Weekly Commodity Report

Bullion overview:

The yellow metal was set for a muted finish to the week, as it was pressured by some uncertainty over the long-term direction of interest rates. Resilience in the dollar also weighed on broader metal markets. The yellow metal was set for a muted finish to the week, as it was pressured by some uncertainty over the long-term direction of interest rates. Resilience in the dollar also weighed on broader metal markets. The payrolls data also comes just weeks before the Fed’s final meeting for the year, where the central bank is expected to cut rates by 25 basis points. But recent comments from Fed officials, as well as the prospect of expansionary policies under incoming President Donald Trump, sparked doubts over rates in the coming years. Fed Chair Jerome Powell recent flagged strength in the U.S. economy, but said that it also gave the Fed more headroom to consider further cuts. Higher for longer rates bode poorly for gold and other nonyielding assets, given that they increase their opportunity cost.

Technical levels:

Gold future in the Comex division remained down for second consecutive week. The prices are unable to sustain above the $2700 and are trading below 50-SMA on daily chart. Gold prices have formed a hanging man candle on weekly chart followed by an indecision candle with higher volume. However, volume on weekly chart remained average and diminishing selling momentum with low buying activity may keep the trend sideways in gold this week. A price range of 75000 to 78000 is expected in this week.

The silver prices in the Comex division taking support near $30 and have gained last week. Silver has maintained above the 50, 100 and 200-SMA on weekly time frame which would be supportive for the prices. However, lower buying activity with diminishing selling momentum may keep the trend sideways this week. Silver in MCX may remain in the range of 94000 to 89000, where buying can be initiated near lower prices range.

Energy pack overview :

Oil prices fell on Friday as analysts continued to forecast a supply surplus in 2025 despite the OPEC+ decision to postpone planned supply increases and extend deep output cuts to the end of 2026. The Organization of the Petroleum Exporting Countries and its allies on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026. The group, known as OPEC+ and responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially in China - and rising output elsewhere have forced it to postpone the plan several times. Brent has largely stayed in a tight range of $70-75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East.

Natural gas production remains robust, exceeding 103 Bcf/d. Meanwhile, weather forecasts signal a shift. high pressure systems are expected to dominate much of the western and southern U.S., bringing milder and dry weather

Technical levels:

Crude oil prices in the Comex futures remained down and making lower low on weekly chart. The prices are trading in a congestion area which indicates a large move in the coming days. The prices are trading in a wide range for the past two years, and are still remained near the lower levels of this range, which is $66. Crude oil prices are continue under pressure due to demand worries. In MCX, crude oil are continue trading near crucial support of 5500, below this selling pressure is likely to increase. The prices are remained below 50, 100 and 200-SMA, indicating a downtrend in the coming weeks.

The NYMEX natural gas prices have formed a dogi candle at recent peaks, followed by a red candle on weekly chart. However, short-term trend is up and prices are making higher high which may support the prices near the demand zone of 250. Natural gas prices have given a break-out of cup and handle pattern, formed on daily chart, which may keep the trend up in the coming weeks.

Base metals overview:

Copper prices were subdued on Friday but headed for weekly gains as the U.S. dollar stayed muted, while traders looked for further signals on top consumer China's stimulus measures. Threemonth copper on the London Metal Exchange (LME) dipped 0.1% at $9,068.5 per metric ton, as of 0200 GMT, but was on track for a second straight weekly gain, up 0.7%. The most-traded January copper contract on the Shanghai Futures Exchange (SHFE) slipped 0.2% to 74,350 yuan ($10,231.75) a ton but gained 0.8% for the week. The U.S. dollar rally continues to cool, making metals more affordable for other currency holders. The market's focus is on China's Central Economic Work Conference meeting this month, where top leaders will set economic growth targets. So far, investors have mostly been disappointment about the lack of aggressive fiscal stimulus measures by China to boost its sluggish economy. The U.S. President-elect Donald Trump, who takes office in January, has pledged to impose "an additional 10% tariff" on imports from China. Source: livemint.com

Technical levels:

The December futures copper prices remained up with higher volume on weekly chart and a bounce is expected near the support levels. However, the prices are continually forming lower high on daily chart and are unable to cross 50-SMA which may keep the prices in a range of 830 to 800 this week.

The short-term trend for December futures zinc is up and prices are trading in a range, which may continue for the week. Prices may remain in the range of 293 to 280 and buying can be initiated near the lower range. The prices may take few weeks before resuming an uptrend.

The aluminum prices have traded in a narrow range with rising volume for several weeks. The short-term trend is upside and any correction in prices towards 235 levels could be a good buying opportunity for this week.

MCX Gold:

The CBOE gold volatility index remained at 16% and fell slightly, compared to last week. At the same time, implied volatility in the Comex division remained at 14% last week. The implied volatility of call and put option remained neutral as the trend is sideways. The MCX December gold option’s put/call ratio remained at 1.5, which is favorable for an uptrend.

MCX Silver:

The nearest strike price in silver with a high OI is 90,000 puts and 95,000 calls. While, a small changes in implied volatility of varies strike prices have been seen. The PCR remained at 0.5. A bearish indication from PCR ratio while implied volatility indicates sideways trend for the week.

MCX Crude Oil:

The December futures crude oil options contract has a high OI at 5900 calls and 5600 puts. The CBOE crude oil volatility index declined to 29% in the previous week. The PCR in MCX has declined to 0.46 from 0.95, compared to last week, which could be favorable for downside move. The implied volatility of deep ITM call option has increased sharply which supports bearish trend.

MCX Natural Gas:

The NYMEX natural gas futures has reverse volatility skew pattern which could be bearish for the prices this week. While, the PCR in MCX has declined to 0.65 from 1, compared to last week, which indicates that the profit booking may continue for this week. The Natural gas has a high OI at 300 calls and 230 puts in MCX.