. Daily Commodity Analysis -Copper and Oil Prices Rise Amid Economic Optimism

Daily Commodity Analysis -Copper and Oil Prices Rise Amid Economic Optimism

Daily Commodity Analysis -Copper and Oil Prices Rise Amid Economic Optimism

16 May 2024

Introduction

Gold prices (XAU/USD) retreat slightly in the $2,380s after a strong rally driven by cooler US inflation data and unchanged spending, which altered interest rate expectations. Lower rates typically boost Gold, and despite a minor correction due to profit-taking, the overall uptrend remains intact. Copper and oil prices also rise amid optimistic economic data and demand projections.

Markets In Focus Today – GOLD

Gold pulls back after strong rally.

Gold price corrects after rallying after the release of US data that changed the outlook for interest rates, a key factor for Gold. The data revealed cooling inflation and flatlining spending, which suggests interest rates might fall. Lower interest rates are positive for Gold price and the pair is in an uptrend on the charts.Gold price (XAU/USD) trades slightly lower in the $2,380s on Thursday after making significant gains on the previous day. Gold bulls flexed their muscles following the release of US inflation data that led to a recalibration of interest rate expectations, with implications for both the US Dollar (USD) and Gold price. Gold price is correcting back on Thursday amid profit taking after an over one percent rise on the previous day. The release of cooler US Consumer Price Index (CPI) data and Retail Sales for April led to a change in expectations for the future path of US interest rates, a key factor in Gold valuations.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2351.8334 | Positive Crossover | Bullish
  • MA 20 : 2336.7357 | Positive Crossover | Bullish
  • MA 50 : 2279.0226 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2341.8072 | Positive Crossover | Bullish
  • MA 20 : 2334.2619 | Positive Crossover | Bullish
  • MA 50 : 2284.9033 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.5943 | Buy Zone | Bullish

Stochastic   Oscillator : 91.09 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 2392.8718 R2 : 2440.8082
  • S1 : 2237.6882 S2 : 2189.7518

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2371.53 | Take Profit : 2397.40 | Stop Loss : 2354.61

COPPER

Copper prices sit at 2-year high on China hopes .

Among industrial metals, copper prices pushed higher on Thursday and remained at over two-year peaks amid persistent optimism over more fiscal stimulus in China, as well as increased support for the property market. Beijing said it will begin a massive, 1 trillion yuan ($138 billion) bond issuance this week, while several major cities also relaxed restrictions on home buying to support the property market. Chinese industrial production and retail sales data, due Friday, is now awaited for more cues on the world’s biggest copper importer.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.91 | Positive Crossover | Bullish
  • MA 20 : 4.81 | Positive Crossover | Bullish
  • MA 50 : 4.66 | Positive Crossover | Bullish

Simple :

  • MA 10 : 4.91 | Positive Crossover | Bullish
  • MA 20 : 4.76 | Positive Crossover | Bullish
  • MA 50 : 4.63 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 67.12 | Buy Zone | Bullish

Stochastic   Oscillator : 44.46 | Neutral Zone | Negative

Resistance   And Support Levels :

  • R1 : 5.04 R2 : 5.18
  • S1 : 4.90 S2 : 4.70

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 4.86 | Take Profit : 5.07 | Stop Loss : 4.73

CRUDE OIL

Oil prices rise on slower US inflation, strong demand.

Oil prices extended gains from the previous session on Thursday on signs of stronger demand in the U.S., where data showed slower inflation than markets expected, bolstering the argument for an interest rate cut that could drive greater consumption. “The larger-than-expected drawdown in U.S. crude inventories for last week also offered some calm, while geopolitical tensions continue to rock on in the Middle East.” Elsewhere, U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, showed data from the Energy Information Administration (EIA).Crude inventories fell 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said, versus the 543,000 barrel consensus analyst forecast in a Reuters poll. Gains were constrained after the IEA trimmed its forecast for 2024 oil demand growth, widening the gap between its view and that of producer group OPEC.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.1435 | Negative Crossover | Bearish
  • MA 20 : 80.1294 | Negative Crossover | Bearish
  • MA 50 : 80.6665 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.7025 | Negative Crossover | Bearish
  • MA 20 : 80.4204 | Negative Crossover | Bearish
  • MA 50 : 81.8860 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.7594 | Neutral Zone | Neutral

Stochastic   Oscillator : 82.67 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 85.9330 R2 : 87.5706
  • S1 : 80.6316 S2 : 78.9940

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 78.31 | Take Profit : 76.65 | Stop Loss : 79.84

NATURAL GAS

Bullish Sentiment Continues Amid Heightened Volatility.

U.S. gas futures recover, supported by rising demand.Significant oversupply in storage continues to challenge the market.Shift from net short to net long signals market optimism. U.S. natural gas futures rose , rebounding from a pullback in the previous session, where it reached a multi-month high before slipping due to light profit-taking. The market retains a robust performance this week, buoyed by an upward revision in demand projections. Traders have recently shifted their positions from net short to net long, reflecting a growing bullish sentiment influenced by an increase in LNG export capacity and marginal rises in demand forecasts.In the short term, the natural gas market is expected to experience some volatility, yet the overall outlook remains cautiously bullish.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.1487 | Positive Crossover | Bullish
  • MA 20 : 2.0245 | Positive Crossover | Bullish
  • MA 50 : 1.9291 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.1448 | Positive Crossover | Bullish
  • MA 20 : 1.9682 | Positive Crossover | Bullish
  • MA 50 : 1.8090 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 72.0010 | Buy Zone | Bullish

Stochastic   Oscillator : 98.01 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.8667 R2 : 1.9349
  • S1 : 1.6459 S2 : 1.5777

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.31 | Take Profit : 2.50 | Stop Loss : 2.19

Elsewhere In The Commodity Market

Gold down (0.6%) at 2384.60, Silver up (0.4%) at 29.63, Palladium up (0.4%) at 1014.50, Platinum up (1.41%) at 1070.36, Brent Crude Oil down (0.13%) at 82.74, WTI Crude Oil down (0.16%) at 78.66 as of writing time.

Key Economic Events & Data Release Today:

(JPY) GDP (QoQ) (Q1) Forecast -0.3%, Previous 0.1% at 05:20. (AUD) Employment Change (Apr) Forecast 22.4K, Previous –6.6K at 07:00. (USD) Initial Jobless Claims Forecast 219K, Previous 231K at 18:00. (USD) Building Permits (Apr) Forecast 1.480M, Previous 1.467M at 18:00.