. Daily Commodity Analysis - Gold and Silver Drop on Strong USD.

Daily Commodity Analysis – Gold and Silver Drop on Strong USD.

Daily Commodity Analysis – Gold and Silver Drop on Strong USD.

10 Jun 2024

Introduction

Gold prices are hovering near a one-month low as the US Dollar strengthens. This is due to two main factors: strong US jobs data reducing expectations of a Federal Reserve rate cut, and a report that China has stopped buying gold for its reserves. Silver is also feeling the pressure, while Oil prices rebound on speculation of a rate cut, despite concerns of a supply surplus. Natural Gas prices, however, are rising due to forecasts for a hot summer in the US.

Markets In Focus Today – GOLD

Gold price attracts some sellers near one-month low amid firmer US Dollar.

Gold edges lower near multi-week lows on Monday amid reduced Fed rate cut bets.The focus shifts to the US consumer inflation figures and the FOMC decision on Wednesday.Gold price (XAU/USD) enters a bearish consolidation phase and oscillates in a range near its lowest level in over a month, below the $2,300 mark during the early European session on Monday. The popularly known Nonfarm Payrolls (NFP) report showed that the world’s largest economy created a lot more jobs than expected in May, forcing investors to scale back their bets for a September interest rate cut by the Federal Reserve (Fed). This keeps US Treasury bond yields elevated and lifts the US Dollar (USD) to a nearly one-month high, which, in turn, is seen acting as a headwind for the non-yielding yellow metal. Furthermore, reports that the People’s Bank of China (PBoC) paused gold purchases to its reserves in May, ending a massive buying spree that ran for 18 months, further seem to undermine the Gold price. That said, a cautious market mood lends some support to the safe-haven XAU/USD and helps limit deeper losses.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2333.3369 | Negative Crossover | Bearish
  • MA 20 : 2340.7358 | Negative Crossover | Bearish
  • MA 50 : 2313.2890 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2336.4602 | Negative Crossover | Bearish
  • MA 20 : 2356.8469 | Negative Crossover | Bearish
  • MA 50 : 2342.7176 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.6737 | Neutral Zone | Neutral

Stochastic   Oscillator : 18.4285 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 2315.11 | Take Profit : 2276.15 | Stop Loss : 2347.58

SILVER

XAG/USD hovers around $29.50 after rebounding from three-week lows.

Silver price rebounds from a three-week low of $29.11 recorded on Friday.Non-yielding Silver struggled as the probability of a Fed rate cut in September decreased compared to the previous week.Rabobank suggested that the Fed may cut rates in September and December, more likely because of a deteriorating economy.Silver price recovers the previous session’s losses, trading around $29.50 per troy ounce during Monday’s Asian hours. The better-than-expected US employment data released on Friday has caused traders to delay their expectations of a Fed rate cut. This sentiment has put pressure on non-yielding assets like Silver.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 29.86 | Negative Crossover | Bearish
  • MA 20 : 30.14 | Negative Crossover | Bearish
  • MA 50 : 30.23 | Negative Crossover | Bearish

Simple :

  • MA 10 : 30.04 | Negative Crossover | Bearish
  • MA 20 : 30.09 | Negative Crossover | Bearish
  • MA 50 : 30.79 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.11 | Neutral Zone | Neutral

Stochastic   Oscillator : 14.07 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 29.79 R2 : 31.41
  • S1 : 28.46 S2 : 26.91

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 30.12 | Take Profit : 28.46 | Stop Loss : 31.23

CRUDE OIL

WTI rebounds to near $75.50 due to expectations of Fed rate cuts.

WTI price gains ground due to speculation of a Fed rate cut in September.Crude Oil prices may struggle as a strong US jobs report would bolster a hawkish stance from the Fed.Concerns about a supply surplus have grown as OPEC+ decided to reverse voluntary cuts gradually.West Texas Intermediate (WTI) Oil price recovers the previous session’s losses, trading around $75.30 per barrel during Monday’s Asian hours. This increase in crude Oil prices is largely due to speculation that the US Federal Reserve (Fed) may cut interest rates in September. Crude Oil prices may face pressure if borrowing costs remain high for an extended period, which would negatively impact Oil demand. A strong US jobs report would bolster a hawkish stance from the Federal Reserve. The CME FedWatch Tool indicates that the likelihood of a Fed rate cut in September by at least 25 basis points has decreased to nearly 48.0%, down from 54.8% a week earlier.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 75.9612 | Negative Crossover | Bearish
  • MA 20 : 77.0784 | Negative Crossover | Bearish
  • MA 50 : 78.7731 | Negative Crossover | Bearish

Simple :

  • MA 10 : 76.2419 | Negative Crossover | Bearish
  • MA 20 : 77.3652 | Negative Crossover | Bearish
  • MA 50 : 80.5925 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.4802 | Neutral Zone | Neutral

Stochastic   Oscillator : 38.0005 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 76.55 | Take Profit : 73.86 | Stop Loss : 78.47

NATURAL GAS

Nat-Gas Prices Push Higher on the Outlook for Hot US Temps.

July nat-gas prices climbed to a 2-week high and settled sharply higher. Forecasts for hotter US temperatures pushed nat-gas prices higher. The outlook for warm summer temperatures in the US is a bullish factor for nat-gas prices. Forecasts of warmer-than-normal temperatures across the U.S. drive natural gas demand, with highs reaching the mid-100s in some areas. Considering the strong weather-driven demand, possibly lingering supply issues in Europe, and increased LNG exports, the short-term outlook for natural gas futures appears bullish. Traders should monitor weather forecasts and storage report outcomes for further market direction.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.6009 | Positive Crossover | Bullish
  • MA 20 : 2.4841 | Positive Crossover | Bullish
  • MA 50 : 2.2481 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.5511 | Positive Crossover | Bullish
  • MA 20 : 2.5284 | Positive Crossover | Bullish
  • MA 50 : 2.1086 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 67.1473 | Buy Zone | Bullish

Stochastic   Oscillator : 76.5634 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2.7525 R2 : 3.0175
  • S1 : 1.8945 S2 : 1.6295

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.83 | Take Profit : 3.13 | Stop Loss : 2.64

Elsewhere In The Commodity Market

Gold up (0.01%) at 2296.26, Silver up (1.73%) at 29.66, Palladium up (0.6%) at 916.17, Platinum up (0.09%) at 974.23, Brent Crude Oil up (0.77%) at 80.07, WTI Crude Oil down (0.75%) at 75.91 as of writing time.

Key Economic Events & Data Release Today:

(JPY) GDP (QoQ) (Q1) Forecast -0.5%, Previous -0.5% at 05:20. (JPY) GDP (YoY) (Q1) Forecast –2.0% Previous 0.4% at 05:20.