USD/INR 94.30 to 94.40 is the floor, and anything closer to 95.50 will bring an aggressive response from the Reserve Bank of India. That is the read from Anindya Banerjee, Head of Commodities Research at Kotak Neo, who spoke in Mumbai on Monday about where crude oil, central banks and trade policy are pushing commodities.
Oil, the Fed and gold
Banerjee said global central bank decisions, persistent crude volatility and shifting macro factors will set short-term trends. Rising oil prices have fed expectations of extended Federal Reserve rate hikes, and that has driven recent selling across bullion. Gold, in his view, is currently following macroeconomic fundamentals instead of acting as a safe haven.
Physical demand in India is another matter. “We have seen a good pickup in consumption demand, jewelry demand, and physical demand since Navratri, and we expect that to hold up into the festive season,” he said. Central bank accumulation and institutional buying continue to give gold a long-term cushion.
Inflation and the rupee
Elevated crude is a direct problem for domestic inflation and currency stability. “For this financial year, inflation is going to rise at least till Jan-Feb,” Banerjee said. Wholesale inflation remains elevated, and consumer inflation is creeping toward 6 per cent.
Copper and the AI trade
Copper, he said, is tied to trade policy and technology sentiment. “Copper is largely a play on the US tariffs… if the AI trade cracks harder in the coming weeks, it can also have a negative impact on copper,” he explained.
For retail investors weighing choppy equity and commodity markets, Banerjee advised using commodities as a structural hedge. “It’s a good opportunity for them to allocate because as we step into 2027, a lot of the risks can actually hit the market,” he said. He named dips in gold and silver as attractive entry points.
A debate over new futures products
Separately, the Commodity Futures Trading Commission held an agricultural conference with Kansas State University, where the agency showed interest in perpetual contracts, 24/7 markets, event contracts and tokenized collateral. The prediction-market platform Kalshi was the event’s sole top-tier sponsor.
Gabe Afolayan, vice president of soybean merchandising at Cargill, was skeptical. “Price discovery and risk management — that’s the ultimate utility,” he said. “And if it’s not broken, don’t fix it.” Perpetual contracts have no expiration date, he noted, while farmers need hedges tied to specific delivery periods to match planting and marketing. Convergence between futures and cash prices needs physical delivery. “You can’t bluff your way out of it,” he said. He also warned that weekend trading could thin liquidity when commercial buyers and sellers are absent, though he saw possible uses for perpetuals on fertilizer or diesel costs.
Jake Chervinsky, CEO of the Hyperliquid Policy Center, said it is not yet appropriate to bring agricultural perpetuals into the U.S. Joe Barker of CHS Hedging said he has “yet to see how event contracts are going to work here.”
Sources
- Global macro headwinds and crude volatility to drive commodity markets: Kotak Neo
- Commodity market
- At AgCon, CFTC Explores New Trading Markets as Agriculture Weighs Risks
Photo: Liberaler Humanist (CC BY-SA 3.0)
