. Daily Commodity Analysis - Gold and Silver Steady on Fed Rate Cut Bets.

Daily Commodity Analysis – Gold and Silver Steady on Fed Rate Cut Bets.

Daily Commodity Analysis – Gold and Silver Steady on Fed Rate Cut Bets.

01 Jul 2024

Introduction

The price of gold is stuck in a narrow range as investors weigh upcoming US data and conflicting signals from the Federal Reserve. Bets on a rate cut in September are keeping the US dollar down, but rising bond yields are limiting gains for gold. Silver and oil prices are holding steady, with silver benefiting from rate cut expectations and oil supported by peak summer demand forecasts. Natural gas prices are flat due to high storage levels and rising production.

Markets In Focus Today – GOLD

Gold price struggles for a firm intraday direction ahead of US PMI data.

Gold price oscillates in a narrow trading band on Monday amid mixed fundamental cues.Rising bets for a September Fed rate cut weigh on the USD and lend support to the metal.Geopolitics and political uncertainty act as a tailwind, though rising bond yields cap gains. Gold price (XAU/USD) struggles to gain any meaningful traction on Monday and oscillates in a narrow trading band below the $2,330 level during the early European session. Traders seem reluctant to place aggressive directional bets amid the uncertainty over the Federal Reserve’s (Fed) rate-cut path, which, in turn, leads to subdued range-bound price action. The key US inflation data released on Friday reaffirmed market bets that the Fed will cut interest rates in September and again in December. That said, the recent hawkish comments by a slew of influential FOMC members suggested that the central bank is in no rush to cut interest rates. Meanwhile, the US Dollar (USD) is seen extending the post-US PCE corrective pullback from a two-month peak and should act as a tailwind for the Gold price.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2325.0570 | Positive Crossover | Bullish
  • MA 20 : 2328.4186 | Positive Crossover | Bullish
  • MA 50 : 2318.5979 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2327.0656 | Positive Crossover | Bullish
  • MA 20 : 2326.1389 | Positive Crossover | Bullish
  • MA 50 : 2337.1181 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 47.80 | Neutral Zone | Neutral

Stochastic   Oscillator : 46.2223 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2372.1823 R2 : 2395.9711
  • S1 : 2295.1711 S2 : 2271.3823

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2332.50 | Take Profit : 2304.70 | Stop Loss : 2351.80

SILVER

XAG/USD remains above $29.00 due to Fed’s expectations of rate cuts.

Silver price may extend its winning streak as recent inflation raises the odds of the Fed’s rate cuts.US PCE Price Index increased by 2.6% YoY in May, down from 2.7% in April.Silver may limit its upside due to demand uncertainties in China, the largest consumer of grey metal.Silver price (XAG/USD) remains stable with a positive outlook, it may extend its winning streak for the third consecutive day. The XAG/USD pair trades around $29.10 per troy ounce during early European hours on Monday. The non-yielding asset gains ground as investors assess the Federal Reserve’s (Fed) monetary policy outlook amid signs of cooling US inflation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 29.13 | Positive Crossover | Bullish
  • MA 20 : 29.23 | Negative Crossover | Bearish
  • MA 50 : 29.47 | Negative Crossover | Bearish

Simple :

  • MA 10 : 29.02 | Positive Crossover | Bullish
  • MA 20 : 29.24 | Negative Crossover | Bearish
  • MA 50 : 29.40 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 49.08 | Buy Zone | Bullish

Stochastic   Oscillator : 63.03 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 30.45 R2 : 32.27
  • S1 : 28.88 S2 : 27.20

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Stop Sell : 28.63 | Take Profit : 27.20 | Stop Loss : 29.77

CRUDE OIL

WTI sticks to gain around mid-$81.00s, below two-month high touched on Friday.

WTI regains positive traction on Monday and stalls its corrective slide from a two-month top.Forecasts of a peak summer fuel demand and OPEC+ cuts in the third quarter lend support.September Fed rate cut bets undermine the USD and further seem to benefit the commodity.West Texas Intermediate (WTI) US crude Oil prices attract some dip-buyers on the first day of a new week and remain well within the striking distance of a two-month peak touched on Friday. The commodity, however, seems confined in a familiar range held over the past two weeks or so and currently trades around mid-$81.00s, up over 0.50% for the day. Persistent geopolitical risks stemming from the ongoing conflicts in the Middle East and Ukrainian attacks on Russian refineries continue to fuel concerns about supply disruptions from the key Oil producing countries. Furthermore, expectations of a peak summer fuel consumption and OPEC+ cuts in the third quarter could lead to a global oil market supply deficit, which, in turn, is seen as a key factor acting as a tailwind for Crude Oil prices.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 80.9947 | Positive Crossover | Bullish
  • MA 20 : 80.1121 | Positive Crossover | Bullish
  • MA 50 : 79.6775 | Positive Crossover | Bullish

Simple :

  • MA 10 : 81.3534 | Positive Crossover | Bullish
  • MA 20 : 79.1630 | Positive Crossover | Bullish
  • MA 50 : 79.2773 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.6469 | Buy Zone | Bullish

Stochastic   Oscillator : 87.3330 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 82.7869 R2 : 85.2028
  • S1 : 74.9658 S2 : 72.5499

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 82.61 | Take Profit : 82.93 | Stop Loss : 79.09

NATURAL GAS

Elevated Storage, Rising Output Levels Pose Bearish Outlook.

Natural gas futures trade flat, hovering around the critical $2.55 level, with potential for a bearish move.August Nymex natural gas futures rise briefly, driven by bullish fundamentals but fail to maintain momentum.Elevated storage levels and rising production suggest a bearish outlook for natural gas prices in the short term.Given the high storage levels and rising production, the outlook for natural gas prices remains bearish in the short term. The market’s inability to break above recent highs suggests that any further cooling in weather patterns or continued production increases could drive prices below the critical $2.625 level, confirming a bearish trend. Traders should watch for a potential decline if these factors persist.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.6348 | Negative Crossover | Bearish
  • MA 20 : 2.6386 | Negative Crossover | Bearish
  • MA 50 : 2.4583 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.6827 | Negative Crossover | Bearish
  • MA 20 : 2.7120 | Negative Crossover | Bearish
  • MA 50 : 2.4111 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 44.4040 | Neutral Zone | Neutral

Stochastic   Oscillator : 3.5343 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2.8694 R2 : 3.0200
  • S1 : 2.3820 S2 : 2.2314

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2.68 | Take Profit : 2.44 | Stop Loss : 2.87

Elsewhere In The Commodity Market

Gold up (0.01%) at 2326.42, Silver up (0.24%) at 29.20, Palladium up (0.88%) at 977.70, Platinum down (0.7%) at 988.50, Brent Crude Oil up (0.44%) at 85.23, WTI Crude Oil up (0.42%) at 81.79 as of writing time.

Key Economic Events & Data Release Today:

(EUR) German Manufacturing PMI (Jun) Forecast 43.4, Previous 45.4 at 03:55. (GBP) Manufacturing PMI (Jun) Forecast 51.4, Previous 51.2 at 14:00. (EUR) German CPI (MoM) (Jun) Forecast 0.2%, Previous 0.1% at 08:00. (USD) ISM Manufacturing PMI (Jun) Forecast 49.2, Previous 48.7 at 10:00. (EUR) ECB President Lagarde Speaks at 15:00. (AUD) Retail Sales (MoM) (May) Previous 0.1% at 21:30. (AUD) RBA Meeting Minutes at 21:30.