. Daily Commodity Analysis - Gas at $3.50, Silver Falls as Bears Dominate

Daily Commodity Analysis – Gas at $3.50, Silver Falls as Bears Dominate

Daily Commodity Analysis – Gas at $3.50, Silver Falls as Bears Dominate

10 Oct 2023

Introduction:

In the commodities market, there are intriguing developments to watch. Natural gas recently hit a nine-month high at $3.50 per MMBtu, but diminishing open interest and volume raise questions about a potential correction, with $3.00 as a key battleground. Meanwhile, silver, after reaching a one-week high, faces technical challenges, creating bearish possibilities unless it can maintain strength above $22.20–30. Additionally, the broader commodity landscape is affected by oil’s dip amid Middle East tensions and gold’s surge amidst escalating conflict and market uncertainties.

Natural Gas:

Initial resistance emerges around $3.50.

A On Monday, natural gas prices rose to new nine-month highs of $3.50 per MMBtu. This action was taken in response to declining open interest and volume, and it exposes the possibility of a corrective action in the very near future, with the $3.00 neighbourhood serving as the immediate conflict region.

When considering the CME Group’s advanced prints for the natural gas futures markets, open interest decreased on Monday for the second session in a row, this time by roughly 17.6K contracts. After five consecutive daily gains, volume decreased by approximately 150K contracts in the same direction.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 3.34| Positive Crossover | Bullish
  • MA 20: 3.17 | Positive Crossover | Bullish
  • MA 50: 2.99| Positive Crossover | Bullish

Simple:

  • MA 5: 3.36 | Negative Crossover | Bearish
  • MA 20: 3.11| Positive Crossover | Bullish
  • MA 50: 2.95| Positive Crossover | Bullish

RSI (Relative Strength Index): 71.58 | Buying Zone | Bullish

Stochastic Oscillator: 51.6| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 3.39 | R2: 3.60
  • S1: 3.20| S2: 3.02

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 3.44 | Take Profit: 3.60 | Stop Loss: 3.33.

Silver:

XAG/USD retreats from one week high, seems vulnerable below $22.00.

A new supply for silver causes it to lose some of its overnight gains as it climbs to a one-week high. The technical setup appears to favour the bears and offers the possibility of more losses. To counteract the gloomy picture, continued strength above the $22.20–30 range is required.

Tuesday sees a resurgence of selling pressure for silver, which for the time being appears to have ended a two-day winning streak and reached a one-week high near the $22.00 level set the day before. The price of the white metal remains offered throughout the early hours of the European trading session.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 21.70 | Positive Crossover | Bullish
  • MA 20: 21.61 | Positive Crossover | Bullish
  • MA 50: 22.08 | Negative Crossover | Bearish

Simple:

  • MA 5: 21.75 | Positive Crossover | Bullish
  • MA 20: 21.31 | Negative Crossover | Bearish
  • MA 50: 22.29 | Negative Crossover | Bearish

RSI (Relative Strength Index): 50.53 | Buy Zone | Bullish

Stochastic Oscillator: 93.54| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 22.42 | R2: 23.30
  • S1: 21.60| S2: 20.64

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 21.38 | Take Profit: 20.64 | Stop Loss: 21.89.

Elsewhere In the Commodity Market.

Oil dips on investor caution as market watches Middle East turmoil. Gold prices surge amid escalating Middle East conflict and market uncertainty.

Gold down (0.18%) at 1857.98, Silver down (0.42%) at 21.76, Palladium down (0.22%) at 1134.50, Platinum up (0.51%) at 885.50, Brent Crude Oil down (0.39%) at 87.81, WTI Crude Oil down (0.38%) at 86.08 as of writing time.

Key Economic Events & Data Release Today:

(EUR) ECB President Lagarde Speaks at 17:30.

(USD) FOMC Member Bostic Speaks at 19:00.