. Daily Commodity Analysis - Gold prices surge amid Fed drama

Daily Commodity Analysis – Gold prices surge amid Fed drama

Daily Commodity Analysis – Gold prices surge amid Fed drama

11 Apr 2024

Introduction

Gold price experiences modest intraday gains but lacks follow-through amid a bullish USD backdrop. Despite regaining traction, the yellow metal faces pressure from a strong US Dollar, fueled by expectations of delayed Fed interest rate cuts due to persistent inflation. Geopolitical tensions provide some support, while traders await US macro data and speeches from influential FOMC members for short-term trading cues. Meanwhile, Silver price retreats from recent highs on USD strength and reduced Fed rate cut expectations, with focus on the US Producer Price Index for further direction.

Markets In Focus Today – GOLD

Gold price sticks to modest intraday gains and lacks follow-through amid bullish USD.

Gold price (XAU/USD) regains positive traction on Thursday and reversed a part of the previous day’s hotter US CPI-inspired losses, though lacks follow-through. The US Dollar (USD) stands tall near the YTD peak touched on Wednesday and remains well support by expectations that the Federal Reserve (Fed) delay cutting interest rates in the wake of still-sticky inflation. Adding to this, the minutes of the March FOMC meeting indicated that the US central bank might keep interest rates higher for longer, which continues to underpin the USD and acts as a headwind for the non-yielding yellow metal. The downside for the Gold price, however, remains cushioned amid persistent geopolitical tensions stemming from the risk of a further escalation of conflicts in the Middle East. This, in turn, warrants some caution before confirming that the XAU/USD has formed a near-term top and positioning for any meaningful corrective decline. Market participants now look to the US macro data – Weekly Initial Jobless Claims and the Producer Price Index (PPI). Apart from this, speeches by influential FOMC members will drive the USD demand and produce short-term opportunities around the XAU/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2302.9850 | Positive Crossover | Bullish
  • MA 20 : 2255.6629 | Positive Crossover | Bullish
  • MA 50 : 2171.0609 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2304.2851 | Positive Crossover | Bullish
  • MA 20 : 2241.1890 | Positive Crossover | Bullish
  • MA 50 : 2135.8391 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 77.4427 | Buy Zone | Bullish

Stochastic   Oscillator : 88.0862 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2244.9097 R2 : 2291.4069
  • S1 : 2094.3849 S2 : 2047.8877

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2343.23 | Take Profit : 2359.65 | Stop Loss : 2333.22

SILVER

XAG/USD retreats from nearly three-year high to below $28.00.

Siver price loses momentum near $27.85 on the stronger USD on Thursday. Precious metals traders do not seem too concerned about U.S. inflation reports that came in higher than expected. Rising industrial demand and escalating geopolitical tensions in the Middle East boost the silver price. Siver price (XAG/USD) trades with mild losses around $27.85 after retracing from the fresh three-year high of $28.53 during the early European session on Thursday. The lower speculation that the Federal Reserve (Fed) will cut the interest rate in June drags the gray metal lower. Investors await the US March Producer Price Index (PPI) on Thursday for fresh impetus. Traders slashed bets on Fed interest rate cuts on Wednesday after US inflation was hotter than expectations and US President Joe Biden acknowledged that there was more work to be done to combat rising prices. The US Consumer Price Index (CPI) report in March suggested that the path of easing inflation remains extremely bumpy and the US central bank is likely to maintain the higher-for-longer rate narrative.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 27.85 | Positive Crossover | Bullish
  • MA 20 : 27.44 | Positive Crossover | Bullish
  • MA 50 : 26.41 | Positive Crossover | Bullish

Simple :

  • MA 10 : 27.95 | Positive Crossover | Bullish
  • MA 20 : 27.55 | Positive Crossover | Bullish
  • MA 50 : 26.00 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 70.42 | Buy Zone | Bearish

Stochastic   Oscillator : 15.03 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 28.26 R2 : 29.21
  • S1 : 27.32 S2 : 26.26

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 27.20 | Take Profit : 28.26 | Stop Loss : 26.53

CRUDE OIL

WTI lacks any firm intraday direction, consolidates in a range below $86.00 mark.

WTI struggles to attract any follow-through buying amid mixed fundamental cues. Concerns about the worsening Middle East act as a tailwind for the black liquid. Signs of cooling fuel demand might hold back bulls from placing aggressive bets. West Texas Intermediate (WTI) US crude Oil prices struggle to capitalize on the previous day’s goodish bounce from the $84.00 mark, or over a one-week low and oscillate in a narrow band during the Asian session on Thursday. The commodity currently trades around the $85.75-$85.80 region and remains well supported by concerns about the worsening Middle East crisis. Ceasefire talks between Israel and Hamas have yielded no agreement. Adding to this, a possible Iranian retaliation over a suspected Israeli strike on its embassy in Syria raises the risk that the Israel-Hamas war could escalate across the Middle East, putting the Oil supply at risk and acting as a tailwind for the black liquid, though a substantial rise in US Crude inventories cap the upside.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 85.2870 | Positive Crossover | Bullish
  • MA 20 : 83.7679 | Positive Crossover | Bullish
  • MA 50 : 80.8472 | Positive Crossover | Bullish

Simple :

  • MA 10 : 85.5910 | Positive Crossover | Bullish
  • MA 20 : 83.5948 | Positive Crossover | Bullish
  • MA 50 : 79.8136 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 66.0335 | Buy Zone | Bullish

Stochastic   Oscillator : 76.6079 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 83.9547 R2 : 85.6260
  • S1 : 78.5440 S2 : 76.8727

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 85.20 | Take Profit : 87.16 | Stop Loss : 84.14

CORN

Corn futures rise.

Chicago Board of Trade corn futures edged higher on Wednesday ahead of a U.S. Department of Agriculture crop report on Thursday that is expected to show a decline in domestic ending stocks. Traders adjusted positions before the release of USDA’s monthly global supply/demand data and Brazilian agency Conab’s national crop forecasts on Thursday. Traders are also monitoring conditions for U.S. corn and soy plantings that are expected to accelerate in the coming weeks. The USDA report is projected to show 2023-24 U.S. corn ending stocks fell to 2.102 billion bushels from 2.172 billion last month, according to a Reuters survey of analysts.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.2778 | Positive Crossover | Bullish
  • MA 20 : 4.2719 | Positive Crossover | Bullish
  • MA 50 : 4.3068 | Negative Crossover | Bearish

Simple :

  • MA 10 : 4.2799 | Positive Crossover | Bullish
  • MA 20 : 4.2775 | Positive Crossover | Bullish
  • MA 50 : 4.2530 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.5158 | Buy Zone | Bullish

Stochastic   Oscillator : 45.2489 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 4.3971 R2 : 4.4669
  • S1 : 4.1709 S2 : 4.1011

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 449.16 | Take Profit : 466.73 | Stop Loss : 436.62

Elsewhere In The Commodity Market

Gold up (0.26%) at 2338.42, Silver up (0.12%) at 27.94, Palladium up (0.79%) at 1058.76, Platinum up (1.23%) at 971.32, Brent Crude Oil up (0.10%) at 90.57, WTI Crude Oil down (0.12%) at 86.10 as of writing time.

Key Economic Events & Data Release Today:

(CPI) CPI (MoM) (Mar) Forecast –0.5%, Previous 1.0% at 07:00. (EUR) ECB Monetary Policy Statement at 17:45. (EUR) ECB Interest Rate Decision (Apr) Forecast 4.50%, Previous 4.50% at 17:45. (USD) PPI (MoM) (Mar) Forecast 0.3%, Previous 0.6% at 18:00. (USD) Initial Jobless Claims Forecast 216K, Previous 221K at 18:00. (ECB) ECB President Lagarde Speaks at 19:45.