. Daily Commodity Analysis -Energy sinks, gold struggles, China waits.

Daily Commodity Analysis – Energy sinks, gold struggles, China waits.

Daily Commodity Analysis – Energy sinks, gold struggles, China waits.

19 Feb 2024

Introduction

Oil prices drop as concerns over sticky US inflation heighten demand worries. Reports of higher producer prices in the US, the largest oil consumer, raise concerns about limited fuel consumption growth amid inflation and higher interest rates. Meanwhile, US natural gas prices hit a three-decade low due to the warmest winter on record, impacting demand. Gold prices rise but remain range-bound amid fears of prolonged US rate hikes. Copper prices slip after a strong prior week, with attention on China’s economic cues for the industrial metal.

Markets In Focus Today – Brent Crude Oil

Oil drops as sticky US inflation heightens demand concerns.

Oil prices fell as investor attention returned to the demand outlook after reports of higher producer prices in the U.S., the world’s biggest oil user, stoked worries that sticky inflation and higher interest rates would limit fuel consumption growth. Both Brent and WTI contracts had settled higher on Friday, as geopolitical tensions in the Middle East offset slowing demand forecasts from the International Energy Agency. Markets are also yet to see the direction of demand from China after it returns from a week-long Lunar New Year holiday, while Presidents’ Day in the United States is set to keep trade relatively muted.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 81.8966 | Positive Crossover | Bullish
  • MA 20 : 81.0715 | Positive Crossover | Bullish
  • MA 50 : 80.4680 | Positive Crossover | Bullish

Simple :

  • MA 10 : 81.6525 | Positive Crossover | Bullish
  • MA 20 : 81.1121 | Positive Crossover | Bullish
  • MA 50 : 79.1014 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.8856 | Buy Zone | Bullish

Stochastic   Oscillator : 88.5776 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 83.3603 R2 : 85.5650
  • S1 : 76.2230 S2 : 74.0183

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 81.67 | Take Profit: 83.49 | Stop Loss: 80.73

NATURAL GAS

Natural gas prices plunge as US set for warmest winter on record.

US natural gas prices have plunged to a near-three-decade low as what is set to be the country’s warmest winter on record slashes demand for the heating fuel just as production surges to record levels.  On Friday, benchmark Henry Hub contracts for March settled at $1.61 per mn British thermal units, up marginally from $1.58/mn Btu on Thursday. Apart from a handful of days in mid-2020 — when the COVID-19 pandemic crushed demand — that is the lowest closing price for the month-ahead contract since 1995.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.8197 | Negative Crossover | Bearish
  • MA 20 : 2.0272 | Negative Crossover | Bearish
  • MA 50 : 2.3137 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.8345 | Negative Crossover | Bearish
  • MA 20 : 2.0831 | Negative Crossover | Bearish
  • MA 50 : 2.3801 | Negative Crossover | Bearish

RSI (Relative Strength Index): 20.7689 | Sell Zone | Bearish

Stochastic   Oscillator : 2.5901 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 3.0654 R2 : 3.3340
  • S1 : 2.1960 S2 : 1.9274

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.72 | Take Profit: 1.48 | Stop Loss: 1.86

GOLD

Gold prices find support above $2,000, but still range bound on rate woes.

Gold prices rose in Asian trade on Monday, extending a rebound from one-month lows after recently breaking below a key support level, although fears of higher-for-longer U.S. rates kept prices largely range-bound. The yellow metal had briefly broken below the $2,000 an ounce earlier in February, as stronger-than-expected U.S. inflation readings saw traders largely price out the prospect of early interest rate cuts by the Federal Reserve. While gold rebounded back above the support level over the past two sessions, it still remained largely within a $2,000- $2,050 an ounce trading range established since mid-January. The yellow metal has struggled to make headway in the face of sticky U.S. inflation and a hawkish outlook for interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2015.7076 | Positive Crossover | Bullish
  • MA 20 : 2021.3127 | Negative Crossover | Bearish
  • MA 50 : 2021.1119 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2017.1239 | Positive Crossover | Bullish
  • MA 20 : 2024.0081 | Negative Crossover | Bearish
  • MA 50 : 2032.7837 | Negative Crossover | Bearish

RSI (Relative Strength Index): 48.6786 | Buy Zone | Bullish

Stochastic   Oscillator : 34.4987 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 2069.3814 R2 : 2087.5486
  • S1 : 2010.5686 S2 : 1992.4014

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 2012.09 | Take Profit: 2031.85 | Stop Loss: 2000.70

COPPER

Copper prices slip, China cues in focus.

Among industrial metals, copper prices fell on Monday, but were sitting on strong gains from the prior week in hopes of improving economic conditions in China. Copper futures expiring in March fell 0.4% to $3.8083 a pound, after surging over 4% in the prior week. Data showing increased consumer spending in China, over the Lunar New Year holiday, ramped up hopes over a broader economic recovery in the world’s largest copper importer.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 3.78 | Positive Crossover | Bullish
  • MA 20 : 3.73 | Positive Crossover | Bullish
  • MA 50 : 3.77 | Positive Crossover | Bullish

Simple :

  • MA 10 : 3.77 | Positive Crossover | Bullish
  • MA 20 : 3.73 | Positive Crossover | Bullish
  • MA 50 : 3.78 | Positive Crossover | Bullish

RSI (Relative Strength Index): 61.25 | Buy Zone | Bullish

Stochastic   Oscillator : 86.5 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 3.82 R2 : 3.88
  • S1 : 3.75 S2 : 3.68

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 3.76 | Take Profit: 3.84 | Stop Loss: 3.70

Elsewhere In The Commodity Market

Gold is up (0.32%) at 2019.47, Silver is down (1.23%) at 23.11, Palladium is up (1.35%) at 959.32, Platinum is up (0.58%) at 908.84, Brent Crude Oil is down (1.02%) at 82.62, WTI Crude Oil down (0.98%) at 77.69 as of writing time.

Key Economic Events & Data Release Today:

(AUD) RBA Meeting Minutes at 19:30. (CNY) PBoC Loan Prime Rate (Feb) Forecast 3.45%, Previous 3.45% at 20:45.