. Daily Commodity Analysis - Gold Faces US Inflation Pressure

Daily Commodity Analysis – Gold Faces US Inflation Pressure

Daily Commodity Analysis – Gold Faces US Inflation Pressure

13 May 2024

Introduction

Gold prices face downward pressure as U.S. inflation looms large. Following a dip triggered by bleak Consumer Sentiment data and rising inflation expectations, gold’s allure dims amidst prospects of sustained high interest rates. With traders eyeing pivotal U.S. inflation figures, gold retreated in Asian trading, despite recent gains spurred by hints of Federal Reserve rate cuts. Meanwhile, broader metal markets await cues from mixed Chinese inflation readings and evolving demand dynamics.

Markets In Focus Today – GOLD

Gold prices dip as US inflation test looms.

Gold falls after US Consumer Sentiment data shows a sharp decline in optimism and higher inflation expectations. Higher inflation could keep interest rates elevated, reducing the attractiveness of non-yielding Gold. Gold prices retreated in Asian trade on Monday, consolidating some recent gains as traders turned more biased towards the dollar ahead of key U.S. inflation data due later in the week. The yellow metal saw some strength last week as some signs of a cooling U.S. economy sparked speculation over eventual interest rate cuts by the Federal Reserve in 2024. But gold still remained well below record highs hit in April, and is expected to trade range-bound ahead of this week’s inflation data. Gold, metal markets on edge ahead of inflation data Gold and broader metal markets were on edge ahead of key U.S. inflation readings due this week.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2331.0160 | Positive Crossover | Bullish
  • MA 20 : 2323.0018 | Positive Crossover | Bullish
  • MA 50 : 2266.7507 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2320.1559 | Positive Crossover | Bullish
  • MA 20 : 2334.1025 | Positive Crossover | Bullish
  • MA 50 : 2271.1278 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.8952 | Buy Zone | Bullish

Stochastic   Oscillator : 64.5 | Buy Zone | Negative

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 : 2330.67 | Take Profit : 2337.47 | Stop Loss : 2303.73

COPPER

Copper prices edge higher amid mixed China cues .

Among industrial metals, copper prices advanced on Monday, remaining close to two-year highs amid some optimism over tighter markets. But further gains were stalled by mixed cues from top importer China. Chinese inflation data, released over the weekend, showed a pick-up in CPI inflation. But PPI inflation, which is a key indicator of local factory and business activity, shrank for a 19th consecutive month. But the mixed inflation readings were offset by Beijing loosening more restrictions on the beleaguered property sector, which could potentially support copper demand in the coming months.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.65 | Positive Crossover | Bullish
  • MA 20 : 4.61 | Positive Crossover | Bullish
  • MA 50 : 4.53 | Positive Crossover | Bullish

Simple :

  • MA 10 : 4.62 | Positive Crossover | Bullish
  • MA 20 : 4.60 | Positive Crossover | Bullish
  • MA 50 : 4.55 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 69.32 | Buy Zone | Bullish

Stochastic   Oscillator : 100 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 4.76 R2 : 4.90
  • S1 : 4.67 S2 : 4.54

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 4.69 | Take Profit : 4.76 | Stop Loss : 4.64

CRUDE OIL

WTI edges lower to near $77.50 due to uncertainties surrounding Oil demand.

WTI Oil price extended losses as Fed officials indicated higher interest rates for longer, which could dampen Oil demand.The crude Oil prices received pressure as China’s lower PPI indicated persistent sluggishness in business demand.Iraq’s Oil minister Hayan Abdul Ghani committed to the voluntary Oil production cuts agreed upon by the OPEC.West Texas Intermediate (WTI) crude Oil price have experienced a second consecutive decline, trading around $77.70 per barrel during Monday’s Asian session. This downward trend in Oil prices could be attributed to uncertainties surrounding crude Oil demand. US Federal Reserve (Fed) officials have indicated that interest rates could remain elevated for an extended period, potentially impacting growth and reducing Oil demand in the United States (US), the world’s largest Oil consumer. Moreover, Friday’s release of the US Consumer Sentiment Index added to evidence suggesting a slowdown in the economy. The index declined to 67.4 in May from April’s 77.2, hitting a six-month low and falling short of market expectations.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.4226 | Negative Crossover | Bearish
  • MA 20 : 80.5832 | Negative Crossover | Bearish
  • MA 50 : 80.8977 | Negative Crossover | Bearish

Simple :

  • MA 10 : 79.0100 | Negative Crossover | Bearish
  • MA 20 : 81.1212 | Negative Crossover | Bearish
  • MA 50 : 81.8739 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 38.4584 | Sell Zone | Bearish

Stochastic   Oscillator : 46.35 | Neutral Zone | Negative

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 : 79.04 | Take Profit : 77.23 | Stop Loss : 80.51

NATURAL GAS

Natural Gas Price Correction unfolding within an uptrend.

Natural Gas is correcting within a short-term uptrend. The RSI is giving a sell-signal further increasing the chances of a pullback evolving.The trend is expected to continue after the correction has finished. The number of active U.S. natural gas drilling rigs dropped to a 2-1/2 year low, with last week’s count down three rigs, signaling a near-term reduction in production. However, the substantial existing inventories, exacerbated by a mild winter and operational adjustments at major facilities like the Freeport LNG export terminal, have capped price gains. Despite production challenges, demand indicators show mixed signals.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.0210 | Positive Crossover | Bullish
  • MA 20 : 1.9265 | Positive Crossover | Bullish
  • MA 50 : 1.8811 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.9911 | Positive Crossover | Bullish
  • MA 20 : 1.8742 | Positive Crossover | Bullish
  • MA 50 : 1.7846 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 67.1501 | Buy Zone | Bullish

Stochastic   Oscillator : 11.86 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.22 | Take Profit : 2.49 | Stop Loss : 2.06

Elsewhere In The Commodity Market

Gold down (0.85%) at 2340.57, Silver down (0.16%) at 28.11, Palladium up (0.5%) at 981.84, Platinum up (0.51%) at 999.02, Brent Crude Oil up (0.33%) at 82.92, WTI Crude Oil down (0.39%) at 78.44 as of writing time.

Key Economic Events & Data Release Today:

(NZD) Inflation Expectations (QoQ) Previous 2.5% at 08:30. (CAD) Building Permits (MoM) (Mar) Forecast –4.6%, Previous 9.3% at 18:00. (USD) FOMC Member Mester Speaks at 18:30.