It was a winning week (ended October 3) for both Wall Street and commodities despite the US government shutdown, after talks between President Trump and congressional leaders failed to reach an agreement on short-term funding.
The dollar remained under pressure as the stalemate over healthcare subsidies led to the first shutdown in nearly seven years. Meanwhile, soft economic data raised concerns about slowing growth, with US services PMI stalled in September amid a sharp drop in new orders, ADP reported an unexpected 32,000 decline in private payrolls, and Challenger data showed planned hiring hit its lowest year-to-date level since 2009.
Despite the weakening labour market, equity benchmarks surged to record highs as investors bet the cooling labour market would prompt further Fed easing. Market participants now widely expect a rate cut this month, with growing odds of another in December. This dovish sentiment, along with the ongoing shutdown, propelled spot gold above $3,890 per troy ounce for the first time, while silver reached a 14-year high at $ 48.30 per troy ounce due to safe-haven demand and an improving industrial outlook.
On the weekly chart, MCX SILVER futures surged to settle at a record high of Rs 1,45,599 per kg, marking the seventh consecutive positive weekly close. The price is trading above the Supertrend (7,3) and 20 EMA, reflecting a bullish outlook. The uptrend is likely to extend into next week, with immediate resistance anticipated near Rs 1,49,000 and then Rs 1,50,000. On the downside, initial support is placed at Rs 1,42,000, followed by Rs 1,40,000.
Base metals also rallied sharply, with Copper leading the pack for the second week, jumping over 5 percent to $10,765 per tonne,the highest since May 2024, amid Fed rate cut hopes and supply concerns after Freeport declared force majeure at its Grasberg mine. Zinc hit 10-month highs on falling inventories, while aluminium rose above $2,900 per tonne. Bullish sentiment was further supported by China lowering its 2025–2026 non-ferrous metals output growth target to just 1.5 percent, down from 5 percent.
In contrast, WTI crude oil dropped to a four-month low of $60.4 per barrel amid rising concerns of oversupply ahead of the October 5 OPEC+ meeting and signs of weakening US demand. Additional pressure came from soft Chinese factory data and a larger-than-expected 1.8 million barrels build in US inventories. If OPEC+ proceeds with significantly larger production hikes of 5,00,000 bpd starting in November, compared to the modest 1,37,000 bpd increase in October, oil prices could come under further pressure. However, geopolitical risks tied to Trump’s Gaza peace proposal Sunday deadline and G7’s tighter Russian oil sanctions may add volatility.
This week, speeches by key officials from the Bank of England, Bank of Japan, and European Central Bank, as well as preliminary US consumer sentiment and inflation expectation data, are lined up.
Most importantly, with no weekend votes expected, the Senate's failure to pass funding bills on Friday means the shutdown will enter its sixth day on Monday. The ongoing data blackout, including the non-release of the official jobs report, clouds the Fed’s monetary policy outlook. While some Fed officials have urged caution on further rate cuts, upcoming speeches by Chair Jerome Powell and other FOMC members will be closely watched, as they could prompt markets to reassess the rate path in the absence of fresh economic data.
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