. Daily Commodity Analysis - Geopolitics Ease, Gas Gains, Gold Falls.

Daily Commodity Analysis – Gold Inches Up, Silver Rebounds, Natural Gas Futures Rally

Daily Commodity Analysis – Gold Inches Up, Silver Rebounds, Natural Gas Futures Rally

01 May 2024

Introduction

Gold price (XAU/USD) reverses a two-day decline, hovering above $2,280 ahead of the Federal Reserve’s rate decision. As markets adopt a cautious stance pre-Fed meeting, gold inches up to $2,288 during the Asian session. US Dollar Index (DXY) hits a weekly high at 106.40, while Treasury bond yields dip. With Fed expected to maintain rates and a hawkish stance, investors closely watch for cues from the Press Conference. Meanwhile, Silver price rebounds near $26.50 despite a firmer Dollar. In the energy sector, WTI crude remains below $81.00 amid unexpected inventory buildups. Market sentiment shifts as traders speculate on potential Fed rate decisions and monitor energy supply dynamics.

Markets In Focus Today – GOLD

XAU/USD snaps two-day losing streak above $2,280 ahead of Fed rate decision.

Gold price (XAU/USD) posts modest gains around $2,288 on Wednesday during the Asian session. The precious metal edges higher as markets turn to a cautious mood ahead of the Federal Reserve’s (Fed) monetary policy meeting on Wednesday. Elsewhere, the US ISM Manufacturing PMI and ADP Employment Change are due later in the day. Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, recovers to a weekly high of 106.40. The US Treasury bond yields edge lower, with the 10-year yield falling to 4.67%. The US Fed is expected to hold interest rates steady at its May meeting on Wednesday and maintain its hawkish stance. Fed easing expectations have been pushed out further, with the odds of a June cut falling to around 10% and the chance of September rate cuts dropping below 75%, according to the CME FedWatch tool. Investors will take more cues from the Press Conference after the Fed meeting. The hawkish tone of the Fed might lift the Greenback and diminish the appeal of non-yielding metals.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2320.7655 | Negative Crossover | Bearish
  • MA 20 : 2313.2384 | Negative Crossover | Bearish
  • MA 50 : 2243.0835 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2331.0206 | Negative Crossover | Bearish
  • MA 20 : 2339.6539 | Negative Crossover | Bearish
  • MA 50 : 2226.4565 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 47.8173 | Neutral Zone | Neutral

Stochastic   Oscillator : 11.4955 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 2392.8718 R2 : 2440.8082
  • S1 : 2237.6882 S2 : 2189.7518

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2305.57 | Take Profit : 2278.70 | Stop Loss : 2327.55

SILVER

XAG/USD rebounds to near $26.50 despite hawkish Fed.

Silver price recovers its recent losses registered in the previous session, trading around $26.50 per troy ounce during the Asian trading hours on Wednesday. However, US Dollar (USD) strengthened on the back of rising US Treasury yields. Market participants adopt a cautious stance ahead of the Federal Reserve’s (Fed) policy decision. The stronger labor cost data from the United States (US) has reignited discussions about the Federal Reserve potentially delaying rate cuts due to inflationary pressures. The US Employment Cost Index surged by 1.2% in the first quarter, marking its largest increase in a year and surpassing both expectations of 1.0% and the previous figure of 0.9%. This data underscores existing wage pressures, which could exacerbate the impact of persistent inflation within the US economy. Investors are expected to monitor the release of the ADP Employment Change and ISM Manufacturing PMI from the United States on Wednesday, ahead of the Fed’s Monetary Policy Statement. These data releases are likely to provide further insights into the current state of the US economy, influencing market expectations regarding future monetary policy decisions.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 26.74 | Negative Crossover | Bearish
  • MA 20 : 27.04 | Negative Crossover | Bearish
  • MA 50 : 27.24 | Negative Crossover | Bearish

Simple :

  • MA 10 : 26.83 | Negative Crossover | Bearish
  • MA 20 : 27.08 | Negative Crossover | Bearish
  • MA 50 : 27.76 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 34.29 | Sell Zone | Bearish

Stochastic   Oscillator : 10.57 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 27.04 R2 : 28.74
  • S1 : 25.78 S2 : 24.27

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 26.90 | Take Profit : 25.61 | Stop Loss : 27.70

CRUDE OIL

WTI remains under selling pressure below $81.00 amid unexpected oil stockpile build.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $80.80 on Wednesday. The black gold edges lower on rising crude inventories in the United States and easing geopolitical tensions in the Middle East. Crude oil inventories in the United States for the week ending April 26 rose by 4.906 million barrels from a 3.23 million barrel draw in the previous week. The market consensus estimated that stocks would decrease by 1.5 million barrels, according to the American Petroleum Institute (API) on Wednesday. Traders increase their bets that the Federal Reserve (Fed) might delay the interest rate cut and maintain the current benchmark rate for longer amid the robust economy and sticky inflation in the US. This might lead to a stronger US Dollar (USD) and exert some selling pressure on the USD-denominated oil.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 82.6238 | Negative Crossover | Bearish
  • MA 20 : 83.0410 | Negative Crossover | Bearish
  • MA 50 : 81.7851 | Negative Crossover | Bearish

Simple :

  • MA 10 : 82.6176 | Negative Crossover | Bearish
  • MA 20 : 84.1232 | Negative Crossover | Bearish
  • MA 50 : 81.8183 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.1524 | Sell Zone | Bearish

Stochastic   Oscillator : 14.1066 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 85.9270 R2 : 87.5646
  • S1 : 80.6256 S2 : 78.9880

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 80.90 | Take Profit : 78.36 | Stop Loss : 82.49

NATURAL GAS

Futures Rally Amid LNG Rebound, Supply Slowdown.

Natural gas futures held above $2 yesterday, extending gains from the previous session. The rally was fueled by several factors, including the full restart of Freeport LNG’s third train, supply interruptions in the Permian Basin, and forecasts indicating below-average storage injections. The complete restart of Freeport LNG’s third train provided a significant boost to market sentiment. US LPG and LNG exports have reached unprecedented levels in 2024, reflecting the country’s position as a leading exporter of liquefied natural gas. Asian demand continues to be a driving force in the LPG market, with significant production in the US meeting robust Asian PDH demand. Traders should anticipate continued strength in the natural gas market, supported by robust export demand, supply disruptions, and evolving energy consumption patterns driven by AI technologies.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.7678 | Negative Crossover | Bearish
  • MA 20 : 1.7541 | Positive Crossover | Bullish
  • MA 50 : 1.8153 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.7788 | Negative Crossover | Bearish
  • MA 20 : 1.7459 | Positive Crossover | Bullish
  • MA 50 : 1.7404 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.2452 | Buy Zone | Bullish

Stochastic   Oscillator : 65.6140 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.8667 R2 : 1.9349
  • S1 : 1.6459 S2 : 1.5777

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 1.90 | Take Profit : 1.70 | Stop Loss : 2.06

Elsewhere In The Commodity Market

Gold up (0.14%) at 2288.69, Silver up (0.53%) at 26.42, Palladium down (1.34%) at 940.19, Platinum up (0.75%) at 942.02, Brent Crude Oil down (1.73%) at 84.84, WTI Crude Oil down (1.29%) at 80.39 as of writing time.

Key Economic Events & Data Release Today:

(NZD) Employment Change (QoQ) (Q1) Forecast 0.3%, Previous 0.4% at 04:14. (NZD) RBNZ Gov Orr Speaks at 04:30. (GBP) Manufacturing PMI (Apr) Forecast 48.7%, Previous 50.3% at 14:00. (USD) ADP Nonfarm Employment Change (Apr) Forecast 179K, Previous 184K at 17:45. (USD) ISM Manufacturing PMI (Apr) Forecast 50.0, Previous 50.3 at 19:30. (USD) JoLTs Job Openings (Mar) Forecast 8.680M, Previous 8.756M at 19:30