* Stocks at the SHFE and the LME plummeted by nearly 40% on the week ending October 27th

ZINC

Zinc experienced a 1.06% decline, settling at 219.05, largely influenced by China's economic challenges. China's manufacturing PMI dropped to 49.5 in October, indicating a fragile recovery. The NBS Non-Manufacturing PMI and Composite PMI Output Index also declined. These factors reflect a slump in factory activity and subdued service sector growth. The International Lead and Zinc Study Group predicts a significant shift in the global refined zinc market, transitioning from a projected deficit of 45,000 tons to a surplus of 248,000 metric tons. This unexpected change is due to lower-than-expected demand. World demand for refined zinc in 2023 is estimated to increase by just 1.1%, falling short of earlier expectations. China's refined zinc output in September 2023 showed growth in contrast to expectations, reaching 544,000 metric tons. Cumulative output from January to September recorded a year-on-year increase of 9.84%. Furthermore, domestic zinc alloy production in September increased to 88,200 metric tons. From a technical perspective, the market is witnessing increased selling activity, with a 14.44% rise in open interest, reaching 4,233. Prices have fallen by -2.35 rupees. Zinc's support level is at 218.2, and a breach could lead to a test of 217.3, while resistance is expected at 220.7, with the potential for prices to test 222.3.

Trading Ideas:

* Zinc trading range for the day is 217.3-222.3.
* Zinc dropped as China’s manufacturing PMI fell to 49.5 in October
* The NBS Composite PMI Output Index in China fell to 50.7 in October 2023 from 52.0 in the prior month
* The global refined zinc market was headed for a surplus of 248,000 metric tons this year

 

ALUMINIUM

Aluminium prices experienced a 0.24% decline, closing at 206.5, as China's manufacturing sector unexpectedly contracted in October. This setback raised concerns despite recent signs of economic recovery in the world's second-largest economy. China's official NBS Manufacturing PMI dropped to 49.5 in October, missing market expectations and signaling a decline from the previous month. The Non-Manufacturing PMI also decreased to 50.6, and the Composite PMI Output Index fell to 50.7, the lowest since December 2022. These figures underscore uncertainty about China's economic rebound, leading to calls for more policy support from Beijing. One significant factor impacting aluminium prices is the reduction in production by Chinese smelters in Yunnan province during the dry season. Reduced availability of hydropower resources has prompted four smelters to cut production by 9% to 40% of capacity, with others considering similar moves. Many smelters had shifted operations to Yunnan due to the cost-effectiveness and environmental benefits of hydropower compared to coal. From a technical perspective, the market is witnessing long liquidation, with a 3.78% decrease in open interest, settling at 3054. Prices have dropped by 0.5 rupees. Aluminium finds support at 206.3, with potential for a test of the 206 level. On the upside, resistance is expected at 207, and a break above this level may lead to testing at 207.4.

Trading Ideas:

* Aluminium trading range for the day is 206-207.4.
* Aluminium dropped as China’s manufacturing activity unexpectedly returned to contraction in October
* Chinese aluminium smelters to cut output as Yunnan enters dry season
* The official NBS Non-Manufacturing PMI for China was down to 50.6 in October 2023 from 51.70 a month earlier.

COTTONCANDY

Cottoncandy witnessed a decline of -0.65% settling at 58320, attributed to profit booking subsequent to the recent price surge triggered by the USDA's October WASDE report. The report cut U.S. production for 2023/24 due to lower yields in Texas. Brazil is projected to surpass U.S. cotton production and exports, marking a significant shift. Australia experienced a substantial increase in cotton exports to China, capitalizing on improved trade relations. The Cotton Association of India (CAI) released its final estimate for the 2022-23 cotton season, slightly raising the crop production to 31.8 million bales, although this is lower than the government's estimate of 34.3 million bales for the same period. India anticipates a production of 330-340 lakh bales for the 2023-24 season, with sowing surpassing 12.7 million hectares. However, the following season may witness a 7.5% decline in production due to lower planted area and adverse El Nino weather conditions, with a predicted rise in imports. Technically, the market depicts long liquidation, with a decrease in open interest by -0.93% to settle at 107. Despite this, prices have dropped by -380 rupees. Support for Cottoncandy stands at 58220, potentially testing levels at 58130, while resistance is projected at 58400, potentially leading to price testing at 58490 upon a breakthrough.

Trading Ideas:

* Cottoncandy trading range for the day is 58130-58490.
* Cotton dropped on profit booking after prices rose 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 27498.35 Rupees dropped by -0.49 percent.
 

TURMERIC

The Turmeric market experienced a decrease of -2.07%, settling at 13424, largely due to improved crop conditions favored by good weather. Harvest readiness is expected during January to March, but concerns arise with the anticipation of unfavorable October weather as per IMD projections, potentially affecting crop growth and yield. Despite this, downside potential remains limited as buying activity remains robust, and supplies decrease, ensuring price stability. Turmeric exports have seen a notable uptick, rising by 11.51% in Apr-Aug 2023 compared to the previous year. August 2023, however, showed a drop of 18.20% from July 2023 and a decrease of 6.67% from August 2022, potentially influenced by various market factors. The shifting priorities of farmers in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana have led to expectations of a 20–25% decline in turmeric seeding this year, adding to the complexity of market dynamics. From a technical perspective, the market indicates fresh selling, marked by an increase in open interest by 1.74% to settle at 13455. Despite this, the price has decreased by -284 rupees. Turmeric's support level is set at 13244, with a potential test of 13062, while resistance is expected at 13664, possibly leading to price testing at 13902 upon a breakthrough

Trading Ideas:

* Turmeric trading range for the day is 13062-13902.
* Turmeric dropped 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.
* Expectations for a 20–25 percent decline in turmeric seeding this year
* In Nizamabad, a major spot market, the price ended at 13462.3 Rupees dropped by -0.3 percent.
 

JEERA

The recent decline of Jeera by -5.98% settling at 43710 is attributed to favorable weather conditions boosting sowing activities. Anticipated normal sowing of Jeera is supported by sufficient soil moisture. Stockists are buying due to recent price falls, sparking short covering, while limited availability of quality crop also contributes to market support. However, global demand for Indian Jeera has dwindled as buyers opt for other origins like Syria and Turkey due to comparatively higher prices in India. Export trends show a substantial drop of 23.76% in Apr-Aug 2023 compared to the same period in 2022. August 2023 witnessed a decrease in exports by 2.61% from July 2023 and a significant drop of 66.98% from August 2022, potentially indicating a shift in global preferences. The dynamics of the market are further influenced by the potential for Chinese purchases of Indian cumin in October-November before the arrival of new produce. Despite a predicted higher demand of 85 lakh bags this year, the expected supply is around 65 lakh bags, hinting at a potential shortage. In terms of technical analysis, the market is experiencing long liquidation with a decrease in open interest by -5.97% to settle at 3828. The price has dropped by -2780 rupees. Support for Jeera is projected at 42840, potentially testing levels at 41970, while resistance is anticipated at 45440, with a potential price increase to 47170 upon breakthrough.

Trading Ideas:

* Jeera trading range for the day is 41970-47170.
* Jeera dropped as adequate soil moisture, and favorable weather condition for crop will boost the overall sowing activities.
* 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 47963.35 Rupees dropped by -0.54 percent.

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