. Daily Commodity Analysis - Gold and Silver Steady Ahead of US CPI Data

Daily Commodity Analysis – Gold and Silver Steady Ahead of US CPI Data

Daily Commodity Analysis – Gold and Silver Steady Ahead of US CPI Data

15 May 2024

Introduction

Gold and silver tread water ahead of US inflation data. A weaker dollar lifts both metals, but potential Fed rate hikes could limit gains. Investors are watching closely for the Consumer Price Index (CPI) to gauge the Fed’s next move. Oil prices see mixed signals. Inventories drop and wildfires in Canada push prices up, but concerns about high interest rates weigh on the market. Wheat futures fall on profit-taking. Recent price gains due to frost in Russia are being trimmed as traders wait for a clearer picture on crop conditions.

Markets In Focus Today – GOLD

Gold prices steady as dollar eases before CPI test.

The gold price (XAU/USD) trades with mild positive bias on the weaker US Dollar (USD) on Wednesday. The rising gold demand from robust over-the-counter (OTC) market investments, consistent central bank purchases, and safe-haven flows amid Middle East geopolitical risk act as a tailwind for XAU/USD. Nonetheless, the Federal Reserve (Fed) officials’ hawkish remarks, including Chairman Jerome Powell’s suggestion to keep interest rates higher for longer, might drag the yellow metal lower in the near term. Later on Wednesday, the US Consumer Price Index (CPI) for April will be released, and it could offer insights into the timing of the Fed’s initial rate adjustment. Also, the Retail Sales for April will be published, and insight into consumer spending trends will be provided. The hotter-than-estimated inflation data could lead the Fed to a more aggressive stance, which boosts the Greenback and exerts some selling pressure on USD-denominated gold.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2341.5245 | Positive Crossover | Bullish
  • MA 20 : 2330.1174 | Positive Crossover | Bullish
  • MA 50 : 2274.0641 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2331.9638 | Positive Crossover | Bullish
  • MA 20 : 2333.1185 | Positive Crossover | Bullish
  • MA 50 : 2280.0749 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.4959 | Buy Zone | Bullish

Stochastic   Oscillator : 67.15 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2364.56 | Take Profit : 2391.65 | Stop Loss : 2347.88

SILVER

XAG/USD stays on sidelines around $28.60 ahead of US Inflation data.

Silver price exhibits strength amid soft US Dollar ahead of US CPI data.US consumer inflation remained stubbornly higher in the first three months of this year.US bond yields drop amid firm speculation that the Fed will pivot to policy normalization from September.Silver price (XAG/USD) trades in a confined range around $28.60 in Wednesday’s European session. The white metal clings to gains inspired by the soft US Dollar, which fell sharply despite the release of the hot United States Producer Price Index (PPI) inflation report for April. Annual PPI figures grew expectedly while monthly figures beat expectations. The US Dollar Index (DXY) dips sightly below 105.00. The appeal for dollar-denominated Silver improves due to soft Greenback. After the release of the PPI report, Federal Reserve (Fed) Jerome Powell commented that the overall data was mixed.Meanwhile, investors await the US Consumer Price Index (CPI) and monthly Retail Sales data for April, which will be published at 12:30 GMT. The economic indicators will significantly influence speculation for Fed rate cuts.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 28.40 | Positive Crossover | Bullish
  • MA 20 : 28.10 | Positive Crossover | Bullish
  • MA 50 : 27.66 | Positive Crossover | Bullish

Simple :

  • MA 10 : 28.36 | Positive Crossover | Bullish
  • MA 20 : 28.06 | Positive Crossover | Bullish
  • MA 50 : 27.38 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 70.92 | Buy Zone | Bullish

Stochastic   Oscillator : 67.36 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 28.95 R2 : 29.77
  • S1 : 28.01 S2 : 26.88

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 28.64 | Take Profit : 29.77 | Stop Loss : 28.01

CRUDE OIL

WTI edges higher to near $78.50 due to draw down in US inventories, Canada wildfires.

West Texas Intermediate (WTI) crude Oil price retraces its recent losses, trading around $78.30 per barrel during Wednesday’s Asian session. The advance of the crude Oil prices could be attributed to the latest crude Oil supply update from the American Petroleum Institute (API) released on Tuesday. API’s Weekly Statistical Bulletin (WSB) provides comprehensive data on refinery operations and the production of major petroleum products in the United States (US) and its regions. For the week ending May 10, the API Weekly Crude Oil Stock dropped 3.104 million barrels, significantly exceeding the forecasted 1.35 million-barrel decline. This sharp decrease completely offset the previous week’s gain of 0.509 million barrels. However, crude Oil prices lost ground due to higher-than-anticipated US producer prices in April, sparking concerns about the Federal Reserve (Fed) potentially maintaining elevated interest rates for an extended period. These higher interest rates can dampen economic activities in the United States, the world’s largest oil consumer, affecting Oil demand.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.1917 | Negative Crossover | Bearish
  • MA 20 : 80.2530 | Negative Crossover | Bearish
  • MA 50 : 80.7356 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.7087 | Negative Crossover | Bearish
  • MA 20 : 80.5961 | Negative Crossover | Bearish
  • MA 50 : 81.8884 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.7880 | Sell Zone | Bearish

Stochastic   Oscillator : 41.94 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 85.9330 R2 : 87.5706
  • S1 : 80.6316 S2 : 78.9940

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 78.58 | Take Profit : 77.67 | Stop Loss : 78.92

Wheat

Wheat Futures Fall as Traders Sell on Frost in Russia.

Wheat for July delivery fell 1.8% to $6.75 1/4 a bushel, on the Chicago Board of Trade on yesterday, with traders locking in profits from recent rally brought on by weekend frost damage in Russia. The wheat complex was sparking a Turnaround , as contracts were down across the three exchanges. Chicago wheat futures edged lower after hitting their highest since last July as prices faced chart resistance and traders sought a clearer picture on the impact of dry, cold weather on crops in top wheat exporter Russia. Further The USDA will release its weekly export sales report on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 675.64 | Positive Crossover | Bullish
  • MA 20 : 662.26 | Positive Crossover | Bullish
  • MA 50 : 634.16 | Positive Crossover | Bullish

Simple :

  • MA 10 : 677.52 | Positive Crossover | Bullish
  • MA 20 : 660.02 | Positive Crossover | Bullish
  • MA 50 : 628.96 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 68.68 | Buy Zone | Bullish

Stochastic   Oscillator : 42.69 | Neutral Zone | Negative

Resistance   And Support Levels :

  • R1 : 699.06 R2 : 735.08
  • S1 : 663.04 S2 : 631.30

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 657.03 | Take Profit : 699.06 | Stop Loss : 631.30

Elsewhere In The Commodity Market

Gold up (0.67%) at 2373.44, Silver up (0.86%) at 28.85, Palladium up (2.46%) at 1002.07, Platinum up (1.86%) at 1050.02, Brent Crude Oil up (0.1%) at 82.80, WTI Crude Oil up (0.14%) at 78.48 as of writing time.

Key Economic Events & Data Release Today:

(EUR) GDP (YoY) (Q1) Forecast 0.4%, Previous 0.1% at 14:30. (EUR) Industrial Production (MoM) (Mar) Forecast 0.5%, Previous 0.8% at 14:30. (USD) Core Retail Sales (MoM) (Apr) Forecast 0.2%, Previous 1.1% at 18:00. (USD) Retail Sales (MoM) (Apr) Forecast –0.4%, Previous 0.7% at 18:00. (USD) CPI (MoM) (Apr) Forecast 0.4%, Previous 0.4% at 18:00. (USD) Core CPI (MoM) (Apr) Forecast 0.3%, Previous 0.4% at 18:00. (USD) CPI (YoY) (Apr) Forecast 3.4%, Previous 3.5% at 18:00.