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Daily Commodity Analysis – Gas Prices Fall Amid Stronger USD And Fed’s Hawkish Stance.

Daily Commodity Analysis – Gas Prices Fall Amid Stronger USD And Fed’s Hawkish Stance.

17 Jun 2024

Introduction

Gold and silver prices fall as the US Dollar strengthens. The Federal Reserve’s hawkish stance on interest rates is driving investors towards the USD, reducing demand for non-yielding precious metals. WTI oil price also dips on weak US consumer demand and concerns about China’s economy. Natural gas futures are pressured by rising production and storage, but cash prices surge due to summer demand.

Markets In Focus Today – GOLD

Gold price attracts some sellers on hawkish Fed-inspired USD strength.

Gold price kicks off the new week on a weaker note amid the Fed’s hawkish outlook. Geopolitical risks and political uncertainty could lend support to the safe-haven metal.The recent repeated failures near the 50-day SMA underpin prospects for deeper losses.Gold price (XAU/USD) meets with a fresh supply during the early European trading hours and erodes a part of Friday’s positive move in the wake of the Federal Reserve’s (Fed) hawkish surprise. In fact, policymakers lowered their forecast for the number of rate cuts this year to one from three projected in March. This remains supportive of elevated US Treasury bond yields, which allows the US Dollar (USD) to stand tall near its highest level since early May touched on Friday and is seen as a key factor driving flows away from the non-yielding yellow metal.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2325.7193 | Negative Crossover | Bearish
  • MA 20 : 2333.2162 | Negative Crossover | Bearish
  • MA 50 : 2314.8598 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2325.6584 | Negative Crossover | Bearish
  • MA 20 : 2339.4129 | Negative Crossover | Bearish
  • MA 50 : 2344.2290 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 47.6967 | Neutral Zone | Neutral

Stochastic   Oscillator : 30.8373 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 2417.4629 R2 : 2458.2274
  • S1 : 2285.4964 S2 : 2244.7319

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2326.48 | Take Profit : 2289.14 | Stop Loss : 2355.70

SILVER

XAG/USD retreats to $29 as Fed officials advocates only one rate-cut this year.

Silver price falls after a less-confident pullback move as US bond yields recover.US yields recover as Fed advocates only one rate-cut this year.Investors await the US Retail Sales data for fresh cues on interest rates.Silver price (XAG/USD) falls back to the crucial support of $29.00 in Monday’s European session after a short-lived pullback to near $29.60. The white metal comes under pressure as US bond yields rebound. 10-year US Treasury yields recover to near 4.24% as Federal Reserve (Fed) officials continue to argue in favor of reducing interest rates only one this year. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Silver.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 29.29 | Negative Crossover | Bearish
  • MA 20 : 29.46 | Negative Crossover | Bearish
  • MA 50 : 29.80 | Negative Crossover | Bearish

Simple :

  • MA 10 : 29.25 | Negative Crossover | Bearish
  • MA 20 : 29.34 | Negative Crossover | Bearish
  • MA 50 : 30.24 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.26 | Sell Zone | Neutral

Stochastic   Oscillator : 63.52 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 29.49 R2 : 31.19
  • S1 : 27.72 S2 : 25.99

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 29.12 | Take Profit : 27.72 | Stop Loss : 30.16

CRUDE OIL

WTI holds below $78.00 amid weaker US consumer demand and Chinese data.

WTI price edges lower to $77.75 on Monday.The weaker US Consumer Sentiment and Chinese economic output data weigh on the black gold. China’s Industrial Production came in weaker than expected in May, adding pressure on the world’s top largest oil consumers.West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $77.75 on Monday. The downtick of the black gold is backed by weaker US consumer demand and the downbeat Chinese Industrial Production data. Consumer sentiment dropped to a seven-month low in June, according to the preliminary report from the Michigan Consumer Sentiment Index released Friday. The Consumer Sentiment Index fell to 65.6 in June from May’s final reading of 69.1. The number was lower than expected at 72.0. In response to the data, the WTI price has edged lower amid worries about their personal finances and inflation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 77.6058 | Positive Crossover | Bullish
  • MA 20 : 77.6961 | Positive Crossover | Bullish
  • MA 50 : 78.7630 | Negative Crossover | Bearish

Simple :

  • MA 10 : 76.7634 | Positive Crossover | Bullish
  • MA 20 : 77.2466 | Positive Crossover | Bullish
  • MA 50 : 79.8475 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 52.1231 | Buy Zone | Bullish

Stochastic   Oscillator : 71.4935 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 80.3846 R2 : 81.6628
  • S1 : 76.2468 S2 : 74.9686

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 79.15 | Take Profit : 76.76 | Stop Loss : 81.06

NATURAL GAS

Futures initially climbed above $3/MMBtu on summer heat anticipation, but retreated on increased production whispers.

U.S. natural gas futures experienced a volatile week, ultimately succumbing to bearish pressure. Prices initially climbed above $3/MMBtu on anticipation of scorching summer heat, but quickly retreated on whispers of increased production and a slightly less brutal heatwave forecast. This price decline in futures contrasted sharply with the cash market, where prices surged due to a scramble for supply ahead of the expected late-June heat spike.The recent bearish sentiment can be attributed to a confluence of factors. The EIA’s storage report revealed comfortable storage levels, exceeding both last year’s figures and the five-year average. With ample storage, rising production, and the MVP’s imminent arrival, the short-term outlook for natural gas futures leans bearish. However, the upcoming heatwave could inject some bullish life into cash prices. Ultimately, traders should keep a close eye on storage reports.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.7366 | Negative Crossover | Bearish
  • MA 20 : 2.6197 | Positive Crossover | Bullish
  • MA 50 : 2.3548 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.7427 | Negative Crossover | Bearish
  • MA 20 : 2.6343 | Positive Crossover | Bullish
  • MA 50 : 2.2203 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 57.8833 | Buy Zone | Bullish

Stochastic   Oscillator : 65.3717 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2.7527 R2 : 3.0177
  • S1 : 1.8947 S2 : 1.6297

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.74 | Take Profit : 3.05 | Stop Loss : 2.56

Elsewhere In The Commodity Market

Gold up (0.49%) at 2321.03, Silver down (1.17%) at 29.19, Palladium up (0.37%) at 893.28, Platinum down (0.34%) at 952.76, Brent Crude Oil up (0.5%) at 82.61, WTI Crude Oil down (0.52%) at 78.03 as of writing time.

Key Economic Events & Data Release Today:

(EUR) ECB President Lagarde Speaks at 05:00.