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Gold

Gold prices settled up by 0.48% at Rs.75,297 as markets reacted to fresh economic data for clues on the Federal Reserve’s upcoming policy decisions. The US inflation rate eased to 2.4% in September, slightly above the expected 2.3%, slowing progress on disinflation as prices for shelter, transportation services, and food increased. However, the precious metal gained support from a rise in US unemployment claims, which raised doubts about the strength of the labor market amid restrictive interest rates. Investors are now increasingly betting that the Fed will introduce two additional 25 basis point rate cuts this year, followed by more cuts next year. Research firm BMI has revised its 2024 gold price forecast up by nearly 6% to $2,375 per ounce from $2,250, with expectations that prices may trade between $2,500 and $2,800 in the coming months. BMI is neutral to bullish on gold for Q4 2024 and Q1 2025, supported by potential Fed rate cuts and geopolitical tensions. A downside risk includes a potential Donald Trump victory in the upcoming US elections, which could strengthen the US dollar and pressure gold prices. Gold demand in India showed slight improvement ahead of the festive season but remained muted due to record-high prices, with dealers offering discounts of up to $21 per ounce. Chinese demand remained weak as markets were closed for the Golden Week holiday, and global gold demand excluding OTC trading fell 6% year-on-year in Q2 2024 due to high prices. Technically, the gold market is experiencing short covering, with open interest falling by -1.5% to settle at 14,088. Support is seen at Rs.74,895, with a potential test of Rs.74,495 if breached. Resistance is likely at Rs.75,555, with a possible move to Rs.75,815.
 

Trading Ideas:
* Gold trading range for the day is 74495-75815.
* Gold edged higher as markets digested a batch of fresh economic data.
* US inflation rate eased to 2.4% in September but overshot median expectations of 2.3%.
* BMI has revised its 2024 gold price forecast by nearly 6% to $2,375 from $2,250 per ounce.


Silver
Silver prices surged by 1.61% to settle at Rs.90,304, as traders increased bets on an upcoming interest rate cut by the U.S. Federal Reserve, following recent economic data. U.S. inflation in September came in slightly higher than expected, but the annual increase was the smallest in over 3.5 years. Additionally, jobless claims rose to 258,000 for the week ending October 5, surpassing estimates of 230,000. This prompted markets to increase the likelihood of a 25-basis-point rate cut by the Fed in November to 88%, up from 76% prior to the data release. Investors are now shifting focus to the U.S. Producer Price Index data, which is expected to provide further insights into potential rate cuts. Beyond monetary policy, heightened geopolitical tensions, particularly in the Middle East with Israel’s ongoing assault on Hezbollah, are also providing a safe-haven boost for silver, alongside strong demand driven by central banks. In India, silver imports are on track to nearly double this year, driven by strong demand from the solar panel and electronics industries, as well as investors seeking better returns compared to gold. India's silver imports for the first half of 2024 jumped to 4,554 tons, a significant rise from 560 tons a year ago, as buyers restock to guard against rising prices. Technically, the market is under short covering, with open interest dropping by 2.29%. Silver is currently supported at Rs.89,095, and a break below this could lead to testing Rs.87,880. On the upside, resistance is seen at Rs.91,070, and a move above this level could see prices testing Rs.91,830. This outlook suggests a bullish trend amid strong demand and supportive geopolitical factors.
 

Trading Ideas:
* Silver trading range for the day is 87880-91830.
* Silver gains as traders added to US rate cut bets after data
* U.S. consumer prices rise slightly above expectations in September
* The annual inflation rate in the US slowed to 2.4% in September, the lowest since February 2021


Crudeoil
Crude oil prices surged by 4.49% to settle at Rs.6,394, driven by a sharp increase in fuel demand as Hurricane Milton made landfall in Florida, disrupting gasoline supplies. About a quarter of fuel stations in the state ran out of gasoline, pushing up crude prices. Additionally, Middle East supply risks remain a focal point for the market. However, China’s National Development and Reform Commission's vague economic support measures disappointed markets, as investors expected more concrete steps to counter the nation’s economic challenges, including the housing crisis and sluggish consumption. Goldman Sachs noted a slight decrease in geopolitical risk premiums this week after significant increases in Brent implied volatility last week. In the US, crude oil inventories rose by 5.81 million barrels for the week ending October 4, 2024, the largest increase in over five months and far exceeding the market expectation of a 2 million-barrel rise. Stocks at the Cushing delivery hub also increased by 1.247 million barrels. Meanwhile, gasoline stocks fell sharply by 6.304 million barrels, more than the forecasted 1.1 million decline, while distillate stockpiles dropped by 3.124 million barrels. The US Energy Information Administration (EIA) revised its global oil demand growth forecast downward for next year, citing weakening economic activity in China and North America. Global demand is now expected to grow by 1.2 million barrels per day (bpd) to 104.3 million bpd in 2025, about 300,000 bpd lower than previous forecasts. Technically, crude oil is experiencing fresh buying with open interest increasing by 13.71% to 13,587. Support is seen at Rs.6,245, with a further test of Rs.6,096 possible. Resistance is likely at Rs.6,473, with a potential move to Rs.6,552 if breached.
 

Trading Ideas:
* Crudeoil trading range for the day is 6096-6552.
* Crude oil prices rose underpinned by a spike in fuel demand as a hurricane barrelled into Florida
* EIA's US crude inventories show higher than expected build
* The U.S. Energy Information Administration on downgraded its demand forecast for 2025


Naturalgas
Natural gas prices rose by 0.63% to settle at Rs.224.1, driven by expectations of higher demand as the Cove Point LNG export plant in Maryland is set to resume operations soon. This price increase came despite a larger-than-expected storage build and anticipated reduced gas demand from power generators due to Hurricane Milton, which knocked out power to millions in Florida. The storm has since moved into the Atlantic and is expected to weaken as it heads toward Bermuda. In terms of production, U.S. gas output in the Lower 48 states fell to 101.2 billion cubic feet per day (bcfd) in October, down from 101.8 bcfd in September and below the record high of 105.5 bcfd in December 2023. Demand, including exports, is expected to rise from 96.4 bcfd this week to 96.9 bcfd next week, according to LSEG forecasts. Meanwhile, gas flows to U.S. LNG export plants declined to 12.4 bcfd so far in October, down from 12.7 bcfd in September. The U.S. Energy Information Administration (EIA) predicts a slight decline in natural gas production in 2024 to 103.5 bcfd, while demand is projected to hit a record high of 90.1 bcfd. The agency also forecasts LNG exports to increase to 12.1 bcfd in 2024 and 13.8 bcfd in 2025. Technically, the market is seeing short covering, with open interest down by 3.74%, while prices rose by Rs.1.4. Natural gas has support at Rs.219.2, and a break below could lead to testing Rs.214.2. Resistance is seen at Rs.228.1, and a move above this level could push prices toward Rs.232, signaling potential bullish momentum.
 

Trading Ideas:
* Naturalgas trading range for the day is 214.2-232.
* Natural gas edged up on forecasts for higher demand with an increase in gas flowing to LNG export plants.
* US utilities added 82 billion cubic feet of gas into storage.
* The increase lifted the total amount of natural gas storage in the lower 48 states to 3.629 tcf.

Copper
Copper prices rose by 0.74% to settle at Rs.832.35 as traders awaited more stimulus cues from China, with a focus on the upcoming news conference by China's finance ministry. The government is expected to announce plans for fiscal stimulus, including the acceleration of special purpose bond issuances aimed at supporting economic growth. This anticipation comes amid broader efforts by Chinese authorities to revive the economy, which include measures such as lower interest rates, easing mortgage restrictions, and injecting liquidity into banks. In industry news, Tongling Nonferrous Metals Group, a major Chinese copper producer, announced a delay in the start of its new plant until the second half of 2025 due to shortages of raw materials. This has raised concerns about China’s copper expansion plans and has questioned the long-standing belief that state-owned smelters would continue production despite financial challenges. Copper stocks in Shanghai Futures Exchange warehouses have dropped by nearly 60% since early June, indicating reduced inventory levels. On a global scale, the refined copper market posted a 91,000 metric ton surplus in July, down from 113,000 metric tons in June, according to the International Copper Study Group (ICSG). Despite this surplus, China's copper imports in August fell to a 16-month low, with unwrought copper imports declining by 12.3% year-on-year to 415,000 metric tons. From a technical perspective, the copper market is experiencing short covering, with open interest falling by 8.97% to 7,426. Support is seen at Rs.825.2, with a test of Rs.818 levels possible if breached. Resistance is likely at Rs.836.7, and a move above this could see prices testing Rs.841.
 

Trading Ideas:
* Copper trading range for the day is 818-841.
* Copper prices rose as traders and investors awaited a China briefing later this week for more stimulus cues.
* Chinese authorities announced plans to speed up special purpose bond issuances to support economic growth.
* China's Tongling to delay copper output at new plant until H2 2025.


Zinc
Zinc prices surged by 2.28% to settle at Rs.282.75, supported by China’s economic stimulus measures aimed at boosting the struggling property market and broader economy. These measures include liquidity injections, mortgage rate cuts, and easing home purchase restrictions. The National Development and Reform Commission (NDRC) also announced a plan to issue 200 billion yuan in advance budget spending and investment projects for next year. On the supply side, zinc fundamentals remain tight, with the International Lead and Zinc Study Group (ILZSG) revising its forecast for 2024, predicting a global zinc deficit of 164,000 metric tons, largely due to reduced output in Europe, particularly in Ireland and Portugal, as well as in China, Canada, and Peru. Meanwhile, increased production in Australia, Mexico, and Congo may offset some of these declines. The ILZSG also forecast global refined zinc production to fall by 1.8% to 13.67 million tons in 2024. In contrast, global demand for refined zinc is expected to rise by 1.8% to 13.83 million tons, driven primarily by China, where consumption is anticipated to grow 0.7% this year and in 2025. Technically, the market is experiencing fresh buying, with open interest rising by 10.86%, signaling increased bullish sentiment. Zinc is currently supported at Rs.278.2, with a break below potentially testing Rs.273.7. On the upside, resistance is seen at Rs.285.1, and a move above this level could push prices to test Rs.287.5. The current bullish momentum is backed by a combination of supply constraints, robust demand, and China's supportive economic measures.
 

Trading Ideas:
* Zinc trading range for the day is 273.7-287.5.
* Zinc gains supported by China's economic stimulus measures aimed at bolstering the economy.
* BMI hiked its zinc price forecast for 2024 to $2,700, citing tighter market fundamentals.
* Zinc inventories in warehouses monitored by the Shanghai Futures Exchange (SHFE) dropped to 79,980 metric tons.


Aluminium
Aluminium prices surged by 2.08% to settle at Rs.237.5, supported by a drop in stocks at Japan's major ports, which fell to 313,100 metric tons by the end of September, marking a 4.3% decline from the previous month. Additionally, the premium for aluminium shipments to Japanese buyers for the October to December period rose to $175 per metric ton, up 1.7% from the previous quarter. This marked the third consecutive quarterly increase and the highest premium since early 2022, driven by supply concerns and higher premiums in Europe. The global aluminium market is expected to move closer to balance by 2025, with demand bolstered by lower borrowing costs and Chinese stimulus measures. While demand growth in China may slow in 2025, the country's primary market remains in a structural deficit, while the market outside China is oversupplied. Rusal, a major aluminium producer, forecasts a global surplus of around 500,000 metric tons in 2024, narrowing to 200,000-300,000 tons in 2025. China's August aluminium output rose to 3.73 million metric tons, the highest since 2002, as smelters in key production regions, especially Yunnan, benefited from ample hydropower and steady profits. For the first eight months of 2024, China's aluminium production totaled 28.91 million tons, up 5.1% year-on-year. From a technical perspective, the aluminium market is witnessing short covering, with open interest dropping by -2.71% to 2,550. Support is seen at Rs.234.1, with a further test of Rs.230.8 possible if breached. On the upside, resistance is expected at Rs.239.2, and a move above this level could see prices testing Rs.241.
 

Trading Ideas:
* Aluminium trading range for the day is 230.8-241.
* Aluminium gains as Japan's September aluminium stocks down 4.3% m/m.
* Japan's Q4 aluminium premium rises on supply fears amid firmer Europe prices
* The premium of LME October aluminium over November hit $18 a metric ton from a premium of $5.85.


Cottoncandy
Cottoncandy prices settled up by 0.25% at Rs.56,950, driven by concerns over India's cotton production for the 2024-25 season. The USDA has revised India's cotton production forecast down to 30.72 million bales, with ending stocks reduced to 12.38 million bales due to crop damage from excessive rains and pest issues. Acreage in cotton has also dropped by around 9% compared to last year, at 110.49 lakh hectares, as farmers shift to more lucrative crops. Despite this, upside momentum remains limited due to moderate demand and weak export activity, particularly to Bangladesh. India’s overall cotton output for the 2024-25 cropping season is expected to remain at last year’s levels, aided by timely rains and lower pest incidence. However, the cotton crop has been delayed by a month in key producing states like Maharashtra and Gujarat. Cotton exports for the 2023-24 season are estimated at around 28 lakh bales, driven by demand from countries like Bangladesh and Vietnam, a significant increase from last year’s 15.5 lakh bales. On the global front, the U.S. cotton balance sheet for 2024/25 reflects lower production, exports, and ending stocks, with U.S. production down by about 600,000 bales. Global cotton production has also been reduced, with smaller crops in the U.S., India, and Pakistan offset by a larger crop in China. World consumption has been revised down by 460,000 bales, and world ending stocks are now forecasted to be 76.5 million bales. Technically, the market is witnessing fresh buying with open interest increasing by 0.78%. Support is seen at Rs.56,780, with a potential test of Rs.56,600 if breached. Resistance is likely at Rs.57,120, with a possible move to Rs.57,280 if broken.
 

Trading Ideas:
* Cottoncandy trading range for the day is 56600-57280.
* 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 1.3% to settle at Rs.13,822, driven by lower demand amid increased arrivals in the market. However, the downside was limited due to reports of potential crop damage caused by heavy rains in key growing regions like Nanded and Hingoli, where losses could be higher than initially expected. Total arrivals stood at 14,915 bags, down from 16,975 bags in the previous session, with a sharp drop reported at Sangli, where only 890 bags arrived compared to 11,000 bags previously. Despite this short-term weakness, prices are expected to gain support in the coming weeks due to low supply and adverse weather conditions, especially with five months still left before the next harvest. However, upside potential is capped by increased sowing, particularly in Maharashtra, Telangana, and Andhra Pradesh, where turmeric acreage is estimated to be 30-35% higher than last year. Nationwide, turmeric sowing is projected to increase from 3.25 lakh hectares last year to around 4 lakh hectares this year. In terms of exports, turmeric shipments fell by 13.97% during April-July 2024, totaling 61,609.83 tonnes, compared to 71,616.73 tonnes in the same period last year. Imports, on the other hand, rose sharply by 429.58% to 12,828.08 tonnes during the same period. Technically, the market is experiencing fresh selling pressure, with open interest rising by 3.44%. Turmeric is currently supported at Rs.13,708, with a break below possibly testing Rs.13,594. On the upside, resistance is expected at Rs.14,018, and a move above this level could see prices testing Rs.14,214. This suggests a cautious market with potential for price recovery amid tight supply conditions.
 

Trading Ideas:
* Turmeric trading range for the day is 13594-14214.
* 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 settled down by -0.36% at Rs.26,050 as expectations of higher production weighed on the market. However, the downside was limited due to strong domestic and export demand, along with tight global supplies. Farmers are holding back stocks, expecting better prices in the future, which has also lent support to prices. The sowing area in Gujarat has surged by 104%, and in Rajasthan by 16%, which is expected to result in a 30% increase in jeera production this season, estimated at 8.5-9 lakh tonnes. Globally, jeera production has also increased, with China leading the surge, doubling its output to 55-60 thousand tons from the previous 28-30 thousand tons. Higher production is also anticipated in Syria, Turkey, and Afghanistan. As these new supplies enter the market, cumin prices are expected to decline. However, India's jeera exports remain strong, with a 58.31% rise in exports during April-July 2024 compared to the same period in 2023. In July 2024, India exported 17,403.93 tonnes of jeera, a 110.15% increase compared to July 2023. Despite the higher production, robust export demand is expected to support prices, though the increasing global supplies could exert pressure. The total production of cumin in Gujarat is estimated to reach a record 4.08 lakh tonnes, with Rajasthan also showing a 53% production increase. Technically, the jeera market is witnessing long liquidation, with open interest down by -3.68% to 1,962 contracts. Support is currently seen at Rs.25,970, and a break below could test Rs.25,890. Resistance is likely at Rs.26,120, and a move above this level could lead to prices testing Rs.26,190.
 

Trading Ideas:
* Jeera trading range for the day is 25890-26190.
* 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 26487.1 Rupees gained by 0.21 percent.

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