. Daily Commodity Analysis - Gas Falls, Copper Surges, China's Data Dampens

Daily Commodity Analysis – Gas Falls, Copper Surges, China’s Data Dampens

Daily Commodity Analysis – Gas Falls, Copper Surges, China’s Data Dampens

03 Nov 2023

Introduction:

Natural gas futures faced a second consecutive decline on Thursday, as government inventory data failed to bolster bullish sentiment. The market grappled with subdued demand due to weather forecasts and robust production levels. Meanwhile, U.S. natural gas futures declined in anticipation of the upcoming U.S. Energy Information Administration’s (EIA) Weekly Storage Report, with expectations of an 81 billion cubic feet (Bcf) storage increase. Copper prices saw a slight rise, marking a second week of gains, while a bleak outlook persisted due to disappointing economic data from China. Gold and silver prices remained stable in the lead-up to significant nonfarm payrolls data.

Natural Gas:

Natural Gas futures fall Second Day after In-line Storage reports keep the build trend intact.

On Thursday, natural gas futures experienced a second consecutive decline as the most recent government inventory data failed to provide support to the bullish sentiment. This lack of support was exacerbated by the prospect of light demand due to weather forecasts and robust production levels. Even midday weather models offered no respite, further diminishing demand, but despite these challenges, bullish traders persisted in their efforts to mitigate the day’s losses.

U.S. natural gas futures declined in anticipation of the upcoming U.S. Energy Information Administration’s (EIA) Weekly Storage Report. The market is expecting an 81 billion cubic feet (Bcf) increase in storage, in contrast to the previous week’s 74 Bcf and the 99 Bcf from the same period last year. The five-year average for this period is 57 Bcf.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.502| Positive Crossover | Bullish
  • MA 20: 3.432| Positive Crossover | Bullish
  • MA 50: 3.310| Positive Crossover | Bullish

Simple:

  • MA 5: 3.488| Positive Crossover | Bullish
  • MA 20: 3.459| Positive Crossover | Bullish
  • MA 50: 3.247| Positive Crossover | Bullish

RSI (Relative Strength Index): 60.49 | Bullish Zone | Buy

Stochastic Oscillator: 66.67| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 3.572 | R2: 4.005
  • S1: 3.285| S2: 3.002

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 3.669 | Take Profit: 4.005 | Stop Loss: 3.446.

Copper:

Copper prices have risen for the second straight week, but the outlook is bleak.

In the realm of industrial metals, copper prices experienced a slight increase on Friday, marking their second consecutive week of gains. This uptick was attributed to a modest improvement in risk appetite following the recent Federal Reserve decision. Copper futures advanced by 0.2% to reach $3.6928 per pound and had accumulated a weekly gain of more than 1%.

Nonetheless, the overall outlook for copper remained predominantly subdued, primarily due to a series of economic data releases from China, the leading importer of this metal, which fell below expectations. A private survey conducted on Friday revealed that the growth in China’s service sector activity in October was less robust than anticipated. This report followed closely on the heels of data indicating a contraction in manufacturing activity.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.670 | Negative Crossover | Bearish
  • MA 20: 3.650 | Positive Crossover | Bullish
  • MA 50: 3.630 | Positive Crossover | Bullish

Simple:

  • MA 5: 3.675 | Negative Crossover | Bearish
  • MA 20: 3.649 | Positive Crossover | Bullish
  • MA 50: 3.607 | Positive Crossover | Bullish

RSI (Relative Strength Index): 53.24 | Buy Zone | Bullish

Stochastic Oscillator: 59.87| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 3.668 | R2: 3.765
  • S1: 3.588| S2: 3.518

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 3.694 | Take Profit: 3.765 | Stop Loss: 3.652.

Elsewhere In the Commodity Market.

Gold prices remained stable on Friday as traders adopted a cautious approach in anticipation of significant nonfarm payrolls data. Silver (XAG/USD) prices are currently in a holding pattern as traders reduce their positions in preparation for the eagerly awaited U.S. October non-farm payrolls report.

Gold up (0.18%) at 1989.60, Silver down (0.55%) at 22.62, Palladium up (0.31%) at 1115.93, Platinum up (1.02%) at 928.85, Brent Crude Oil down (0.02%) at 86.84, WTI Crude Oil up (0.02%) at 82.48 as of writing time.

Key Economic Events & Data Release Today:

(USD) Unemployment Rate (Oct) Forecast 3.8%, Previous 3.8% at 18:00.

(USD) Nonfarm Payrolls (Oct) Forecast 180K, Previous 336K at 18:00.

(USD) ISM Non-Manufacturing PMI (Oct) Forecast 53.0, Previous 53.6 at 19:30.