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Gold

Gold prices rose by 0.4% to settle at Rs.76,664, supported by weaker equities and bond yields as traders await key U.S. economic data to assess the Federal Reserve’s timeline for potential rate cuts. San Francisco Fed President Mary Daly affirmed that further rate cuts are possible this year if data aligns with expectations. Additionally, delegates at the London Bullion Market Association's annual gathering predicted gold could rise to $2,941 over the next 12 months, while silver could reach $45 per ounce. Despite these bullish projections, China's central bank held off gold purchases for the fifth consecutive month in September. Global central banks increased their gold reserves by 6% to 183 tons in Q2, although the World Gold Council expects slower purchases in 2024 compared to 2023. In India, physical gold dealers charged premiums for the first time in two months, driven by festival demand, with premiums rising to $3 per ounce from the previous week's $21 discount. However, consumer sentiment in China remained weak post-holidays, with dealers offering gold at discounts between $15 and $31 per ounce. Globally, gold demand, excluding OTC trading, fell 6% year-on-year in Q2 to 929 metric tons, with jewellery consumption dropping 19% due to high prices. The World Gold Council noted that price sensitivity has impacted jewellery demand, and it may take time for consumers to adjust. Technically, gold is experiencing fresh buying momentum, with open interest increasing by 1.76% to settle at 14,968 contracts as prices gained Rs.304. Gold has support at Rs.76,390, and a decline below this could lead to a test of Rs.76,110. Resistance is expected at Rs.76,920, and a break above may push prices to Rs.77,170.

Trading Ideas:

# Gold trading range for the day is 76110-77170.
# Gold prices extended gains driven by weaker equities and bond yields, while traders eagerly await U.S. economic data.
# Fed’s Daly said the central bank remains on track for more cuts this year as long as data meets expectations.
# Delegates at the London Bullion Market Association's annual gathering predicted gold prices would rise to $2,941 over the next 12 months

Silver

Silver prices rose by 0.61%, settling at Rs.92,183, driven by safe-haven demand amid ongoing tensions in the Middle East and declining bond yields. These factors outweighed the pressure from a stronger dollar. U.S. import prices fell by 0.4% in September, the biggest drop in nine months, signaling positive news for the inflation outlook. This followed a revised 0.2% decrease in August, driven by lower energy and food costs. Atlanta Federal Reserve President Raphael Bostic indicated the possibility of one more 25-basis-point rate cut this year, though he emphasized flexibility depending on incoming data on inflation and employment. Similarly, Fed Governor Christopher Waller and Minneapolis Fed President Neel Kashkari echoed cautious stances, signaling the potential for more rate cuts as the central bank approaches its 2% inflation target. India’s silver imports are set to nearly double this year due to strong demand from the solar panel and electronics sectors, along with rising investor interest. In the first half of 2024, India's silver imports surged to 4,554 tons, compared to just 560 tons a year earlier, as industrial buyers stockpiled the metal amidst expectations of higher prices. This increased demand from the world’s largest silver consumer could further bolster global prices, which are near their highest levels in over a decade. Technically, the silver market is seeing short covering, with open interest declining by 4.44%. Silver finds support at Rs.91,475, and a break below could test Rs.90,770. Resistance is expected at Rs.93,015, with prices possibly reaching Rs.93,850 if upward momentum continues.

Trading Ideas:

# Silver trading range for the day is 90770-93850.
# Silver rose as lingering Middle East tensions and sliding bond yields helped boost safe-haven demand
# Fed's Bostic says his 'dot' was for 25 bp more in cuts in 2024
# Fed’s Waller urged "more caution" in upcoming interest rate cuts. He added that the economy is in good shape.

Crude Oil

Crude oil prices remained unchanged at Rs.5,923, reflecting ongoing uncertainty over the Middle East conflict. Initially, prices showed signs of decline following reports that Israel would not target Iranian nuclear or oil sites, easing concerns about supply disruptions. However, tensions remain high as the conflict between Israel and Hezbollah continues, with the US voicing concerns over Israeli airstrikes in Beirut. On the demand side, both OPEC and the International Energy Agency (IEA) have downgraded their global oil demand forecasts for 2024, mainly due to weaker demand from China. In the US, crude oil inventories rose by 5.81 million barrels for the week ending October 4, 2024, surpassing market expectations of a 2 million-barrel increase, according to the EIA. Crude stocks at the Cushing delivery hub also rose by 1.247 million barrels. Meanwhile, gasoline inventories fell by 6.304 million barrels, more than the expected 1.1 million-barrel decline, and distillate stockpiles, including diesel and heating oil, dropped by 3.124 million barrels, exceeding forecasts. The EIA’s Short-Term Energy Outlook highlighted that global oil demand is projected to grow by 1.2 million barrels per day in 2024, down by 300,000 barrels per day from previous estimates due to weakening economic activity in China and North America. U.S. oil production forecasts were also revised lower, with the U.S. expected to pump 13.22 million barrels per day this year, down from earlier projections of 13.25 million. Technically, crude oil is under long liquidation, with open interest dropping by 16.69% to 8,524 contracts. Prices remain steady, with immediate support at Rs.5,856 and potential downside to ?5,790. Resistance is seen at Rs.5,990, and a break above could test Rs.6,058.
 

Trading Ideas:

# Crudeoil trading range for the day is 5790-6058.
# Crude oil steadied amid continued uncertainty over the Middle East conflict.
# Israel would not target Iranian nuclear or oil sites, easing fears of a supply disruption.
# OPEC and the International Energy Agency have both cut their global oil demand forecasts for 2024

Natural gas

Natural gas prices dropped by 5.29%, settling at Rs.200.4, amid expectations of mild weather over the next two weeks, which is expected to keep demand low. The recent decline in prices is partly due to a reduction in gas consumption by power generators after Hurricanes Milton and Helene disrupted electricity services across millions of homes and businesses. Additionally, gas production in the Lower 48 U.S. states fell to 101.3 billion cubic feet per day (bcfd) in October from 101.8 bcfd in September, with a recent daily drop of 2.4 bcfd leading to a five-month low of 99.6 bcfd. Looking ahead, meteorologists predict a shift from colder-than-normal weather on October 16-17 to warmer-than-normal conditions from October 18-31, further reducing demand. The U.S. Energy Information Administration (EIA) projects natural gas production will decline slightly in 2024 to 103.5 bcfd, compared to a record 103.8 bcfd in 2023. However, gas consumption is expected to reach a record 90.1 bcfd in 2024, up from 89.1 bcfd in 2023. U.S. liquefied natural gas (LNG) exports are also expected to increase, with projections reaching 12.1 bcfd in 2024. Moreover, U.S. utilities added 82 billion cubic feet of gas into storage during the week ending October 4, exceeding market expectations and marking the largest storage build since March. This pushed total gas storage in the lower 48 states to 3.629 trillion cubic feet, 3.5% above last year’s levels. Technically, natural gas is under fresh selling pressure, with a 23.43% increase in open interest. Prices have immediate support at Rs.196.9, and a break below this level could lead to a test of Rs.193.3. Resistance is seen at Rs.207.2, with a potential move toward Rs.213.9 if prices rebound.

Trading Ideas:

# Naturalgas trading range for the day is 193.3-213.9.
# Natural gas slid on expectations mild weather over the next two weeks will keep demand low.
# One factor weighing on prices in recent weeks has been a reduction in the amount of gas power generators have burned.
# Average gas output in the Lower 48 U.S. states slid to 101.3 bcfd so far in October from 101.8 bcfd in September.
 

Copper

Copper prices rose by 0.48%, settling at ?821.05, supported by a softer dollar and some short-covering activity. China’s pledge to increase debt and stimulate growth helped boost sentiment, although the lack of specific details on the size or timing of the stimulus limited enthusiasm. Additionally, weaker-than-expected September trade data from China raised concerns about demand, while expectations that the U.S. Federal Reserve will proceed cautiously with interest rate cuts further weighed on market sentiment. The People's Bank of China injected CNY 642.4 billion via seven-day reverse repos, though this resulted in a net cash withdrawal of CNY 207.6 billion due to maturing loans, aimed at maintaining reasonable liquidity. In the supply side, Chilean miner Antofagasta reported a 15% rise in copper output for Q3 2024, largely due to destocking at the Los Pelambres mine and better grades at Centinela. However, the miner expects to end the year at the lower end of its production forecast range of 670,000-710,000 metric tons. Globally, the refined copper market showed a surplus of 91,000 metric tons in July, down from 113,000 metric tons in June, according to the International Copper Study Group (ICSG). For the first seven months of the year, the market saw a 527,000 metric tons surplus. Technically, copper is under short covering, with open interest dropping by 7.51%. The metal finds immediate support at Rs.817.6, and a break below this could test Rs.814.2. On the upside, resistance is seen at Rs.824.5, and a move above could push prices toward Rs.828, indicating the potential for continued upward momentum in the near term.

Trading Ideas:
# Copper trading range for the day is 814.2-828.
# Copper rose supported by a softer dollar and on some short-covering.
# China’s September trade figures came in weaker than anticipated, further fueling concerns about demand conditions.
# PBOC injected CNY 642.4 billion through seven-day reverse repos.

Zinc

Zinc prices edged up by 0.12% to settle at ?281.95 as the global zinc market faces a significant supply deficit in 2024. The International Lead and Zinc Study Group (ILZSG) has revised its outlook, shifting from a previously expected surplus of 56,000 metric tons to a deficit of 164,000 tons. This supply shortage is driven by reduced output, particularly in Europe, where production is forecast to drop by 11.4%, mainly due to declines in Ireland and Portugal. Additionally, production cuts are expected in China, Canada, South Africa, the U.S., and Peru, further tightening the market. Meanwhile, zinc demand in China is forecast to rise by only 0.7% in 2024, reflecting the metal's exposure to the struggling property sector. Despite this, global refined zinc demand is expected to increase by 1.8% next year, reaching 13.83 million tons. ILZSG anticipates global zinc production will decline by 1.8% in 2024 to 13.67 million tons due to limited availability of concentrates. Market participants also noted a decline in Chinese refined zinc production, which fell by 0.68% month-on-month and 7.64% year-on-year in August. Heavy rains, power rationing, and raw material procurement difficulties contributed to the production drop, while some smelters resumed operations after maintenance, partially offsetting these declines. Technically, the zinc market is witnessing short covering, with open interest decreasing by 1.98% to 2,233 contracts as prices rose slightly by Rs.0.35. Zinc is currently supported at Rs.279.6, with a potential test of Rs.277.1 if prices decline. On the upside, resistance is expected at Rs.285.4, and a break above this level could push prices to Rs.288.7.

Trading Ideas:
# Zinc trading range for the day is 277.1-288.7.
# Zinc prices gains as Zinc facing supply deficit as mine output falls again.
# The global refined zinc market could see a 164,000 metric ton deficit in 2024 due to reduced output in Europe.
# Mine production is now expected to fall for a third consecutive year.

Aluminium

Aluminium prices rose by 0.91%, settling at Rs.237.65, driven by concerns over supply disruptions from Guinea, a major exporter of bauxite, the primary raw material for alumina production. Emirates Global Aluminium suspended bauxite exports from its Guinea subsidiary, raising fears of further tightening in the global alumina market, which has already seen steady price increases throughout 2024 due to ongoing supply disruptions. Expectations of production cuts in Yunnan, China, have decreased, while new and resumed capacities have boosted domestic aluminium supply. Meanwhile, Japanese aluminium stocks fell by 4.3% in September, reflecting tighter supplies. The premium for aluminium shipments to Japanese buyers for Q4 2024 rose to $175 per metric ton, up 1.7% from the previous quarter, on supply concerns amid higher premiums in Europe. The global aluminium market surplus is expected to narrow, with Rusal projecting a surplus of 500,000 metric tons in 2024, potentially dropping to 200,000-300,000 tons in 2025, driven by lower borrowing costs and Chinese stimulus boosting demand. China, the world’s largest aluminium producer, saw its August aluminium output rise by 2.5% year-on-year to 3.73 million metric tons, the highest since 2002, supported by higher prices and strong smelter activity. For the first eight months of 2024, China produced 28.91 million tons, up 5.1% from a year earlier. Technically, aluminium is under short covering, with a 9.97% drop in open interest. Support is seen at Rs.236.2, with a break below potentially leading to Rs.234.7. On the upside, resistance is at Rs.239.2, and a move above this level could push prices toward Rs.240.7, indicating further potential for upward momentum.

Trading Ideas:
# Aluminium trading range for the day is 234.7-240.7.
# Aluminium rises on Guinea raw material supply concerns
# Expectations for production cuts in Yunnan in the fourth quarter have decreased.
# Stocks at three major Japanese ports fell to 313,100 metric tons by the end of September, down about 4.3% from the previous month

Cotton Candy

Cottoncandy prices rose by 0.71%, settling at Rs.57,120, driven by concerns over a lower production forecast for India's 2024-25 cotton season, which the USDA has reduced to 30.72 million bales due to crop damage from excessive rains and pest issues. Additionally, India’s cotton ending stocks are forecast to drop to 12.38 million bales. However, the upside was limited due to moderate demand and weak export activity, particularly to Bangladesh. Cotton acreage in India for the current kharif season is down by 9% to 110.49 lakh hectares compared to last year’s 121.24 lakh hectares, as farmers have shifted to other crops. The Cotton Association of India (CAI) estimated the closing stocks for the 2023-24 season at 30.19 lakh bales, marginally higher than the 28.90 lakh bales a year ago. Imports rose significantly during the year to 17.5 lakh bales, boosting overall supply to 371.69 lakh bales. Exports also increased by 84% year-on-year to 28.50 lakh bales, mainly driven by demand from Bangladesh and Vietnam. On the global front, the U.S. cotton balance sheet for 2024/25 reflects lower production, mill use, and exports due to the impact of Hurricane Helene. World production is expected to rise slightly, with increases in China, Brazil, and Argentina offsetting declines in the U.S. and Spain. Technically, Cottoncandy is under short covering, with open interest remaining unchanged. The market is finding support at Rs.56,880, with a potential drop to Rs.56,630 if breached. Resistance is seen at Rs.57,260, and a move above this could lead to prices testing Rs.57,390, suggesting the possibility of further price increases.

Trading Ideas:
# Cottoncandy trading range for the day is 56630-57390.
# Cotton gains as USDA has lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales.
# However upside seen limited amid moderate demand, with weak export activity, particularly to Bangladesh.
# Acreage is down by around 9% at 110.49 lakh hectares over 121.24 lh in the same period last year.

Turmeric

Turmeric prices fell by 1.49% to Rs.13,636, driven by weaker demand amid rising arrivals. However, the downside is expected to be limited due to reports of crop damage caused by heavy rains in the Nanded and Hingoli areas, which could result in greater losses than initially estimated. Total arrivals were lower at 14,915 bags, down from 16,975 bags in the previous session, with a sharp drop in arrivals at Sangli contributing to the decrease. Sangli reported only 890 bags, compared to 11,000 bags previously. Despite the current price drop, a combination of low supply and adverse weather conditions is likely to push prices higher in the coming weeks, as harvesting is still five months away. On the other hand, the upside is capped by increased sowing, with turmeric sowing in major areas like Erode, Maharashtra, Telangana, and Andhra Pradesh estimated to be 30-35% higher than last year. Production for 2024 is expected to reach around 70-75 lakh bags, with outstanding stock nearing zero, potentially limiting availability in 2025. Turmeric exports fell by 13.97% during April-July 2024 compared to the same period in 2023, although July exports showed a slight 0.92% increase compared to June. Meanwhile, imports surged by 429.58% during April-July 2024 compared to the previous year, despite a drop in July imports. Technically, the market is under fresh selling pressure, with open interest increasing by 11.55% to 13,275 contracts as prices dropped Rs.206. Turmeric has immediate support at Rs.13,482, with a potential test of Rs.13,326 if the downward momentum continues. Resistance is expected at Rs.13,912, with prices potentially testing Rs.14,186 on the upside.

Trading Ideas:
# Turmeric trading range for the day is 13326-14186.
# Turmeric dropped due to lower demand amid a rise in arrivals.
# Turmeric exports during Apr- July 2024, dropped by 13.97 percent at 61,609.83 tonnes compared Apr- July 2023
# India’s festival season demand is expected to surge, particularly with CAIT forecasting 48 lakh marriages in the upcoming season.
# In Nizamabad, a major spot market, the price ended at 13938.3 Rupees dropped by -0.18 percent.

Jeera

Jeera prices fell by 1.86%, settling at Rs.25,025, as an estimated 30% of cumin stock remains with farmers in India. Daily arrivals in the key market of Unjha are strong, with 12,000 to 17,000 bags arriving, 60% of which are from Rajasthan, while the rest are from local farmers and stockists. Export prices for cumin are currently quoted between $3,150 and $3,200 per tonne, with strong demand from Pakistan, which is purchasing Indian cumin through Dubai due to lower Indian prices compared to Chinese cumin. Despite ongoing trade with Pakistan via Dubai, stocks in Dubai and other countries remain limited. In the past month, export activity has been robust, with 100 to 125 containers of cumin being shipped, including significant trade with China, Bangladesh, and other countries. Cumin exports from India rose sharply by 58.31% during April-July 2024, reaching 91,070 tonnes compared to the same period last year. Export figures for July 2024 alone surged 110.15% year-on-year to 17,403 tonnes. High cumin prices are expected to slightly impact the planting of other crops like gram and wheat, as farmers adjust their crop choices. Favorable weather conditions may also influence cumin cultivation. Furthermore, tensions in the Middle East have boosted cumin demand, particularly from traditional cumin-producing regions like Syria, Iran, and Turkey. Technically, jeera is witnessing long liquidation, with a 0.48% drop in open interest. Jeera is currently finding support at Rs.24,820, and a break below this level could lead to testing Rs.24,620. On the upside, resistance is seen at Rs.25,340, and a move above this could push prices toward Rs.25,660

Trading Ideas:

# Jeera trading range for the day is 24620-25660.
# Jeera prices dropped as it is estimated that 30 percent of cumin is still available with the farmers.
# Tensions in the Middle East has resulted in good export business from Gujarat
# The arrival of Ramzan earlier this year will increase domestic consumption.
# In Unjha, a major spot market, the price ended at 25809.85 Rupees dropped by -0.43 percent.
 

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