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Gold

Gold prices surged by 1.34% to settle at 76,307, driven by expectations of a potential Federal Reserve rate cut in November. This rally followed the release of U.S. producer price data, which showed no change in September, reinforcing a favorable inflation outlook. The U.S. consumer prices report indicated a slightly higher-than-expected rise in September, but the annual inflation increase was the smallest in more than 3.5 years. As inflation cools and the U.S. job market remains steady, albeit with some risks, Fed policymakers are signaling that more interest rate cuts could be on the horizon. In the physical gold market, Indian dealers charged premiums of up to $3 per ounce for the first time in two months, as jewelry demand picked up ahead of the festival season. This marked a shift from the prior week's $21 discount, though higher prices have dampened industry hopes for a strong festival season. In China, weak consumer sentiment post-holidays led to dealers offering discounts between $15 and $31 per ounce, while in Hong Kong and Singapore, gold traded at smaller premiums. Global gold demand, excluding over-the-counter trading, fell 6% year-on-year in the second quarter due to a sharp 19% drop in jewelry consumption, according to the World Gold Council, highlighting the impact of high prices on consumer demand. Technically, the market witnessed fresh buying with a 3.39% increase in open interest, settling at 14,566 contracts. Gold prices are currently supported at 75,860, with a potential downside target of 75,415. On the upside, resistance is seen at 76,550, and a move above this level could push prices toward 76,795. The market remains volatile as it reacts to global economic signals.
 

Trading Ideas:
* Gold trading range for the day is 75415-76795.
* Gold gains after the release of the latest data on U.S. producer prices.
* U.S. dollar pulled back from two-month highs on heightened expectations for a Fed rate cut in November.
* U.S. consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years


Silver
Silver prices surged by 1.53%, settling at 91,690, following a decline in U.S. consumer sentiment as indicated by the preliminary Michigan Consumer Sentiment Index, which fell to 68.9 in October 2024, down from 70.1 in September and below market expectations of 70.8. This sentiment drop coincided with unchanged U.S. factory gate prices in September, falling short of forecasts of a 0.1% increase. Additionally, a rise in initial U.S. jobless claims raised concerns about the labor market’s health, pushing the dollar lower. The Federal Reserve remains data-dependent, with Atlanta Fed President Raphael Bostic expressing comfort in potentially skipping an interest-rate cut at the next meeting if economic data supports such a move. Other Fed officials, including Austan Goolsbee and John Williams, also emphasized that the timing and pace of rate cuts will be influenced by incoming data. The CME FedWatch tool currently shows an 84.4% chance of a 25-basis-point rate reduction in November. India’s silver imports are set to almost double this year, driven by demand from solar panel and electronics manufacturers, and investors betting on better returns from silver compared to gold. In the first half of 2024, India imported 4,554 metric tons of silver, a sharp increase from 560 tons in the same period in 2023, as industrial buyers stockpile amid rising prices. Technically, silver remains under short covering as open interest fell by 4.22% to 26,873 contracts, while prices rose by 1,386. Support is now seen at 90,845, and a break below this level could lead to testing 90,005. On the upside, resistance is expected at 92,205, with prices possibly testing 92,725 if this level is breached.
 

Trading Ideas:
* Silver trading range for the day is 90005-92725.
* Silver prices rallied after the Michigan Consumer Sentiment data shows a dip in sentiment
* The dollar slipped after data showed a surge in initial jobless claims last week.
* Fed’s Bostic said that he would be "totally comfortable" skipping an interest-rate cut at the next Fed meeting if economic data warrants it.


Crudeoil
Crude oil prices declined by 0.47% to settle at 6,364, driven by profit booking after a recent rally fueled by concerns over escalating tensions in the Middle East and potential supply disruptions from Hurricane Milton. Additionally, hopes for further economic stimulus from China added some support to prices earlier in the week. On the supply side, Libya’s National Oil Corporation reported restoring production to 1.22 million barrels per day, easing concerns about potential shortages. U.S. gasoline demand saw a significant increase, rising by over 1.1 million barrels per day in the week ending October 4, marking the largest weekly surge since February 2001, according to the U.S. Energy Information Administration (EIA). However, crude oil inventories in the U.S. rose by 5.81 million barrels, surpassing market expectations of a 2 million barrel increase, while crude stocks at the Cushing hub increased by 1.247 million barrels. Gasoline stocks fell by 6.304 million barrels, more than expected, while distillate stockpiles decreased by 3.124 million barrels. The EIA revised its global oil demand growth forecast for 2025 down by 300,000 barrels per day, citing weaker economic activity in China and North America. U.S. oil demand growth is now expected to rise to 20.5 million barrels per day next year, slightly below earlier forecasts. Additionally, U.S. oil production for 2025 is now expected to average 13.54 million barrels per day, a modest decline from prior estimates. Technically, crude oil is experiencing long liquidation with open interest down by 1.44%, settling at 13,392 contracts. Support is seen at 6,292, with further downside testing at 6,219. Resistance is at 6,419, and a move above could push prices toward 6,473.
 

Trading Ideas:
* Crudeoil trading range for the day is 6219-6473.
* Crude oil dropped on profit booking after prices rallied amid worries about escalating tensions in the Middle East.
* U.S. gasoline demand rose by more than 1.1 million barrels per day.
* Libya's NOC said it had restored production close to levels before the country's central bank crisis, reaching 1.22 mbpd.


Naturalgas
Natural gas prices settled down by 0.8% at 222.3, driven by strong supply and lower demand due to hurricanes in the U.S. Southeast. This price decrease occurred despite reduced output and an expected increase in gas flows to liquefied natural gas (LNG) export plants, with the Cove Point facility in Maryland expected to resume operations soon. U.S. gas production in the Lower 48 states averaged 101.2 billion cubic feet per day (bcfd) in October, down from 101.8 bcfd in September, and significantly below the record 105.5 bcfd set in December 2023. Despite milder-than-normal weather, meteorologists project that cooler seasonal temperatures will gradually increase demand. The forecast suggests gas demand in the Lower 48, including exports, will rise from 96.2 bcfd this week to 98.2 bcfd in the next two weeks. Gas flows to the seven major U.S. LNG export plants have dropped to an average of 12.4 bcfd in October, down from 12.7 bcfd in September, and below the record 14.7 bcfd set in December 2023. The U.S. Energy Information Administration (EIA) projects that natural gas production will decline to 103.5 bcfd in 2024, while demand is expected to hit a record high of 90.1 bcfd. Storage levels also rose, with U.S. utilities adding 82 billion cubic feet to storage, significantly surpassing market expectations of 71 billion cubic feet. Technically, natural gas is under fresh selling pressure, with open interest increasing by 4.77% to 33,572 contracts. The price is supported at 218.6, and a break below this level could lead to testing 215. On the upside, resistance is seen at 227.8, and a move above this level could push prices toward 233.4.
 

Trading Ideas:
* Naturalgas trading range for the day is 215-233.4.
* Natural gas dropped as evidence of strong supply magnified the lower demand brought by hurricanes.
* Average gas output in the Lower 48 U.S. states fell to 101.2 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September.
* Meteorologists projected the weather in the Lower 48 states will remain mostly milder than normal through at least Oct. 26.


Copper
Copper prices gained 0.93%, closing at 840.1, driven by hopes that China will announce further stimulus measures to boost its economy. Speculation is mounting that Chinese finance officials will introduce a significant fiscal stimulus package, expected to range between 2-3 trillion yuan. Earlier, the Chinese central bank introduced a swap facility worth 500 billion yuan to help financial institutions invest in stock purchases. This followed Beijing’s earlier comprehensive monetary stimulus aimed at achieving the 5% GDP growth target. However, skepticism about the effectiveness of such measures has grown, particularly regarding the potential for increased demand for industrial metals like copper. Copper inventories in Shanghai Futures Exchange-monitored warehouses rose 10.5% since the last report on September 30. Additionally, Chinese copper giant Tongling Nonferrous Metals Group announced it would postpone production at its new plant until the second half of 2025 due to raw material shortages, raising doubts about China's long-term copper expansion plans. On the global front, the refined copper market showed a surplus of 91,000 metric tons in July, compared to 113,000 metric tons in June, as reported by the International Copper Study Group (ICSG). For the first seven months of 2024, the market recorded a surplus of 527,000 metric tons. Meanwhile, China’s unwrought copper imports fell to a 16-month low in August, indicating weaker demand for the metal. Technically, copper is under short covering, with open interest falling by 4.13% to settle at 7,119 contracts. Support is seen at 832.6, with further downside testing at 825.1. Resistance is expected at 844.5, and a move above could lead to testing 848.9, indicating continued market optimism.
 

Trading Ideas:
* Copper trading range for the day is 825.1-848.9.
* Copper prices rose amid hopes that China will announce more stimulus measures.
* Copper giant Tongling will delay production of its new plant by six months
* Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 10.5%.


Zinc
Zinc prices surged by 1.96%, settling at 288.3, amid concerns over a significant supply deficit expected in 2024. The International Lead and Zinc Study Group (ILZSG) revised its zinc market forecast, shifting from an anticipated 56,000-ton surplus to a 164,000-ton deficit. This supply shortage is primarily driven by reduced production due to a raw materials squeeze, which has forced smelters to cut output, particularly in Europe, China, and other major producing regions. European zinc output is forecast to decline by 11.4% in 2024, with cuts in countries like Ireland, Portugal, China, Canada, and Peru. However, production increases in Australia, Mexico, and Congo may offset some of the declines. On the demand side, Chinese demand is projected to rise by just 0.7% due to challenges in the country's property sector, which impacts zinc consumption. Globally, demand for refined zinc is expected to increase by 1.8% to 13.83 million tons in 2024. The ILZSG also anticipates a supply surplus of 148,000 tons by 2025 as production ramps up. Additionally, China’s refined zinc production saw a 0.68% month-on-month drop in August due to weather-related disruptions and power rationing, particularly in Sichuan. This decrease was somewhat mitigated by resumed operations in other provinces after maintenance. Technically, zinc is experiencing fresh buying as open interest increased by 18.83% to 3,263 contracts, alongside a price rise of 5.55. Support is now seen at 284.5, with potential to test 280.8 if breached. Resistance is expected at 290.2, and a move above this level could see prices testing 292.2 in the near term.
 

Trading Ideas:
* Zinc trading range for the day is 280.8-292.2.
* Zinc rallied as global zinc market is facing a sizeable supply deficit in 2024.
* A previously anticipated supply surplus of 56,000 metric tons has been updated to a 164,000-ton supply deficit - ILZSG
* Chinese demand will rise by just 0.7% in 2024, reflecting zinc's exposure to the country's struggling property sector.


Aluminium
Aluminium prices surged by 1.68% to settle at 241.5, driven by increased fund buying and concerns over raw material shortages in China. The market reacted to news of a bauxite supply disruption from Guinea, as Emirates Global Aluminium (EGA) reported a suspension of exports from its subsidiary, Guinea Alumina Corporation, due to customs issues. This has heightened fears of a supply crunch in an already tight market. Additionally, strong demand from Chinese aluminium producers, who have ramped up production due to healthy profits, has further bolstered prices. In Japan, aluminium stocks at major ports fell 4.3% in September, reflecting tighter supply conditions. Meanwhile, the premium for aluminium shipments to Japanese buyers for Q4 was set at $175 per metric ton, up 1.7% from the previous quarter, driven by global supply concerns and higher premiums in Europe. The LME October aluminium premium over November also increased to $18 per ton from $5.85 three weeks ago. Looking ahead, the global aluminium market is expected to move closer to balance by 2025, with demand boosted by lower borrowing costs and Chinese stimulus measures. However, Rusal forecasts a global surplus of 500,000 metric tons in 2024, narrowing to 200,000-300,000 tons in 2025. Technically, aluminium is experiencing short covering, with open interest dropping by 2.59% to settle at 2,484 contracts. Prices are supported at 239.1, with potential downside testing at 236.7. On the upside, resistance is likely at 243.4, and a move above this level could see prices testing 245.3. The market remains sensitive to supply disruptions and global economic conditions.
 

Trading Ideas:
* Aluminium trading range for the day is 236.7-245.3.
* Aluminium prices rose on increased fund buying and a shortage of raw material in China.
* Prices rallied on concerns of bauxite supply disruption from Guinea amid an already tight market.
* Japanese stocks fell to 313,100 metric tons by the end of September, down about 4.3% from the previous month.


Cottoncandy
Cotton Candy prices edged up by 0.09% to settle at 57,000, supported by the USDA's reduction in 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. Additionally, ending stocks are forecasted to drop to 12.38 million bales. Acreage under cotton is down by about 9%, but higher yields from timely rains are expected to offset this reduction. However, the upside remains limited due to moderate demand and weak export activity, particularly to Bangladesh. India’s cotton exports for the 2023-24 crop year are estimated to reach 28 lakh bales, an 80% increase from the previous year’s 15.5 lakh bales, driven by demand from countries like Bangladesh and Vietnam. Cotton consumption is projected at 317 lakh bales for the year, with 291 lakh bales consumed by August end. Imports have risen to 16.4 lakh bales, up from 12.5 lakh bales in the previous year. In the U.S., lower cotton production, mill use, and exports for the 2024/25 season have been reported, primarily due to damage from Hurricane Helene. Global cotton production is expected to rise, with increases in China, Brazil, and Argentina offsetting reductions in the U.S. and Spain. Technically, the market saw fresh buying as open interest increased by 0.77% to settle at 131 contracts. Support is at 56,810, and a drop below this level could lead to a test of 56,630. On the upside, resistance is at 57,180, and a move above this could push prices toward 57,370. The market remains sensitive to both domestic crop conditions and global demand trends.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56630-57370.
* Cotton gains as USDA has lowered India's cotton production forecast to 30.72 million bales.
* India’s cotton output for the 2024-25 cropping season is likely to be similar to last year’s levels.
* However upside seen limited amid moderate demand, with weak export activity.
* In the global 2024/25 cotton balance sheet, beginning stocks, production and consumption are increased.


Turmeric
Turmeric prices declined by 1.79%, settling at 13,574, due to lower demand and rising arrivals in key markets. Total arrivals were reported at 14,915 bags, down from 16,975 bags in the previous session, driven by a sharp drop in arrivals at Sangli, where only 890 bags were reported compared to 11,000 bags the day before. Despite the recent price drop, losses from heavy rains in Nanded and Hingoli areas are raising concerns of potential crop damage, which could result in much higher losses than initially anticipated. These supply constraints, coupled with low arrivals and adverse weather conditions, are expected to support prices in the coming weeks. However, downside pressure persists due to increased sowing. In India, turmeric sowing in key states like Maharashtra, Telangana, and Andhra Pradesh is estimated to be 30-35% higher than last year. The total sown area could increase to 3.75-4 lakh hectares, up from last year’s 3-3.25 lakh hectares. In Indonesia, dry weather has accelerated harvesting, which may further add to the global supply and limit upside potential. On the trade front, turmeric exports during April-July 2024 dropped by 13.97%, while imports surged by 429.58%, indicating a significant shift in trade dynamics. Technically, turmeric is experiencing fresh selling as open interest increased by 7.02% to 9,985 contracts, while prices fell by 248. Currently, support is seen at 13,448, with a potential test of 13,322 on further downside. On the upside, resistance is expected at 13,782, and a break above this level could see prices testing 13,990.
 

Trading Ideas:
* Turmeric trading range for the day is 13322-13990.
* Turmeric prices dropped due to lower demand amid a rise in arrivals.
* However downside seen limited amid reports of crop damage due to heavy rains in Nanded and Hingoli areas.
* Turmeric sowing on the Erode line is reported to be double as compared to last year
* In Nizamabad, a major spot market, the price ended at 14154 Rupees dropped by -0.99 percent.


Jeera
Jeera prices declined by 0.79% to settle at 25,845, weighed down by expectations of higher production. India's jeera production is projected to increase by 30% this season, reaching 8.5-9 lakh tonnes due to a significant rise in the sowing area, particularly in Gujarat and Rajasthan. In Gujarat, the sowing area has surged by 104%, while Rajasthan has seen a 16% increase. However, the downside remained limited due to strong domestic and export demand coupled with tight global supplies. Farmers are also holding back stocks in anticipation of better prices, further supporting the market. Globally, jeera production has seen significant increases, with China's output soaring to 55-60 thousand tons, doubling from previous levels. Similarly, production is expected to rise in Syria, Turkey, and Afghanistan, which could add pressure on prices as these new supplies enter the market. In India, favorable weather conditions and increased sowing have led to record production, especially in Gujarat, where output is estimated at 4.08 lakh tonnes. Despite the anticipated higher production, jeera exports have risen sharply. Between April and July 2024, exports increased by 58.31% to 91,070 tonnes compared to the same period last year. In July 2024, exports reached 17,403 tonnes, a 110% jump compared to July 2023. This robust export demand continues to provide some support to prices. Technically, the market is under long liquidation, with open interest decreasing by 1.99% to settle at 1,923 contracts. Jeera prices are receiving support at 25,720, with a further downside target of 25,600. On the upside, resistance is expected at 26,000, and a move above this level could push prices toward 26,160. The market remains balanced between strong demand and the expectation of increased production.
 

Trading Ideas:
* Jeera trading range for the day is 25600-26160.
*  Jeera prices dropped as the expectation of higher production weighed on the prices.
* However downside seen limited amid robust domestic and export demand besides tight global supplies.
* Turkey anticipates producing 12-15 thousand tons, while Afghanistan's output could double.
* In Unjha, a major spot market, the price ended at 26249.75 Rupees gained by 0.09 percent.

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