Gas Prices Surge, XAG/USD Holds Strong Above $23 Amid Dollar Dominance.

Introduction:

In the realm of commodities, Natural Gas Futures show signs of reluctance to rebound, as open interest dwindles while trading volumes surge. Meanwhile, Silver (XAG/USD) remains perched above $23.00, but the momentum appears to be waning, as market attention shifts to impending US inflation data. With precious metals facing headwinds from a robust USD and rising yields, the outcome of the August US Consumer Price Index (CPI) release looms large, carrying implications not only for silver but also for other commodities like oil, gold, and copper, each grappling with its unique set of challenges and opportunities.

Natural Gas:

Natural Gas Futures: Further recovery seems unlikely.

Given the CME Group’s advanced prints for the natural gas futures markets, open interest decreased on Tuesday for the second straight session, falling by about 15.5K contracts. On the other hand, volume increased the previous day, building by almost 228,200 contracts.

The sharp increase in natural gas prices on Tuesday was accompanied by a decline in open interest, which suggests that a sustained rise higher is unlikely in the very near future. The $2.90 region per MMBtu emerges as the first barrier before the more important $3.00 region.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 2.716 | Positive Crossover | Bullish
• MA 20: 2.649 | Positive Crossover | Bullish
• MA 50: 2.629 | Positive Crossover | Bullish

Simple:

• MA 5: 2.735 | Negative Crossover | Bearish
• MA 20: 2.629 | Positive Crossover | Bullish
• MA 50: 2.612 | Positive Crossover | Bullish

RSI (Relative Strength Index): 67.25 | Buying Zone | Bullish

Stochastic Oscillator: 83.31 | Buy Zone | Negative

Resistance And Support Levels:

• R1: 2.75 | R2: 2.83
• S1: 2.69 | S2: 2.63

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 2.77 | Take Profit: 2.83 | Stop Loss: 2.73

SILVER:

Ahead of US inflation statistics, the XAG/USD remains above $23.00. Although XAG/USD drifts around $23.00, the positive impetus appears to be lagging. Precious metals are unable to make a substantial upward movement due to a stronger USD and high yields. The US CPI data for August will be released on Wednesday, and all eyes will be on it. The August US Consumer Price Index (CPI) is anticipated to have risen by 0.5% MoM, while the Core measure is anticipated to have increased by 0.2% MoM. However, the economic calendar had nothing pertinent to contribute, and markets remained cautious. At the same time, there is no change in the outlook for Federal Reserve (Fed) tightening. A spike in US bond yields brought on by a high inflation number could have a negative effect on silver prices because they are seen as the opportunity cost of storing non-yielding metals.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 22.96 | Negative Crossover | Bearish
• MA 20: 23.19 | Negative Crossover | Bearish
• MA 50: 23.46 | Negative Crossover | Bearish

Simple:

• MA 5: 22.99 | Negative Crossover | Bearish
• MA 20: 23.11 | Negative Crossover | Bearish
• MA 50: 23.81 | Negative Crossover | Bearish

RSI (Relative Strength Index): 37.93 | Sell Zone | Negative

Stochastic Oscillator: 80.64| Buy Zone | Neutral

Resistance And Support Levels:

• R1: 23.20 | R2: 23.82
• S1: 22.84| S2: 22.25

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 22.62 | Take Profit: 22.25 | Stop Loss: 22.86

Elsewhere In the Commodity Market:

Oil is near a 10-month high due to supply constraints, US inflation data await. Gold prices decline as the dollar and Treasuries firm before CPI data. Copper prices decline as China’s cheer runs dry. After dropping 0.4% the previous day, copper futures fell 0.3% to $3.7780 per pound. Gold is up (0.01%) at 1912.35, Silver is down (0.46%) at 22.94, Palladium is down (0.16%) at 1241.50, Platinum is down (0.26%) at 906.93, Brent Crude Oil is up (0.78%) at 92.78, WTI Crude Oil is up (0.77%) at 89.55 as of the writing time.

Key Economic Events & Data Release Today:

(USD) CPI (MOM) (Aug) at 18:00.

(USD) Crude Oil Inventories at 20:00.