. Daily Commodity Analysis - Commodity Market Dynamics Report

Daily Commodity Analysis – Commodity Market Dynamics Report

Daily Commodity Analysis – Commodity Market Dynamics Report

07 Dec 2023

Introduction

Welcome to our comprehensive update on the current dynamics shaping the commodity market. In this edition, we delve into the intricate movements of gold, natural gas, and WTI crude, offering insights into their recent performances and the factors influencing their trajectories. From the anticipation surrounding key economic data releases to the technical nuances revealed by charts, join us as we analyze the pulse of these crucial commodities and explore the broader economic landscape they inhabit. Let’s navigate the intricate balance of supply, demand, and market sentiment that is defining the course of these commodities in today’s dynamic financial environment.

Market In Focus Today – GOLD

Gold Holds Steady Amid Anticipation of Key US Jobs Data Release”

Gold steadied around the $2,030 per ounce mark on Thursday, finding a measure of stability after recent bouts of heightened volatility. Investor attention is notably fixed on the upcoming US monthly jobs report, seen as a key determinant for insights into future interest rate trajectories. On the economic front, Wednesday’s data revealed a decline in US job openings to a 2-½-year low in October. Additionally, private payrolls for November registered below expectations, indicating a slowdown in the labor market. As a response to these developments, markets are now assigning a roughly 60% probability of a Federal Reserve rate cut in March. In a global context, traders are increasingly betting on a rate cut by the European Central Bank (ECB) in March, influenced by dovish comments from ECB officials. Francois Villeroy, a member of the ECB and the head of the Bank of France, expressed concerns on Wednesday, stating that “disinflation is happening more quickly than we thought.” These sentiments contribute to the growing expectation of monetary policy adjustments in the coming months.

Technical   Overview with Chart:

Moving Averages:

Exponential:

  • MA 10: 2024.63 | Positive Crossover | Bullish
  • MA 20: 2009.25 | Positive Crossover | Bullish
  • MA 50: 1976.73 | Positive Crossover | Bullish

Simple:

  • MA 10: 2031.10 | Negative Crossover | Bearish
  • MA 20: 2001.82 | Positive Crossover | Bullish
  • MA 50: 1957.12 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.68 | Neutral Zone | Neutral

Stochastic   Oscillator: 33.64 | Neutral Zone | Neutral

Resistance   And Support Levels:

  • R1: 2035 R2: 2082.09
  • S1: 2006 S2: 1979

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 2036 | Take Profit: 2050 | Stop Loss : 2031

Natural Gas

Natural Gas Futures Experience Sharp Decline Following Early Advances

An initial rise in natural gas prices proved to be short-lived, primarily attributed to ongoing forecasts of milder weather in the early weeks of December. This has resulted in decreased demand, particularly as US production remains at near-record highs. Anticipation for Thursday’s EIA storage report suggests an above-average draw of 110 Bcf, as indicated by a Wall Street Journal survey, following colder-than-normal temperatures across the US in the previous week. Despite this, NatGasWeather.com notes that the subsequent 3-4 draws are expected to be lighter than normal due to the recent and upcoming warmer-than-normal patterns, potentially leading to an increase in surpluses exceeding +350 Bcf. Consequently, natural gas for January delivery settled down by 15 cents, or 5.2%, closing at $2.569/MMBtu.

Technical   Overview with Chart:

Moving Averages:

Exponential:

  • MA 10: 2.55 | Negative Crossover | Bearish
  • MA 20: 2.66 | Negative Crossover | Bearish
  • MA 50: 2.77 | Negative Crossover | Bearish

Simple:

  • MA 10: 2.55 | Negative Crossover | Bearish
  • MA 20: 2.69 | Negative Crossover | Bearish
  • MA 50: 2.89 | Negative Crossover | Bearish

RSI (Relative Strength Index): 27.56 | Neutral Zone | Neutral

Stochastic   Oscillator: 5.69 | Neutral Zone | Neutral

Resistance   And Support Levels:

  • R1: 3.09 R2: 3.27
  • S1: 2.52 S2: 2.34

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 2.49 | Take Profit: 2.20 | Stop Loss: 2.60

Elsewhere In the Commodity Market

WTI Crude Futures Inch Toward $70 Per Barrel in Technical Rebound Amid Global Supply Concerns On Thursday, WTI crude futures exhibited a potential technical rebound, approaching the $70 per barrel mark. However, the prices remained in proximity to their lowest levels since late June, following a five-session decline. This downtrend has been driven by ample global supplies and signs of weakening demand. Official data revealed a significant surge in US gasoline inventories by 5.4 million barrels last week, marking the most substantial increase in nine weeks and surpassing forecasts of 1 million barrels. This uptick in inventories points towards subdued demand in the market. Compounding the challenges, data from the Bureau of Economic Analysis (BEA) indicated that US crude exports were close to hitting a record 6 million barrels per day in October, with consistent rises inflows to Europe and Asia. Simultaneously, in November, OPEC reported a production of 27.81 million barrels per day, reflecting a decrease of 90,000 barrels from October, according to Reuters. Saudi Arabia maintained its output close to 9 million barrels, while Iran increased its production. Despite the efforts of OPEC+ members, who recently announced additional cuts of 2.2 million barrels per day, it’s noteworthy that over 1.3 million barrels are extensions of voluntary reductions by major players such as Saudi Arabia and Russia. The overall landscape underscores the challenges in balancing global oil markets amid uncertainties in supply and demand dynamics.

Key Economic Events & Data Release Today:

7:00PM(IST)-USD-Unemployment Claims