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October 8, 2020

Commodities Outlook
Daily Commodities Outlook

Daily Recommendations

ICICI Securities – Retail Research


Commodity Expiry Action Entry Target Stop Loss Time Frame
Crude oil Oct Sell 2930-2935 2830 3000 Intraday
Nickel Oct Sell 1067-1068 1055 1075 Intraday

• PRODUCT 2

Research Analysts
Raj Deepak Singh Mohit Agarwal Dipesh Dedhia
rajdeepak.singh@icicisecurities.com mohit.agarwal@icicisecurities.com dipesh.dedhia@icicisecurities.com
Daily Snapshot

Recent Developments Global Price Performance

Commodities Outlook
• Gold prices on Wednesday hovered near a one-week low hit in Exchange Commodity LTP ($) Change % Change
the previous session, after US President Donald Trump halted COMEX GOLD 1889.50 -1.30 -0.07%
new stimulus talks, bolstering the dollar COMEX SILVER 23.91 0.01 0.05%
NYMEX CRUDE OIL 39.88 -0.07 -0.18%
• US Federal Reserve policymakers split over how to apply a new
strategy for monetary policy at their September meeting. Amid NYMEX NATURAL GAS 2.58 -0.01 -0.46%
growing doubts about the path of the economy, they offered no LME COPPER 6647.50 -17.75 -0.27%
clear sense of their next steps to offset the Coronavirus recession, LME NICKEL 14540.00 -12.50 -0.09%
minutes from their September meeting showed LME LEAD 1798.75 1.00 0.06%
LME ZINC 2368.75 2.75 0.12%
• Top White House officials on Wednesday downplayed the
possibility of more Coronavirus relief while House Speaker Nancy ICE COTTON 67.78 0.15 0.22%
Pelosi disparaged US President Donald Trump for backing away
from talks on a comprehensive deal
MCX Price Performance

ICICI Securities – Retail Research


• However, after having shut down the deal's negotiations on
Tuesday, Mr Trump wrote on Twitter that Congress should Commodity Expiry LTP (₹) Change % Change
provide money for airlines, small businesses, and stimulus checks GOLD Dec-20 50022 -504 -1.00%
of $1,200 for individuals SILVER Dec-20 60327 -244 -0.40%
CRUDE OIL Oct-20 2923 -49 -1.65%
• The US trade deficit surged in August to the largest in 14 years
with imports climbing again, suggesting that trade could be a NATURAL GAS Oct-20 190.00 1.90 1.01%
drag on economic growth in the third quarter COPPER Oct-20 522.20 9.55 1.86%
NICKEL Oct-20 1063.50 -1.30 -0.12%
• Oil prices fell nearly 2% on Wednesday after US President
Donald Trump dashed hopes of another stimulus package to LEAD Oct-20 147.85 1.15 0.78%
boost the Coronavirus-hit economy and after US crude ZINC Oct-20 190.10 0.30 0.16%
inventories rose in the most recent week COTTON Oct-20 18360 70 0.38%

Source: Bloomberg, Reuters, ICICI Direct Research


Short Term Outlook

MCX Gold Daily Chart Bullion Outlook

Commodities Outlook
58000
• Gold prices opened sharply lower with a gap on Wednesday and
56000
fell further for most of the session till a low of | 49880
54000
52000 • Overall, prices have been consolidating in the range of | 49900-
50000 50900 levels in the last few sessions as scepticism over a new
48000 fiscal stimulus to support Americans in this pandemic has
46000 dampened fresh demand for bullion
44000
42000 • Therefore, we believe gold prices will remain in a range of
40000 | 49900-50900 in the short-term

16-Sep
23-Sep
30-Sep
1-Jul
8-Jul

12-Aug
19-Aug
26-Aug
22-Apr
29-Apr

7-Oct
6-May

3-Jun

15-Jul
22-Jul
29-Jul
27-May
13-May
20-May

10-Jun
17-Jun
24-Jun

5-Aug

2-Sep
9-Sep
MCX Crude Oil Daily Chart Energy Outlook

ICICI Securities – Retail Research


3500 • Crude oil prices started Wednesday’s trade on a weak note,
3000 opening lower with gap. Prices fell further in most of the session
till a low of | 2881
2500

2000 • Prices have taken strong resistance near | 3000 level as US crude
inventories rose more than expectations along with global fuel
1500
demand, which continues to remain a major concern due to
1000 renewed travel restrictions
500
• Hence, we expect crude prices to fall from current levels towards
0 an immediate support of | 2830
16-Sep
23-Sep
30-Sep
1-Jul
22-Apr
29-Apr

8-Jul

12-Aug

26-Aug
19-Aug

7-Oct
6-May

3-Jun

15-Jul

29-Jul
22-Jul
13-May
20-May
27-May

10-Jun
17-Jun
24-Jun

5-Aug

2-Sep
9-Sep

Source: Bloomberg, Reuters, ICICI Direct Research


Key Parameters

Daily Pivot Levels Gold/Silver Ratio

Commodities Outlook
Commodity Expiry S2 S1 Pivot R1 R2 120

GOLD Dec-20 49607 49814 50088 50295 50569 110


SILVER Dec-20 58605 59466 60199 61060 61793
100
CRUDE OIL Oct-20 2839 2881 2923 2965 3007
NATURAL GAS Oct-20 176.3 183.1 190.2 197.0 204.1 90

COPPER Oct-20 500.9 511.6 518.7 529.4 536.5 80


NICKEL Oct-20 1046.7 1055.1 1064.9 1073.3 1083.1 Gold/Silver Ratio rebounded recently as
70 Silver corrected more than Gold
LEAD Oct-20 144.0 145.9 147.1 149.0 150.2
ZINC Oct-20 184.7 187.4 190.3 193.0 195.8 60

7-Jul

11-Aug
18-Aug
25-Aug

15-Sep
22-Sep
29-Sep
21-Apr
28-Apr

6-Oct
5-May

2-Jun
9-Jun

14-Jul
21-Jul
28-Jul
16-Jun
23-Jun
30-Jun
12-May
19-May
26-May

4-Aug

1-Sep
8-Sep
COTTON Oct-20 18207 18283 18337 18413 18467

SPDR Gold Holdings (Tonnes) US Crude Oil Inventories (Barrels)

ICICI Securities – Retail Research


1400
Release Date Time (IST) Actual Forecast Previous
ETF Holdings increased rapidly in the previous few months,
1300
which supported the Gold prices Oct 07, 2020 8:00 PM 0.501M 0.294M -1.980M
1200 Sep 30, 2020 8:00 PM -1.980M 1.569M -1.639M

1100 Sep 23, 2020 8:00 PM -1.639M -2.325M -4.389M

1000
Sep 16, 2020 8:00 PM -4.389M 1.271M 2.032M
Sep 10, 2020 8:30 PM 2.032M -1.335M -9.362M
900
Sep 02, 2020 8:00 PM -9.362M -1.887M -4.689M
800
7-Jul

15-Sep
22-Sep
29-Sep
2-Jun
9-Jun

11-Aug
18-Aug
21-Apr
28-Apr

25-Aug
5-May

6-Oct
16-Jun

30-Jun
23-Jun

14-Jul
21-Jul
28-Jul

1-Sep
8-Sep
12-May
19-May
26-May

4-Aug

The Energy Information Administration's (EIA) Crude Oil Inventories measures the
weekly change in the number of barrels of commercial crude oil held by US firms.
Standard & Poor's Depository Receipt (ETF) Holdings

Source: Bloomberg, Reuters, ICICI Direct Research


Economic Indicators

Today’s Major Economic Releases

Commodities Outlook
TIME (IST) COUNTRY DATA & EVENTS ACTUAL FORECAST PREVIOUS
6:00 PM US Initial Jobless Claims - 820K 837K
8:00 PM US Natural Gas Storage - 73B 76B

ICICI Securities – Retail Research


Source: Bloomberg, Reuters, ICICI Direct Research
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

Commodities Outlook
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road no.7, MIDC
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities – Retail Research


Source: Bloomberg, Reuters, ICICI Direct Research
October 8, 2020 ICICI Securities Ltd. | Retail Equity Research 6
Disclaimer
We /I, Raj Deepak Singh BE, MBA (Finance), Mohit Agarwal BSc, MBA (Finance), Dipesh Dedhia BCom, MBA (Finance),Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect
our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Analysts are not registered as research analysts by FINRA and are
not associated persons of the ICICI Securities Inc. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or

Commodities Outlook
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