IGI Logo

Gold

The gold market experienced fluctuations in response to global events and economic factors. It initially surged more than 3% due to escalating tensions in the Middle East, driven by the Israel-Hamas conflict. This geopolitical instability led investors to seek the safe-haven appeal of gold. Furthermore, a dip in Treasury yields contributed to gold's rise, as it signaled the belief that the US Federal Reserve would not raise interest rates. However, India's physical gold market shifted to a discount, primarily because rising domestic prices deterred buyers. Dealers in India were offering a discount of up to $2 per ounce, in contrast to the previous week's $5 premiums, which were the highest in over a year. This price increase raised concerns among jewelers, who worried it might limit retail purchases during the upcoming festival season. In China, gold premiums also decreased from recent highs. From a technical standpoint, the gold market witnessed long liquidation, marked by a decrease in open interest by -1.95% to 13,852. Prices dropped by -242 rupees, settling at 59,166. Support levels are at 58,940 and 58,710, while resistance is expected at 59,340, with the potential for prices to reach 59,510.

Trading Ideas:
* Gold trading range for the day is 58710-59510.
* Gold fell as traders continued to monitor the Israel-Hamas war and its impact on the global economy
* Data showed U.S. consumer prices increased in September.
* Commerzbank year-end forecast for gold price has been lowered from $2,000 to $1,900 per troy ounce.

Silver

Initially, silver settled down by -0.35% at 71037, attributed to the New York Federal Reserve's data showing a decline in its manufacturing sector's conditions. The Empire State manufacturing survey reported a drop in general business conditions. Although slightly better than expected, it indicates economic challenges. Furthermore, the University of Michigan's consumer sentiment for the US dropped in October to its lowest in five months, reflecting decreased confidence in current economic conditions and future expectations. This, coupled with the market's belief in the Fed keeping interest rates unchanged this year, affected silver prices. Commerzbank also revised its silver price forecast to $23 per troy ounce by year-end. There are lingering concerns about China's economic recovery, with the CPI index approaching deflationary levels. On a positive note, the rebound in government bonds boosted solar panel producers' equities, which in turn, improved the outlook for silver as an industrial input. From a technical standpoint, the market has witnessed fresh selling, with a 2.33% increase in open interest, settling at 20509. Silver's current support is at 70760, with a possible test of 70480 if it breaks down. Resistance is expected at 71310, with the potential for prices to test 71580 on the upside.

Trading Ideas:
* Silver trading range for the day is 70480-71580.
 Silver remained in range after the latest data showed worsening conditions within its region's manufacturing sector.
* Empire State manufacturing survey's general business conditions index declined to -4.6 in October, down from September's positive reading of 1.9.
* Commerzbank now expects the price of silver to be trading at $23 per troy ounce by year-end, down from the previous forecast of $26.

Crude Oil

Crude oil prices exhibited a -0.28% drop to settle at 7239, mainly due to profit booking. The ongoing Israel-Hamas war remains a key factor in oil supply dynamics. The US oil benchmark saw a 6% surge on Friday, driven by concerns of a broader Middle East conflict. Israeli Prime Minister Netanyahu's pledge to "demolish Hamas" intensified these worries. The United States also marked a record in crude oil production, hitting 13.2 million barrels per day, surpassing the pre-pandemic 2020 peak. However, this increased production hasn't been uniform over the last few years, with many producers prioritizing dividends and buybacks over production growth. Simultaneously, Saudi Arabia and Russia have extended voluntary supply cuts above OPEC+ limits by 1.3 million barrels per day until year-end. The Energy Information Administration (EIA) reported an increase in US crude stocks, rising by 10.2 million barrels, exceeding forecasts. Gasoline and distillate inventories, on the other hand, declined. From a technical perspective, the market saw long liquidation, marked by a significant drop in open interest by -22.68% to 4141. Crude oil's current support level is at 7168, with the potential to test 7097 if it breaks down. Resistance is expected at 7342, and a move above could push prices to test 7445.

Trading Ideas:
* Crudeoil trading range for the day is 7097-7445.
* Crude oil dropped on profit booking as traders continued to monitor the Israel-Hamas war
* US crude oil production hits a record high – EIA
* U.S. crude stocks rose as production jumped to a record high, while gasoline and distillate inventories fell last week

Natural Gas

Natural gas prices fell by -3.32% to settle at 261.8 due to a combination of factors. Increased production, reduced exports to Mexico, and forecasts of mild late October weather have all contributed to this decline. Natural gas production reached a record high in October, surpassing previous levels. However, exports to Mexico have been decreasing, though there are expectations of a boost when New Fortress Energy's plant begins exporting liquefied natural gas. US LNG facilities have seen increased gas flow, and this was further supported by the return of Cove Point. Natural gas production in the Lower 48 US states hit a record high, reaching 103.4 billion cubic feet per day in October. This is up from 102.6 bcfd in September and a previous record of 103.1 bcfd in July. However, exports to Mexico have been on a downward trend, declining from the previous record in September. With mild late October weather expected, there is a decrease in heating and cooling demands, impacting natural gas prices. Demand, including exports, is predicted to remain around 97.3 bcfd in the coming weeks. From a technical standpoint, the market has seen fresh selling with a significant increase in open interest by 28.6%, settling at 26953. Natural gas has current support at 256.3, with potential testing at 250.7 if it breaks down. Resistance is expected at 266.4, with the possibility of reaching 270.9 if prices rise.

Trading Ideas:
* Naturalgas trading range for the day is 250.7-270.9.
* Natural gas fell due to increased production, reduced exports to Mexico
* Natural gas production rose to 103.4 bcfd so far in October, surpassing a record high of 103.1 bcfd in July.
* LSEG said average gas output in the Lower 48 U.S. states rose to an average of 103.4 bcfd so far in October


Copper 

Copper prices increased by 0.34% to settle at 700.5, primarily due to strong demand in China, indicating a stabilizing economy. However, growing inventories and a stronger US dollar limited the gains. Resilient demand in China is notable, with signs of improvement in export and import data. September copper imports reached an intra-year high, although they remained lower than last year. Copper stocks in both LME and SHFE warehouses increased weekly, presenting challenges for the metal used in various sectors like power, construction, and transportation. Peru, the world's second-largest copper producer, saw a 7.5% YoY increase in copper production in August. China's copper imports in September declined by 5.8% compared to the previous year due to robust domestic production and limited demand for foreign supplies. Autumn typically witnesses increased industrial activity and consumer spending. From a technical standpoint, the market observed short covering, with a decrease in open interest by -1.41% to 8602. Copper currently finds support at 698.1, and potential testing at 695.8 if it breaks down. Resistance is expected at 702.5, with the possibility of reaching 704.6 on the upside.

Trading Ideas:
 Copper trading range for the day is 695.8-704.6.
* Copper gains supported by resilient demand in China amid signs of a stablizing economy
* September copper imports by the world's top consumer hit an intra-year high, although still lower than last year's volume.
* Copper production in Peru rose 7.5% year-over-year in August

Zinc

Zinc, displayed a flat performance at 220.45 in the market yesterday. This lackluster movement can be attributed to several factors, including a pessimistic outlook on global economic growth and the growing inventory of this base metal. The International Lead and Zinc Study Group (ILZSG) recently released data indicating an anticipated surplus in the global refined zinc market for both 2023 and 2024. According to ILZSG, the surplus for zinc is projected to reach 248,000 tons in 2023 and an even larger surplus of 367,000 tons in 2024. These surplus figures are significant and could impact zinc pricing and market dynamics in the coming years.  On the supply side, global refined zinc production is expected to grow by 3.7% in 2023, totaling 13.84 million tons, and by 3.3% in 2024, reaching 14.30 million tons.  It's worth noting that a key indicator of market sentiment is the London Metal Exchange (LME) stocks. Total LME zinc stocks have surged from 30,475 tonnes on January 3 to 99,100 tonnes, which may be a reflection of market participants' expectations for the zinc market. From a technical perspective, the market appears to be experiencing fresh buying interest. Open interest has increased by 0.09%, settling at 3,439 contracts. Furthermore, zinc prices have inched up by 0.3 rupees. The current support level for zinc is at 219.9, and if it breaches this level, it could test 219.3. On the upside, resistance is expected at 221.3, and a move above this level could push prices to test 222.1.

Trading Ideas:
* Zinc trading range for the day is 219.3-222.1.
* Zinc settled flat amid gloomy economic growth forecast and rising metal inventory.
* China's Sept consumer prices flat, factory deflation persists
* Global refined zinc markets are likely to see surpluses in both 2023 and 2024


Aluminium

Aluminium, a fundamental industrial metal, faced a decline of -0.22%, settling at $202.6 per ton in the market. This drop can be attributed to a rather grim outlook for the commodity, with supply expected to outstrip demand.  LME aluminium stocks have been on a consistent rise since the beginning of the year. They currently sit at 502,850 tonnes as of October 4, which marks a 12% increase from 447,250 tonnes at the start of the year. Furthermore, these inventories have surged by a staggering 53% compared to the same time last year when only 328,600 tonnes of the metal were stored in LME warehouses. On the trade front, China, a major player in the global aluminium market, saw a dip in its aluminium exports. In September, China exported 471,298.80 tonnes of unwrought aluminium and aluminium products, down from August's figure of 490,131.60 tonnes. China's trade data also indicated that its exports and imports are shrinking at a slower pace, suggesting some signs of a gradual stabilization in the country's economy. Despite these positive developments, China still faces challenges such as deflationary pressures, a property crisis, a slowdown in global growth, and geopolitical tensions. From a technical standpoint, the aluminium market is experiencing fresh selling pressure. Open interest has risen by 2.62%, settling at 3,793 contracts. In addition, aluminium prices have experienced a decline of -0.45 rupees. The current support level for aluminium stands at 202.3, and if this level is breached, it could test 201.9. On the upside, resistance is expected at 203.2, and surpassing this level might lead to prices testing 203.7.

Trading Ideas:
* Aluminium trading range for the day is 201.9-203.7.
* Aluminium dropped as the outlook for the commodity worsened, with supply set to outweigh demand
* LME stocks are currently sitting at 502,850 tonnes, a 12% increase from 447,250 tonnes at the beginning of the year
* China exported 471,298.80 tonnes of unwrought aluminium and aluminium products, in September, down from August's 490,131.60 tonnes.

Cottoncandy

Cottoncandy, a significant player in the global cotton market, witnessed a marginal increase of 0.03%, settling at 59,120, primarily driven by profit booking following a notable development in the cotton industry. The United States Department of Agriculture (USDA) released its October World Agricultural Supply and Demand Estimates (WASDE) report, which had far-reaching implications for the cotton market. One of the key highlights from the USDA report was the downward revision in U.S. cotton production for the 2023/24 season, which is now expected to reach 12.8 million bales.  Another striking revelation from the USDA report is that Brazil is projected to surpass the United States in cotton production for the first time in the 2023/24 season.  Australia's exports of cotton to China surged, reaching 61,319 metric tons worth $130 million in August, the highest since July 2014. In India, the Cotton Association of India (CAI) issued its final estimate for crop production in the 2022-23 season. CAI projected a slightly higher production of 31.8 million bales, up from its previous estimate of 31.1 million bales in July. This estimation differs from the government's third advance estimate of 34.3 million bales for the same season and the industry's production estimate of 29.9 million bales for the 2021-22 season. From a technical perspective, the cotton candy market witnessed short covering as open interest decreased by -0.93% to settle at 107 contracts. Prices experienced a modest increase of 20 rupees. Currently, cotton candy is finding support at 58,360, and a breach of this level could lead to a test of 57,590. On the upside, resistance is expected at 60,100, and surpassing this level might result in prices testing 61,070.

Trading Ideas:
* Cottoncandy trading range for the day is 57590-61070.
* Cotton dropped  on profit booking after prices gained 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 27733 Rupees dropped by -0.16 percent.

Turmeric 

Turmeric prices saw a modest increase of 0.23%, settling at 13,810, driven by concerns of potential yield losses due to unfavorable weather conditions expected in October. While the current crop condition is satisfactory for a harvest period from January to March, the forecast of drier October weather could impact crop growth, which has supported the upward trend in prices. Despite improved crop conditions due to favorable weather, the anticipation of yield losses and reduced supplies has contributed to price stability. Additionally, the market benefits from improved export opportunities, as demand for turmeric has risen both in developed and emerging nations, resulting in a 25% increase in exports. However, farmers' changing priorities are expected to lead to a 20-25% decline in turmeric seeding, particularly in regions like Maharashtra, Tamil Nadu, Andhra Pradesh, and Telangana. Data from April to July 2023 reveals a 15.05% increase in turmeric exports compared to the same period in 2022, indicating strong international demand. Nonetheless, in July 2023, there was a 24.60% drop in exports compared to June 2023, although it showed an 8.05% rise compared to July 2022. In the Nizamabad spot market, a major trading hub, turmeric prices concluded at 13,519.1 Rupees, marking a decrease of -1.36%. From a technical perspective, the market has witnessed fresh buying, with open interest rising by 7.41% to settle at 13,400, accompanied by a price increase of 32 rupees.

Trading Ideas:
* Turmeric trading range for the day is 12908-14452.
* Turmeric gains due to the potential for yield losses caused by the crop's anticipated unfavourable October weather.
* Crop condition is satisfactory and it will be ready for harvest ready for harvest during January to March.
* Support is also evident for improved export opportunities.
* In Nizamabad, a major spot market, the price ended at 13519.1 Rupees dropped by -1.36 percent.

Jeera 

Jeera prices surged by 3.56% to 57,650, driven by low-level recovery and limited availability of quality crops. However, the upside is constrained by sluggish export demand. Global buyers have turned to other sources like Syria and Turkey due to higher Indian jeera prices. Indian jeera remains competitively priced on the global market, but this isn't translating into strong export activity. China, a significant buyer of Indian jeera, has reduced its purchases in recent months, impacting overall Indian exports. The possibility of China resuming purchases in October-November adds uncertainty to market dynamics. Additionally, drier weather in Gujarat is expected to increase arrivals, limiting upward price movement. FICC forecasts a cumin demand of over 85 lakh bags this year, against an expected supply of 65 lakh bags. Jeera exports during April to July 2023 dropped by 7.99% compared to the same period in 2022. In July 2023, there was a 20.30% decrease in exports compared to June 2023 and a significant 58.23% drop compared to July 2022.In the Unjha spot market, a major trading hub, jeera prices closed at 58,527.85 Rupees, marking a modest gain of 0.13%. From a technical perspective, the market has seen short covering, with a 0.76% drop in open interest to 4,311, while prices increased by 1,980 rupees.

Trading Ideas:
* Jeera trading range for the day is 56470-58510.
* Jeera gains on low level recovery amid limited availability of quality crop.
* Global demand of Indian jeera slumped as most of buyers preferred other destinations like Syria and Turkey
* Export is likely to remain down in upcoming months as per the export seasonality.
* In Unjha, a major spot market, the price ended at 58527.85 Rupees gained by 0.13 percent.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer