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

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

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

30 Apr 2024

Introduction

Gold prices plummeted to a multi-day low of $2,315 amid surging demand for the US Dollar ahead of key US data releases. Expectations of prolonged interest rate hikes by the Federal Reserve and easing tensions in the Middle East have diverted investor interest away from the safe-haven metal. Traders await cues from the upcoming FOMC meeting and the US Nonfarm Payrolls report for near-term direction. Silver prices also fell sharply to a three-week low near $26.70, influenced by rising US Treasury yields and anticipation of the Fed’s policy stance. Meanwhile, Western Texas Intermediate (WTI) crude oil prices hovered below $82.50 amidst ongoing peace talks between Israel and Hamas and expectations of sustained interest rates by the Fed.

Markets In Focus Today – GOLD

Gold price slides to $2,315 level, multi-day low amid notable USD demand ahead of US data.

Gold price (XAU/USD) extends its steady intraday descent through the first half of the European session on Tuesday and drops to a multi-day low, around the $2,315 region in the last hour. The US Dollar (USD) regains positive traction and reverses the previous day’s slide back closer to a two-week low touched on Friday amid growing acceptance that the Federal Reserve (Fed) will keep rates higher for longer amis sticky inflation. This, along with easing geopolitical tensions in the Middle East, turn out to be key factors driving flows away from the safe-haven precious metal. The downside for the Gold price, however, seems cushioned as traders might refrain from placing aggressive directional bets ahead of the crucial two-day FOMC meeting starting this Tuesday. Apart from this, the US Nonfarm Payrolls (NFP) report should provide cues about the Fed’s rate-cut path, which, in turn, will drive the USD demand and determine the near-term trajectory for the non-yielding yellow metal. In the meantime, Tuesday’s release of the Chicago PMI and the Conference Board’s US Consumer Confidence Index might provide some impetus to the XAU/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2332.9630 | Negative Crossover | Bearish
  • MA 20 : 2318.4624 | Negative Crossover | Bearish
  • MA 50 : 2242.3056 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2340.9290 | Negative Crossover | Bearish
  • MA 20 : 2341.5784 | Negative Crossover | Bearish
  • MA 50 : 2221.7521 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.4604 | Buy Zone | Bullish

Stochastic   Oscillator : 26.0206 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 2244.9097 R2 : 2291.4069
  • S1 : 2094.3849 S2 : 2047.8877

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2323.10 | Take Profit : 2300.65 | Stop Loss : 2341.15

SILVER

XAG/USD falls to three-week low near $26.70 with eyes on Fed policy meet.

Silver price tumbles to $26.70 as US yields rise ahead of Fed policy.The Fed is expected to keep interest rates steady with hawkish guidance.Investors should be prepared for high volatility this week, as the US NFP will follow the Fed’s policy.Silver price (XAG/USD) drops to near three-week low of $26.70 in Tuesday’s European session. The white metal faces a sharp sell-off after breaking below the crucial support of $27.00. The asset faces pressure as the US Treasury yields rise amid caution ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. 10-year US Treasury yields rise to 4.63% on expectations that the Fed will maintain a hawkish narrative. Higher yields on interest-bearing assets increase the opportunity cost of holding investments in non-yielding assets, such as Silver. Investors will also watch whether the Fed remains committed to its three rate-cut projections this year. Doubts over the Fed’s three rate-cut projections that were shown in March’s dot plot have emerged due to United States inflation remaining stubbornly higher in the first quarter.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 27.10 | Negative Crossover | Bearish
  • MA 20 : 27.30 | Negative Crossover | Bearish
  • MA 50 : 27.36 | Negative Crossover | Bearish

Simple :

  • MA 10 : 27.20 | Negative Crossover | Bearish
  • MA 20 : 27.21 | Negative Crossover | Bearish
  • MA 50 : 27.86 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 33.72 | Sell Zone | Bearish

Stochastic   Oscillator : 7.32 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 26.98 R2 : 28.71
  • S1 : 25.80 S2 : 24.27

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 26.44 | Take Profit : 24.98 | Stop Loss : 27.51

CRUDE OIL

WTI remains on the defensive below $82.50 amid Israel-Hamas peace talks, Fed rate cut expectations.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $82.20 on Tuesday. The black gold edges lower as ceasefire talks between Israel and Hamas in Cairo alleviated the fear of a broader conflict in the Middle East. The most recent ceasefire proposal appears to include major compromises from Israel, which is under pressure over the fate of the captives and faces worldwide criticism over the humanitarian crisis its war has caused in Gaza, per the Guardian. A successful ceasefire negotiation might mitigate the geopolitical risk premium built into oil prices. Additionally, the recent US inflation data and hawkish stance from the US Federal Reserve (Fed) dimmed the prospect of imminent interest rate cuts, which caps the upside of black gold. The US Fed is expected to hold rates steady in its current 5.25%–5.50% range on Wednesday. Chair Jerome Powell’s press conference will also be a closely watched event, as it might provide insights into the Fed’s stance on interest rate adjustments. The ‘higher-for-longer’ interest rates narrative might lift the US Dollar (USD) and exert some selling pressure on the USD-denominated oil .

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 83.3456 | Negative Crossover | Bearish
  • MA 20 : 83.4395 | Negative Crossover | Bearish
  • MA 50 : 81.8916 | Positive Crossover | Bullish

Simple :

  • MA 10 : 82.9890 | Negative Crossover | Bearish
  • MA 20 : 84.4484 | Negative Crossover | Bearish
  • MA 50 : 81.7799 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 48.5692 | Buy Zone | Bullish

Stochastic   Oscillator : 34.3661 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 83.9547 R2 : 85.6260
  • S1 : 78.5440 S2 : 76.8727

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 83.67 | Take Profit : 80.96 | Stop Loss : 85.52

NATURAL GAS

Natural Gas Freeport LNG Resumption Brightens Outlook.

U.S. natural gas futures edged higher on the New York Mercantile Exchange, attempting to stabilize after last week’s sharp decline, which saw prices plummet to their lowest since late March. This modest rebound came as the market grappled with softer production levels and the prospect of stronger export demand.A marked downturn in prices last week was notably influenced by a decrease in feedgas deliveries to Freeport LNG’s Texas export terminal, tipping the market towards a supply-heavy situation.The U.S. and European markets felt the impact of recurring disruptions at Freeport LNG, which contributed to the downward price pressure. The short-term outlook for the U.S. natural gas market continues to be bearish, driven by an excess in both storage and production.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.7898 | Positive Crossover | Bullish
  • MA 20 : 1.7641 | Positive Crossover | Bullish
  • MA 50 : 1.8219 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.7821 | Positive Crossover | Bullish
  • MA 20 : 1.7506 | Positive Crossover | Bullish
  • MA 50 : 1.7423 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 58.4502 | Buy Zone | Bullish

Stochastic   Oscillator : 73.5088 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.8789 R2 : 1.9741
  • S1 : 1.5711 S2 : 1.4759

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.95 | Take Profit : 2.22 | Stop Loss : 1.78

Elsewhere In The Commodity Market

Gold down (0.96%) at 2313.06, Silver down (2.06%) at 26.59, Palladium down (2.16%) at 952.47, Platinum down (1.29%) at 936.57, Brent Crude Oil up (0.16%) at 87.40, WTI Crude Oil up (0.21%) at 82.79 as of writing time.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Mar) Forecast 0.2%, Previous 0.3% at 07:00. (EUR) German Unemployment Change (Apr) Forecast 7K, Previous 4K at 13:25. (EUR) German GDP (QoQ) (Q1) Forecast 0.1%, Previous 0.6% at 13:30. (EUR) GDP (QoQ) (Q1) Forecast 0.1%, Previous 0.0% at 14:00 . (EUR) CPI (YoY) (Apr) Forecast 2.4%, Previous 2.4% at 14:00. (CAD) GDP (MoM) (Feb) Forecast 0.3%, Previous 0.6% at 18:00. (CAD) GDP (MoM) (Mar) at 18:01.