. Daily Commodity Analysis - Commodities React to Global Uncertainties.

Daily Commodity Analysis – Commodities React to Global Uncertainties.

Daily Commodity Analysis – Commodities React to Global Uncertainties.

12 Apr 2024

Introduction

Amid mounting inflation concerns, Western Texas Intermediate (WTI) clings below $85.50, settling around $85.00, Friday. The market sentiment is weighed down by fears of prolonged inflation, diminishing prospects for US interest rate cuts. However, geopolitical tensions in the Middle East may cushion WTI’s decline. Meanwhile, in the natural gas realm, technical barriers and anticipation of the EIA Storage Report prompt cautious trading. Gold’s rally nears $2,400, driven by geopolitical uncertainties and expectations of central bank rate cuts. While bullish, caution prevails due to overbought conditions and stabilizing equity markets. Silver follows suit, propelled by easing US producer prices, eyeing $28.74 resistance amid strong bullish momentum.

Markets In Focus Today – CRUDE OIL

WTI holds below $85.50 amid inflation fears.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $85.00 on Friday. The black gold edges lower on the day as the elevated inflation dampened the expectation for US interest rate cuts this year. Nonetheless, the escalating geopolitical tensions in the Middle East might cap the downside of WTI prices in the near term. The recent US inflation and employment reports indicated that the path of easing inflation remains extremely bumpy and the Federal Reserve (Fed) might need to delay the interest rate cuts. According to the FOMC minutes released on Wednesday, participants noted their uncertainty about the elevated high inflation and recent data had not increased their confidence that inflation was moving sustainably down to 2%.” Financial markets have priced in only two rate cuts this year, which will most likely start in September, per the CME FedWatch Tool. The higher-for-longer US rate narrative could exert some selling pressure on black gold as it translates to less demand for oil as the cost of storing crude increases.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 85.3021 | Positive Crossover | Bullish
  • MA 20 : 83.9156 | Positive Crossover | Bullish
  • MA 50 : 81.0213 | Positive Crossover | Bullish

Simple :

  • MA 10 : 85.8061 | Positive Crossover | Bullish
  • MA 20 : 83.8053 | Positive Crossover | Bullish
  • MA 50 : 80.0408 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 63.6898 | Buy Zone | Bullish

Stochastic   Oscillator : 76.0528 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 83.9547 R2 : 85.6260
  • S1 : 78.5440 S2 : 76.8727

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 85.47 | Take Profit : 87.56 | Stop Loss : 84.34

NATURAL GAS

Natural Gas Capped by Technical Resistance Ahead of EIA Storage Report.

U.S. natural gas futures are seeing a downward trend. With the market poised to test the crucial 50-day moving average at $1.961, a significant trend indicator since late January, traders are gearing up for potential volatility.The focus is on today’s EIA weekly storage report, expected to reveal whether market balance has tightened or loosened. Current forecasts suggest a build ranging from +8 to +15 Bcf, which is slightly below the 5-year average of +24 Bcf. This lighter build is attributed to cooler-than-normal temperatures in regions like the Midwest, Northeast, and California, balanced by warmer conditions elsewhere. A build of +13 Bcf is the consensus expectation. The natural gas market is also reacting to global events, particularly the recent attacks on Ukrainian gas storage facilities by Russia. These attacks have driven up gas prices in Europe and underscored the fragility of energy infrastructure in conflict zones.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.7279 | Negative Crossover | Bearish
  • MA 20 : 1.7294 | Negative Crossover | Bearish
  • MA 50 : 1.8556 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.7377 | Negative Crossover | Bearish
  • MA 20 : 1.7020 | Neutral Crossover | Neutral
  • MA 50 : 1.7763 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 45.9791 | Neutral Zone | Neutral

Stochastic   Oscillator : 56.0248 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.8789 R2 : 1.9741
  • S1 : 1.5711 S2 : 1.4759

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 1.72 | Take Profit : 1.49 | Stop Loss : 1.90

GOLD

Gold price sticks to gains near record high, overbought conditions warrant caution for bulls.

Gold price (XAU/USD) climbs to a fresh all-time high on Friday and maintains its bid tone, just below the $2,400 mark heading into the European session. Investors remain concerned about the risk of a further escalation of geopolitical tensions in the Middle East, which, in turn, is seen as a key factor benefiting the safe-haven precious metal. Apart from this, expectations that major central banks will cut interest rates this year offer additional support to the non-yielding yellow metal and contribute to the positive move. The aforementioned supporting factors, to a larger extent, offset the underlying bullish tone surrounding the US Dollar (USD), bolstered by expectations that the Federal Reserve (Fed) may delay cutting interest rates. This, in turn, suggests that the path of least resistance for the Gold price is to the upside and supports prospects for additional gains. That said, extremely overstretched conditions on daily, weekly and monthly charts, along with a stable performance around the equity markets, might cap gains for the XAU/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2324.8264 | Positive Crossover | Bullish
  • MA 20 : 2271.9038 | Positive Crossover | Bullish
  • MA 50 : 2181.1443 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2323.8952 | Positive Crossover | Bullish
  • MA 20 : 2254.8868 | Positive Crossover | Bullish
  • MA 50 : 2143.6391 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 82.3082 | Buy Zone | Bullish

Stochastic   Oscillator : 93.8360 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 2244.9097 R2 : 2291.4069
  • S1 : 2094.3849 S2 : 2047.8877

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2389.84 | Take Profit : 2400.04 | Stop Loss : 2384.18

SILVER

XAG/USD rallies above $28.00 as bullish trend is intact.

Silver surges, bolstered by easing US producer prices, sparking interest in precious metals.Though overbought, strong bullish momentum could target the next resistance at $28.74.Support established at $28.00 and $27.54, key during potential pullbacks.Silver price surges on Thursday after the release of prices paid by producers in the United States (US) showed that factory inflation continues to decelerate, contrasting Wednesday’s red-hot Consumer Price Index (CPI). Investors capitalized on that, as they took advantage of the dip in precious metals and lifted their prices near year-to-date peaks.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 28.30 | Positive Crossover | Bullish
  • MA 20 : 27.79 | Positive Crossover | Bullish
  • MA 50 : 26.68 | Positive Crossover | Bullish

Simple :

  • MA 10 : 28.26 | Positive Crossover | Bullish
  • MA 20 : 27.81 | Positive Crossover | Bullish
  • MA 50 : 26.25 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 82.53 | Buy Zone | Bullish

Stochastic   Oscillator : 88.94 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 29.24 R2 : 30.29
  • S1 : 28.27 S2 : 27.36

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 28.39 | Take Profit : 29.22 | Stop Loss : 28.00

Elsewhere In The Commodity Market

Gold up (1.02%) at 2395.02, Silver up (2.64%) at 29.16, Palladium up (2.23%) at 1070.79, Platinum up (1.23%) at 971.32, Brent Crude Oil up (0.99%) at 90.62, WTI Crude Oil up (1.22%) at 86.06 as of writing time.

Key Economic Events & Data Release Today:

(GBP) German CPI (MoM) (Mar) Forecast –0.4%, Previous 0.4% at 11:30. (GBP) Manufacturing Production (MoM) (Feb) Forecast 0.1%, Previous 0.0% at 11:30. (GBP) GDP (YoY) (Feb) Forecast –0.4%, Previous –0.3% at 11:30. (GBP) GDP (MOM) (Feb) Forecast 0.1%, Previous 0.2% at 11:30. (EUR) ECB Forecast at 13:30.