. Daily Commodity Analysis - Gas Surge, Traders Retreat, China's Impact.

Daily Commodity Analysis – Gas Surge, Traders Retreat, China’s Impact.

Daily Commodity Analysis – Gas Surge, Traders Retreat, China’s Impact.

16 Nov 2023

Introduction:

In the commodities landscape, natural gas faces a potential loss of recovery momentum as traders reduce open interest positions, signaling caution in the market. Meanwhile, copper prices declined due to concerns over China’s property market woes, impacting the sector’s substantial role in the economy. Despite challenges, copper holds onto weekly gains, supported by resilience in industrial production. Additionally, gold retains recent gains amid lingering Fed uncertainty, while oil prices dip due to a build in US crude and apprehensions about China’s demand.

Natural Gas:

Natural gas further recovery could lose traction.

According to CME Group’s preliminary data on natural gas futures markets, traders reduced their open interest positions for the first time since October 31, with a decrease of approximately 4.6K contracts on Wednesday. Concurrently, trading volume declined for the second consecutive session, this time by around 1.2K contracts.

Natural gas prices recorded significant gains on Wednesday. However, this increase was accompanied by a decrease in both open interest and volume, indicating that additional upward movement may not be favored in the immediate future. Meanwhile, the $3.000 per MMBtu level continues to serve as a notable support area for the time being.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.167| Positive Crossover | Bullish
  • MA 20: 3.156| Positive Crossover | Bullish
  • MA 50: 3.198| Positive Crossover | Bullish

Simple:

  • MA 5: 3.151| Positive Crossover | Bullish
  • MA 20: 3.107| Positive Crossover | Bullish
  • MA 50: 3.286| Negative Crossover | Bearish

RSI (Relative Strength Index): 54.46| Buying Zone | Bullish

Stochastic Oscillator: 86.23| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 3.237 | R2: 3.463
  • S1: 3.122| S2: 2.970

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 3.298 | Take Profit: 3.463 | Stop Loss: 3.208.

Copper:

Copper dips on China property market woes.

Within the realm of industrial metals, copper prices experienced a decline on Thursday, mirroring data that revealed increased vulnerabilities in China’s property market.

Recent data indicates a sustained decline in Chinese house prices throughout October, offering a minimal reprieve for the property sector, constituting a substantial portion of China’s economy. This sector significantly influences copper demand.

Despite this, copper prices maintained a significant portion of their weekly gains, buoyed by other indicators, notably industrial production, which demonstrated resilience in the world’s leading copper-importing nation.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.709 | Positive Crossover | Bullish
  • MA 20: 3.673 | Positive Crossover | Bullish
  • MA 50: 3.656 | Positive Crossover | Bullish

Simple:

  • MA 5: 3.707 | Positive Crossover | Bullish
  • MA 20: 3.655 | Positive Crossover | Bullish
  • MA 50: 3.658 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.4 | Buy Zone | Bullish

Stochastic Oscillator: 96.62| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 3.751 | R2: 3.863
  • S1: 3.671| S2: 3.591

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion:  Stop Buy: 3.778 | Take Profit: 3.863 | Stop Loss: 3.725.

Elsewhere In the Commodity Market.

Gold hold recent gains as Fed uncertainty persists. Oil price declines on US crude build, China demand worries.

Gold up (0.42%) at 1967.21, Silver up (0.75%) at 23.61, Palladium up (1.65%) at 1048.05, Platinum up (0.5%) at 903.71, Brent Crude Oil down (0.43%) at 80.83, WTI Crude Oil down (0.57%) at 76.25 as of writing time.

Key Economic Events & Data Release Today:

(AUD) Employment Change (Oct) Actual 55.0K, Forecast 20.0K, Previous 6.7K at 06:00.

(EUR) ECB President Lagarde Speaks at 17:00.

(USD) Initial Jobless Claims Forecast 220K, Previous 217K at 19:00.

(USD) Philadelphia Fed Manufacturing Index (Nov) Forecast –9.0, Previous –9.0 at 19:00.