. Daily Commodity Analysis - Gold near multi-week lows, USD weakens

Daily Commodity Analysis – Gold near multi-week lows, USD weakens

Daily Commodity Analysis – Gold near multi-week lows, USD weakens

03 Jun 2024

Introduction

Gold struggles near multi-week lows as hopes of Fed rate cuts fade. The US dollar weakens but positive risk sentiment and Gaza ceasefire hopes cap gains. Investors await key US data and central bank meetings this week. Silver falls on similar pressures, while oil prices rise on OPEC+ output cut extension. US natural gas futures edge up on higher demand.

Markets In Focus Today – GOLD

Gold price slips near multi-week low, US PMI data looms.

Gold price (XAU/USD) struggles to gain any meaningful traction during the Asian session on Monday amid a combination of diverging forces and languishes near a three-week low touched on Friday. Growing acceptance that the Federal Reserve (Fed) will start cutting rates later this year, bolstered by signs of easing inflationary pressures in the United States (US), continues to undermine the US Dollar (USD). This, along with persistent geopolitical risks, turn out to be key factors lending some support to the safe-haven precious metal. The upside for the Gold price, however, remains capped in the wake of a generally positive risk tone and hopes for a cease-fire in Gaza. Traders also seem reluctant and prefer to wait for this week’s release of important US macro data scheduled at the beginning of a new month, including the Nonfarm Payrolls (NFP) report on Friday. Apart from this, key central bank event risks – the Bank of Canada (BoC) decision on Wednesday and the European Central Bank (ECB) meeting on Thursday – should influence the non-yielding yellow metal.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2345.4489 | Negative Crossover | Bearish
  • MA 20 : 2347.5683 | Negative Crossover | Bearish
  • MA 50 : 2309.0163 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2350.6243 | Negative Crossover | Bearish
  • MA 20 : 2356.5353 | Negative Crossover | Bearish
  • MA 50 : 2331.0953 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 46.3882 | Neutral Zone | Neutral

Stochastic   Oscillator : 9.5503 | 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 : 2336.44 | Take Profit : 2304.64 | Stop Loss : 2361.88

SILVER

XAG/USD falls to near $30.00 as Fed may maintain higher rates.

Silver price loses ground as Fed is expected to maintain higher rates for longer.Fed officials suggested maintaining a restrictive monetary policy is needed to achieve a 2% inflation target.Silver loses its appeal as Israeli Prime Minister Benjamin Netanyahu’s administration accepts the US proposal for a Gaza cease-fire.Silver price extends losses to near $30.20 per troy ounce during the European trading session on Monday. The prices of the grey metal depreciated after the US Personal Consumption Expenditure (PCE) data was released on Friday. This inflation report indicated that price pressures eased in April. The Federal Reserve (Fed) may need more time to meet its 2% inflation target since the mixed inflation statistics did not lead to a mood of a rate cut from the central bank. Higher interest rates are having a detrimental effect on non-yielding assets such as silver.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 30.77 | Negative Crossover | Bearish
  • MA 20 : 30.93 | Negative Crossover | Bearish
  • MA 50 : 30.44 | Negative Crossover | Bearish

Simple :

  • MA 10 : 30.95 | Negative Crossover | Bearish
  • MA 20 : 31.13 | Negative Crossover | Bearish
  • MA 50 : 30.68 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 41.52 | Neutral Zone | Neutral

Stochastic   Oscillator : 0.89 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 31.45 R2 : 32.60
  • S1 : 30.08 S2 : 28.39

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Stop Sell : 29.90 | Take Profit : 28.39 | Stop Loss : 31.12

CRUDE OIL

WTI trades above $77.00 as OPEC+ agreed to extend its output cuts into 2025.

West Texas Intermediate (WTI Oil price grapples to halt its three-day losing streak, trading around $77.10 per barrel during the Asian hours on Monday. Reuters reported on Sunday that the Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), agreed to extend its Oil output cuts into 2025 to support the prices amid sluggish demand growth. OPEC+ decided to prolong the cuts of 3.66 million barrels per day (bpd) until the end of 2025 and extend the cuts of 2.2 million bpd by three months until September 2024. On Friday, US Personal Consumption Expenditure (PCE) data indicated that price pressures eased in April. Despite this, the report did not prompt a rate cut from the Federal Reserve (Fed), suggesting that the central bank may need more time to achieve its inflation goals. The higher interest rates are negatively impacting the United States’s (US) economic outlook and dampening the demand for liquid Gold.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 78.1823 | Negative Crossover | Bearish
  • MA 20 : 78.8042 | Negative Crossover | Bearish
  • MA 50 : 79.7756 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.0479 | Negative Crossover | Bearish
  • MA 20 : 78.5585 | Negative Crossover | Bearish
  • MA 50 : 81.4209 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.5913 | Neutral Zone | Neutral

Stochastic   Oscillator : 29.1499 | Sell Zone | Neutral

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 : 77.65 | Take Profit : 75.54 | Stop Loss : 79.18

NATURAL GAS

US natgas prices up 1% on higher demand, rising LNG feedgas.

U.S. natural gas futures edged up about 1% on Friday on forecasts for more demand next week than previously expected and a continuing increase in the amount of gas flowing to liquefied natural gas (LNG) export plants. Keeping the price increase in check were additional signs that some drillers were starting to pull more gas out of the ground, forecasts for less demand this week than previously expected and ongoing worries about the tremendous oversupply of gas still in storage. For the month, the contract jumped 30% in May after rising 13% in April. That was the front-month’s biggest monthly increase since July 2022 when it soared about 52%. Given the current market conditions, the short-term outlook for U.S. natural gas prices remains volatile. Despite higher demand forecasts and increased LNG exports, the significant oversupply and rising production levels are likely to continue putting downward pressure on prices

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.4568 | Positive Crossover | Bullish
  • MA 20 : 2.3646 | Positive Crossover | Bullish
  • MA 50 : 2.1572 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.5212 | Negative Crossover | Bearish
  • MA 20 : 2.3955 | Positive Crossover | Bullish
  • MA 50 : 2.0089 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.9131 | Buy Zone | Bullish

Stochastic   Oscillator : 35.9785 | Sell Zone | Positive

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 : 2.63 | Take Profit : 2.90 | Stop Loss : 2.49

Elsewhere In The Commodity Market

Gold down (0.01%) at 2324.86, Silver down (0.48%) at 30.22, Palladium down (0.59%) at 910.38, Platinum down (0.85%) at 1027.29, Brent Crude Oil down (0.04%) at 81.23, WTI Crude Oil down (0.89%) at 77.12 as of writing time.

Key Economic Events & Data Release Today:

(CNY) Caixin Manufacturing PMI (May) Forecast 51.6, Previous 51.4 at 07:15. (EUR) Spanish Manufacturing PMI (May) Forecast 52.5, Previous 52.2 at 12:45. (EUR) German Manufacturing PMI (May) Forecast 45.4, Previous 42.5 at 13:25. (USD) Manufacturing PMI (May) Forecast 50.9, Previous 49.4 at 19:15. (USD) ISM Manufacturing PMI (May) Forecast 49.8, Previous 49.2 at 19:30.