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Gold

Gold prices declined by -0.34% to settle at Rs. 76,046 as markets continued to digest the Federal Reserve’s interest rate outlook in light of recent inflation data. US producer prices remained steady in September, while jobless claims surged, challenging the notion of a resilient labor market despite restrictive interest rates. However, inflation data was mixed, with headline inflation slowing less than expected and core inflation rising more than anticipated. The likelihood of a 25 basis point rate cut by the Federal Reserve in November stands at 87%, prompting investors to monitor upcoming economic data, including retail sales reports and speeches from Fed officials, for further guidance. Geopolitical risks in the Middle East have continued to support the safe-haven demand for gold, despite these bearish pressures. In the physical markets, Indian gold dealers charged premiums for the first time in two months as festival season approached, with a premium of up to $3 an ounce, compared to the previous week's $21 discount. In contrast, Chinese demand remained subdued post-holidays, with dealers offering discounts between $15 and $31 per ounce. Other key markets, such as Hong Kong and Singapore, saw slight fluctuations in premiums, reflecting mixed demand. On the technical front, gold is experiencing long liquidation, with a -0.87% drop in open interest to 14,439 contracts, and prices down by Rs. 261. Gold is finding support at Rs. 75,835, and a break below this level could lead to a test of Rs. 75,625. Resistance is now expected at Rs. 76,360, and a move above this could see prices testing Rs. 76,675.
 

Trading Ideas:
* Gold trading range for the day is 75625-76675.
* Gold eased as markets continued to assess Fed’s interest rate outlook following recent inflation reports.
* US producer prices were steady in September, coinciding with a surge in jobless claims.
* The odds of a 25 basis point reduction in the fed funds rate in November stand at 87%.


Silver
Silver prices settled down by -1.04% at 90,736 as the U.S. dollar strengthened, while market participants awaited further cues on the Federal Reserve's monetary policy. U.S. producer prices remained unchanged in September, supporting expectations of a favorable inflation outlook and the likelihood of the Fed cutting interest rates next month. Minneapolis Fed President Neel Kashkari indicated that more rate cuts are probable, with the 2% inflation target approaching. He highlighted that modest reductions in the policy rate may be necessary in the coming quarters, depending on actual economic, inflation, and labor market data. Traders are now focusing on upcoming U.S. retail sales data and comments from Fed officials for further clarity on the future interest rate trajectory. On the demand side, India’s silver imports are set to nearly double this year due to rising demand from solar panel and electronics manufacturers, alongside investor optimism that silver will outperform gold. India, the world’s largest silver consumer, imported 3,625 metric tons last year. In the first half of 2024, silver imports surged to 4,554 tons from just 560 tons in the same period a year ago, as buyers increased stockpiling to guard against rising prices. Technically, silver is under fresh selling pressure, with open interest increasing by 3.03% to settle at 27,714 contracts, while prices dropped by 954. Silver is currently supported at 90,225, and a break below could lead to testing the 89,715 level. On the upside, resistance is now likely at 91,445, with a move above this level potentially leading to testing 92,155.
 

Trading Ideas:
* Silver trading range for the day is 89715-92155.
* Silver prices drifted lower as the U.S. dollar strengthened.
* Fed’s Kashkari said more rate cuts likely lie ahead for the central bank as the 2% inflation target looms into sight.
* Market participants awaited fresh cues on the Federal Reserve's monetary policy path.


Crudeoil
Crude oil prices fell by -1.87% to settle at Rs. 6,245, driven by concerns over China's weakening economy. Market participants were disappointed by China's Finance Ministry briefing, which lacked significant new fiscal stimulus despite promises of support for the property sector. This, combined with a drop in China's inflation rate in September, raised concerns about weaker fuel demand from the world's largest crude importer. The negative sentiment from China outweighed geopolitical risks surrounding potential oil supply disruptions from a possible Israeli response to Iran’s missile attack. However, the US has cautioned Israel against targeting Iranian energy infrastructure. On the supply front, Libya’s National Oil Corporation (NOC) announced its production reached 1.3 million barrels per day (bpd), restoring pre-crisis levels. Additionally, Iraq’s oil production in September was reported at 3.94 million bpd, below its OPEC+ output quota, as the country seeks to improve compliance. US crude oil inventories rose by 5.81 million barrels in the week ending October 4, 2024, surpassing expectations, while gasoline and distillate stockpiles saw significant declines. The US Energy Information Administration (EIA) revised down its forecasts for global and US oil demand growth due to economic slowdowns in China and North America. World oil demand is expected to grow by 1.2 million bpd in 2025, down by 300,000 bpd from earlier projections. Technically, the market is under long liquidation, with open interest dropping by -6.5% to settle at 12,522 contracts. Crude oil prices are finding support at Rs. 6,184, and a break below could see further downside to Rs. 6,122. Resistance is expected at Rs. 6,304, with a potential rise to Rs. 6,362 if prices move higher.
 

Trading Ideas:
* Crudeoil trading range for the day is 6122-6362.
* Crude oil fell driven by concerns over China's weakening economy.
* Libya’s NOC announced that its oil production has reached 1.3 million barrels in the past 24 hours.
* Azerbaijan's oil production stood at 65,000 tonnes per day in September versus 64,870 tonnes per day in August.


Naturalgas
Natural gas prices fell sharply by -5.13% to settle at 210.9 as forecasts indicated milder weather and lower demand for the coming week than previously anticipated. The U.S. National Hurricane Center also noted a 50% chance of a tropical disturbance in the Atlantic Ocean strengthening, which could potentially affect demand patterns. In October so far, natural gas output in the Lower 48 U.S. states has averaged 101.4 billion cubic feet per day (bcfd), down from 101.8 bcfd in September and below the December 2023 record of 105.5 bcfd. Meteorologists forecast a shift in weather patterns from colder than normal (Oct 14-17) to warmer than normal (Oct 18-29), contributing to reduced demand. LSEG expects average gas demand in the Lower 48 to drop from 97.5 bcfd this week to 95.5 bcfd next week. Meanwhile, U.S. liquefied natural gas (LNG) exports reached 13.8 bcfd on October 12, the highest since March 2024. According to the U.S. Energy Information Administration (EIA), U.S. natural gas production is expected to decline slightly in 2024, with output easing to 103.5 bcfd from a record 103.8 bcfd in 2023. However, consumption is projected to rise to a record 90.1 bcfd in 2024 before dipping in 2025. Additionally, U.S. utilities added 82 billion cubic feet of gas to storage for the week ending October 4, surpassing market expectations. Technically, the market is under fresh selling pressure as open interest surged by 19.13% to 39,993 contracts, while prices dropped by 11.4. Natural gas is currently supported at 207.6, with a potential test of 204.4 if this level is breached. On the upside, resistance is likely at 216.8, with prices possibly testing 222.8 if resistance is broken.
 

Trading Ideas:
* Naturalgas trading range for the day is 204.4-222.8.
* Natural gas dropped on forecasts for milder weather and less demand next week than previously expected.
* Average gas output in the Lower 48 U.S. states slid to 101.4 bcfd so far in October, down from 101.8 bcfd in September
* Average gas demand in the Lower 48, including exports, will slide from 97.5 bcfd this week to 95.5 bcfd next week.


Copper
Copper prices fell by -1.75% to settle at Rs. 825.4, as concerns over China’s economic outlook weighed on the demand for the industrial metal. An extraordinary briefing by China’s Ministry of Finance reaffirmed its goal to issue more debt to support the weakening housing market, but the absence of specific monetary details left investors skeptical about the scale of the stimulus. This, coupled with weaker-than-expected Chinese export data for September, underscored the struggles of Chinese factories to offset poor domestic demand with foreign sales. Additionally, lower-than-expected new yuan loans and inflation data heightened concerns about the manufacturing outlook in China, the world’s top copper consumer. Further reflecting weak demand, Chinese copper smelters' processing fees remained near zero, indicating an oversupplied refined copper market. The International Copper Study Group (ICSG) reported a global refined copper surplus of 91,000 metric tons in July, down from 113,000 metric tons in June, with a year-to-date surplus of 527,000 metric tons. Meanwhile, China’s imports of unwrought copper rose 15.4% in September from the previous month, signaling improving seasonal demand. However, the imports were nearly identical to those of September 2023, reflecting ongoing demand challenges. On the technical front, copper is under fresh selling pressure with a 2.67% increase in open interest, settling at 7,309 contracts. Support is currently seen at Rs. 820, with a break below this level potentially testing Rs. 814.6. Resistance is expected at Rs. 834.9, and a move above could push prices towards Rs. 844.4.
 

Trading Ideas:
* Copper trading range for the day is 814.6-844.4.
* Copper slipped as pessimistic economic signals from China dampened the demand outlook
* China's unwrought copper imports rose in September to 479,000 tons, up 15.4% from August
* Chinese exports missed estimates in September, underscoring concerns that factories cannot continue to offset poor domestic demand.


Zinc
Zinc prices fell by -1.7% to settle at 283.4 as China’s recent stimulus announcements failed to boost market confidence. Investors were left uncertain about the size of the fiscal package, despite pledges to increase borrowing, offer subsidies, and support the banking sector. Markets had hoped for a larger stimulus package, ranging between 2-10 trillion yuan. Meanwhile, a stronger U.S. dollar added further pressure on metals, as market expectations reduced the likelihood of significant rate cuts by the Federal Reserve for the remainder of the year. The global zinc market is also facing a substantial supply deficit for 2024, primarily due to a squeeze in raw materials that has forced smelters to cut production. The International Lead and Zinc Study Group (ILZSG) revised its earlier forecast from a 56,000-ton surplus to a 164,000-ton deficit. Chinese demand for zinc is expected to rise by just 0.7% in 2024, reflecting challenges in the country’s property sector. However, global mined zinc production is projected to jump by 6.6% next year due to mine restarts, particularly in Russia. Additionally, European zinc output is expected to decrease by 11.4% this year. From a technical perspective, zinc is experiencing long liquidation, with open interest dropping by -17.9% to 2,679 contracts as prices fell by 4.9. Zinc is currently supported at 280.7, and if this level is breached, it could test 277.9. On the upside, resistance is likely at 286.6, and a move above this level could lead to prices testing 289.7.
 

Trading Ideas:
* Zinc trading range for the day is 277.9-289.7.
* Zinc dropped as China’s stimulus announcements over the weekend failed to inspire market confidence.
* BMI hiked its zinc price forecast for 2024 to $2,700, citing that tighter market fundamentals propel prices higher.
* Goldman Sachs raised China's gross domestic product forecast to 4.9% from 4.7% for 2024


Aluminium
Aluminium prices dropped by -1.61% to settle at Rs. 237.6, as the lack of concrete stimulus details from Beijing weighed on market sentiment. China's pledge to "significantly increase" debt left investors uncertain about the overall size of the stimulus, further pressured by deflationary signals in September, which heightened the need for swift economic measures. Additionally, weaker-than-expected Chinese economic data added to concerns about demand for industrial metals. In other developments, stocks of aluminium at Japan's three major ports fell by 4.3% to 313,100 metric tons by the end of September. The premium for aluminium shipments to Japanese buyers for the fourth quarter increased by 1.7% to $175 per metric ton, driven by supply concerns and higher premiums in Europe. On the global front, the aluminium market surplus is expected to narrow by 2025 as lower borrowing costs and potential Chinese stimulus could boost demand. Rusal, a major producer, anticipates a global surplus of around 500,000 metric tons in 2024, narrowing to 200,000-300,000 tons in 2025. Chinese aluminium output continues to rise, with August production hitting its highest since 2002, supported by higher prices and steady smelter operations. China produced 3.73 million metric tons in August, up 2.5% year-on-year, and total production for the first eight months of the year reached 28.91 million tons, a 5.1% increase from the previous year. Technically, aluminium is under long liquidation, with open interest decreasing by -1.49% to settle at 2,447 contracts. Support is seen at Rs. 235.9, with a potential downside to Rs. 234.1. Resistance is expected at Rs. 240.6, and a move above could push prices towards Rs. 243.5.
 

Trading Ideas:
* Aluminium trading range for the day is 234.1-243.5.
* Aluminium dropped following insufficient stimulus details from Beijing, with downbeat Chinese economic data adding to the decline.
* China pledged to "significantly increase" debt, but left investors guessing on the overall size of the stimulus.
* China's deflationary pressures worsened in September, heightening pressure on authorities to roll out more stimulus quickly.


Cottoncandy
Cotton Candy prices declined by -0.26% to settle at Rs. 56,850, amid moderate demand and weak export activity, particularly to Bangladesh. The USDA has lowered India’s cotton production forecast for the 2024-25 season to 30.72 million bales due to crop damage from excessive rains and pest issues, with ending stocks reduced to 12.38 million bales. Cotton acreage in the current kharif season is down by around 9% to 110.49 lakh hectares compared to last year’s 121.24 lakh hectares. Despite this dip, output is expected to remain similar to the previous year, thanks to timely rains and lower pest incidence. However, damage from recent rains in Maharashtra and Gujarat has delayed the crop by a month. India’s cotton exports for the 2023-24 crop year are estimated at 28 lakh bales, up significantly from 15.5 lakh bales the previous year, driven by higher demand from countries like Bangladesh and Vietnam. Imports have also increased to 16.4 lakh bales, compared to 12.5 lakh bales last year. The Cotton Association of India (CAI) estimates closing stocks for the year at 23.32 lakh bales, down from 28.90 lakh bales in 2023. Globally, the U.S. cotton balance sheet for 2024/25 reflects lower production and exports, with ending stocks raised slightly. World cotton production is expected to rise by 200,000 bales, with increases in China, Brazil, and Argentina offsetting reductions in the U.S. and Spain. Technically, the market is under long liquidation, with open interest remaining unchanged at 131 contracts. Cotton Candy is finding support at Rs. 56,590, and a break below this level could see prices testing Rs. 56,320. Resistance is seen at Rs. 57,160, and a move above could push prices toward Rs. 57,460.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56320-57460.
* Cotton dropped amid moderate demand, with weak export activity, particularly to bangladesh.
* USDA has lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales.
* Acreage is down by around 9% at 110.49 lakh hectares over 121.24 lh in the same period last year.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric prices rose by 1.39% to settle at 13,762 amid reports of significant crop damage due to heavy rains in Nanded and Hingoli areas, with losses expected to be higher than initially estimated. However, the upside was capped by lower demand and a rise in arrivals. Total arrivals dropped to 14,915 bags, down from 16,975 bags in the previous session, significantly impacted by a sharp decrease in arrivals at Sangli, where only 890 bags were reported compared to 11,000 in the previous session. With five months left for harvesting, the combination of low supply and unfavorable weather conditions is expected to push prices higher in the coming weeks. However, news of increased sowing is limiting the upside. In Indonesia, dry weather has accelerated harvesting, and rising acreage combined with low export demand may contribute to further price declines. In India, turmeric sowing is reported to be significantly higher in areas like Erode, Maharashtra, Telangana, and Andhra Pradesh, leading to an estimated increase in total sown area to 3.75-4 lakh hectares, compared to 3-3.25 lakh hectares last year. Despite this, the availability of turmeric in 2025 is expected to be less than consumption due to lower production in the previous year and reduced carryover stock. Turmeric exports dropped by 13.97% from April-July 2024, while imports during the same period surged by 429.58%, highlighting strong domestic demand. Technically, the market witnessed fresh buying, with open interest increasing by 12.67% to 11,250 contracts as prices rose by 188. Support is currently at 13,496, with a potential test of 13,230 if breached. Resistance is seen at 14,002, and a move above this could lead to prices testing 14,242.
 

Trading Ideas:
* Turmeric trading range for the day is 13230-14242.
* Turmeric gains amid reports of crop damage due to heavy rains in Nanded and Hingoli areas
* Turmeric exports during Apr- July 2024, dropped by 13.97 percent at 61,609.83 tonnes compared Apr- July 2023
* Stock of Turmeric in NCDEX recognized warehouse was 185 MT
* In Nizamabad, a major spot market, the price ended at 14030.9 Rupees dropped by -0.87 percent.


Jeera
Jeera prices rose by 0.37% to settle at Rs. 25,940, supported by strong domestic and export demand amid tight global supplies. However, the upside was limited by expectations of higher production, which weighed on prices. Farmers are also holding back their stocks in anticipation of better prices, further contributing to the price rise. Jeera production is expected to be 30% higher this season, reaching 8.5-9 lakh tonnes due to a substantial increase in the cultivation area. In Gujarat, the sowing area increased by 104%, while in Rajasthan, it grew by 16%, boosting production expectations. Globally, China has significantly increased its cumin production to over 55-60 thousand tons, nearly doubling from the previous 28-30 thousand tons. This rise, along with higher production in Syria, Turkey, and Afghanistan, is expected to pressure cumin prices as new supplies enter the market. Turkey and Afghanistan's cumin outputs are also set to rise, contributing to a shift in global market dynamics. Despite these factors, export demand for jeera remains strong, with a 58.31% increase in exports during April-July 2024 compared to the same period in 2023. Technically, the market is experiencing fresh buying, with a 1.4% increase in open interest to settle at 1,950 contracts. Jeera prices gained by Rs. 95. Support is seen at Rs. 25,660, and a break below this could lead to a test of Rs. 25,360. Resistance is now expected at Rs. 26,210, and a move above this level could push prices towards Rs. 26,460.
 

Trading Ideas:
* Jeera trading range for the day is 25360-26460.
* Jeera gains amid robust domestic and export demand besides tight global supplies.
* Jeera exports during Apr-July 2024, rose by 58.31 percent at 91,070.02 tonnes compared to Apr- July 2023.
* Stock of Jeera Unjha in NCDEX recognized warehouse was 750 MT
* In Unjha, a major spot market, the price ended at 26204.45 Rupees dropped by -0.22 percent.

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