Metals & Energy 24 OCT 2019

Market News

Gold Rises, Approaching $1,500 as Fed Day Nears

It's a week until Fed Day and gold rose to settle just a few dollars short of market longs’ desired perch of $1,500. The
U.S. central bank’s Oct. 29-30 policy meeting is expected to result in the third quarter-point rate cut since July. U.S.
gold futures for December delivery settled up $8.20, or 0.6%, at $1,495.70 per ounce. In post-settlement trade, it was
up $8.85, or 0.6%, at $1.496.35 by 3:20 PM ET (19:20 GMT). Spot gold, which tracks live trades in bullion, was up
$5.79, or 0.4%, at $1,493.38. Bullion is up around 16% on the year, although it has come off from its six-year highs of
above $1,550 in September. Aside from expectations for continued Fed easing, gold was also supported on
Wednesday by uncertainties over Brexit as U.K. Prime Minister Boris Johnson’s divorce plan from the EU remained in
limbo. Other global and financial troubles lent support as well. “Gold continues to find buyers at selloff times as
worries about Brexit, Turkey, China tariff talks and U.S. politics are all positive,” said George Gero, precious metals
analyst at RBC Wealth Management in New York. “And of course, we have the Fed coming, which is one of the biggest
factors of all.” According to Investing.com’s Fed Rate Monitor Tool, investors see a 93% chance of the Fed cutting rates
for the third time this year next week.

(Source: Investing)

Oil Pops on Surprise U.S. Stock Slide; Eyes Back on OPEC

A surprise dip in U.S. inventories has thrown crude oil a lifeline just as expectations for deeper output cuts by OPEC
and its allies dimmed. West Texas Intermediate, the benchmark for New York-traded crude futures, as well as
London’s Brent, the global gauge for oil, settled Wednesday’s official U.S. session in oil up more than 1% each. The
rally came after the U.S. Energy Information Administration reported a 1.7-million-barrel crude inventory drop for the
week ended Oct.18, versus analysts’ expectations for a build of 2.2 million barrels. WTI rose $1.49, or 2.7%, to settle at
$55.97 per barrel. Brent settled up $1.47, or 2.46%, at $61.17 per barrel. Oil prices were pressured prior to the release
of the EIA data, after Russian Energy Minister Alexander Novak said no formal proposals have been put forward to
change the terms of a global deal on curbing oil supplies that was agreed between OPEC and its allies. The rebound
came as investors continued to see whopping declines in inventories of fuel such as diesel and gasoline over the past
month as refiners made less of such products amid plant closures to meet new maritime fuel processing standards.
Gasoline inventories fell by 3.1 million barrels, compared with an expected drop of 2.27 million barrels. Distillate
stockpiles dropped by about 2.72 million barrels, versus forecasts for a decline of about 2.8 million barrels. Refinery
run rates picked up slightly to about 85% of capacity from the previous week’s 83%. But that was still way below
industry norm of around 90% at least. Investing.com analyst Barani Krishnan said the surprise draw in crude was also
helped by a significant drop in crude imports. Despite being the world’s largest producer of light crude, the United
States still buys significant volumes of heavy grade crude each week from Middle East and other producers. “The
reason for the draw is because imports fell by over 400,000 barrels to reach below 6 million for the first time in a
while. It probably became obvious to many that you don’t need to import as much with current refinery run rates.”
And Krishnan added, exports ticked up to almost 3.7 million barrels a day,” Krishnan added. U.S. oil production
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remained at 12.6 million barrels per day. “The market’s focus, accordingly, is on
the continuous slump in distillate and gasoline inventories that are busting expectations,” Krishnan said. “And, of
course, talk of even more OPEC cuts despite Russia playing mind games as always with the market.” Retail gasoline
prices have slowly working their lower, which typically occurs in the fall. AAA's Daily Fuel Gauge Report said the U.S.
average was $2.628 a gallon, down 1.3% from Wednesday and 1% for the month. For the year, they're up nearly 16%.
(Source: Investing)

Major Global Events/Announcements

Indian Time Nation Event/Data Forecast Previous
12:30pm EUR Spanish Unemployment Rate 13.80% 14.00%

12:45pm EUR French Flash Services PMI 51.6 51.1

EUR French Flash Manufacturing PMI 50 50.1

1:00pm EUR German Flash Manufacturing PMI 42 41.7

EUR German Flash Services PMI 52 51.4

1:30pm EUR Flash Manufacturing PMI 46.1 45.7

EUR Flash Services PMI 51.9 51.6

2:00pm GBP High Street Lending 42.2K 42.6K

5:15pm EUR Monetary Policy Statement

EUR Main Refinancing Rate 0.00% 0.00%

6:00pm EUR ECB Press Conference

USD Core Durable Goods Orders m/m -0.20% 0.50%

USD Durable Goods Orders m/m -0.50% 0.20%

USD Unemployment Claims 216K 214K
6:30pm CNY CB Leading Index m/m 1.10%

EUR Belgian NBB Business Climate -6 -5.7

7:15pm USD Flash Manufacturing PMI 50.7 51.1

USD Flash Services PMI 51 50.9

7:30pm USD New Home Sales 710K 713K

8:00pm USD Natural Gas Storage 87B 104B

Tentative USD Federal Budget Balance 83.5B -200.3B

RED & BOLD - High Impact

COMMEX Price Update

in US$ Units Previous Day PCP % Change

Gold T oz. 1487.5 1495.7 0.55
Silver T oz. 17.5 17.58 0.46
Crude Barrel 54.48 55.97 2.73
Copper LB 2.635 2.668 1.25
Natural Gas MMBTU 2.281 2.284 0.13

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 MCX Key Resistance & Support Levels for the day (in INR)

Call of the Day: Buy Crude around @ 3920 SL @ 3880 Target @ 3980
SYMBOL Supports LTP Resistances Strategy
Bullions
GOLD 05DEC2019 37906 37711 38101 38296 Buy Gold above 38120 SL-37980
38003
37808 37517 38198 38492 Tgt-38300
SILVER 05DEC2019 45098 44675 45524 45952 Silver has strong resistance
around 45600 and support
45311 around 45100, expecting range
44886 44358 45738 46382 bound trading day.
Base Metals
ALUMINIUM 31OCT2019 130.7 129.3 131.8 133.3
131.25
130.1 127.8 132.4 134.7 Strong support around 131
COPPER 31OCT2019 437.5 431.3 441.7 448.0
439.60
434.4 428.1 444.9 451.2 Sell around 440 SL-443 Tgt-435
NICKEL 31OCT2019 1191.9 1187.6 1195.3 1199.7
1193.60
1190.1 1183.3 1197.1 1204.0 Strong resistance around 1200
LEAD 31OCT2019 153.0 145.1 159.2 167.5 Buy around 155.30 SL-154.70 Tgt-
156.10
149.3 140.3 163.0 172.8 156.40
ZINC 31OCT2019 182.3 183.3 186.4 188.1 Buy around 185.20 SL-183.80 Tgt-
185.70
184.3 181.6 187.1 189.8 187
Energy
CRUDEOIL 19NOV2019 3932 3882 3964 4014 Buy around 3920 SL-3880 Tgt-
3948 3980
3909 3854 3988 4043
NATURALGAS 25OCT2019 160.3 155.3 164.1 169.3 Sell around 162.50 SL-164.50 Tgt-
162.20 157
158.1 151.6 166.4 173.2

Traders are advised to keep Disciplined STOP-LOSS. Risks can be very high without STOP-LOSS

Commodity Research Desk

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