. Daily Commodity Analysis - Gold rallies on Fed rate cuts.

Daily Commodity Analysis – Gold rallies on Fed rate cuts.

Daily Commodity Analysis – Gold rallies on Fed rate cuts.

05 Jul 2024

Introduction

Gold and silver prices rally on expectations of the Federal Reserve cutting interest rates due to weakening US economic data. A stronger dollar weakens gold and silver, but this is offset by the prospect of lower rates. Oil prices fall on increased production and potential easing of tensions in the Middle East. Natural gas prices drop due to rising production and cooler weather forecasts.

Markets In Focus Today – GOLD

Gold continues to rally as investors foresee lower interest rates on the horizon.

Gold extends its positive run as the probability of the Federal Reserve lowering interest rates increases. A run of weak data from the US indicates inflationary pressures are waning, and interest rates could fall. The US Dollar weakens, adding a backwind to Gold, as counterparts in Europe strengthen on diminishing political risk. Gold (XAU/USD) rises on Friday, continuing its run of positive days as investors become increasingly optimistic the Federal Reserve (Fed) will lower interest rates sooner than previously thought, and the US Dollar (USD) softens, adding a lift to Gold which is predominantly bought and sold in Dollars. Gold trades in the $2,360s on Friday, up by more than a third of a percent on the day, as bets increase that the Fed will begin cutting interest rates as soon as its meeting in September.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2341.1827 | Positive Crossover | Bullish
  • MA 20 : 2336.5544 | Positive Crossover | Bullish
  • MA 50 : 2323.5891 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2333.9299 | Positive Crossover | Bullish
  • MA 20 : 2328.9462 | Positive Crossover | Bullish
  • MA 50 : 2339.1470 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.9865 | Buy Zone | Bullish

Stochastic   Oscillator : 86.2483 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2345.96 | Take Profit : 2388.17 | Stop Loss : 2316.73

SILVER

XAG/USD holds position above $30.50 ahead of US NFP.

Silver price receives support as weaker US data raise the odds of the Fed reducing rates in 2024.US Nonfarm Payrolls are expected to increase by 190,000 new jobs, down from the previous reading of 272,000.The potential for improvement in negotiations between Israel and Hamas may cap the upside for safe-haven Silver.Silver price (XAG/USD) recovers its recent losses, trading around $30.60 per troy ounce during the European session on Friday. Weaker economic data from the United States (US) has sparked speculation that the Federal Reserve (Fed) might consider reducing interest rates in 2024. This has provided support for non-yielding assets such as silver. Additionally, The Federal Reserve (Fed) Chair Jerome Powell turned slightly dovish on Tuesday. Powell said that the Fed is getting back on the disinflationary path. However, Powell wants to see further evidence before cutting interest rates as the US economy and the labor market remain strong, per Reuters.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 30.18 | Positive Crossover | Bullish
  • MA 20 : 29.89 | Positive Crossover | Bullish
  • MA 50 : 29.71 | Positive Crossover | Bullish

Simple :

  • MA 10 : 30.17 | Positive Crossover | Bullish
  • MA 20 : 29.65 | Positive Crossover | Bullish
  • MA 50 : 29.54 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 64.68 | Buy Zone | Bullish

Stochastic   Oscillator : 92.24 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 30.75 R2 : 32.34
  • S1 : 29.24 S2 : 27.62

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 30.71 | Take Profit : 32.08 | Stop Loss : 29.79

CRUDE OIL

WTI moves below $83.50 amid expectations of increased supply, US NFP awaited.

WTI price inches lower as recent data showed that OPEC increased production in June.Negotiations between Israel and Hamas showing potential for improvement exert downward pressure on Oil prices.US Nonfarm Payrolls are expected to add 190,000 new jobs, down from the previous reading of 272,000.West Texas Intermediate (WTI) Oil price trades around $83.50 per barrel at the time of writing. Crude Oil prices remain tepid as recent data showed that the Organization of Petroleum Exporting Countries (OPEC) increased production in June for the second consecutive month. This indicates a potential easing of tight Oil markets in the coming months, exerting downward pressure on crude Oil prices. On the geopolitical front, Israeli Prime Minister informed US President Joe Biden on Thursday that he has decided to send a delegation to resume stalled negotiations on a hostage release deal with Hamas. A source within the Israeli negotiating team said that there is a real chance of reaching an agreement after Hamas made a revised proposal regarding the terms of the deal, as reported by Reuters. This may ease the supply threat from the Middle East, putting pressure on the Oil prices.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 82.6228 | Positive Crossover | Bullish
  • MA 20 : 81.3852 | Positive Crossover | Bullish
  • MA 50 : 80.3156 | Positive Crossover | Bullish

Simple :

  • MA 10 : 82.4738 | Positive Crossover | Bullish
  • MA 20 : 81.0591 | Positive Crossover | Bullish
  • MA 50 : 79.3265 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.7466 | Buy Zone | Bullish

Stochastic   Oscillator : 91.4363 | Buy Zone | Positive

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 : 82.59 | Take Profit : 84.57 | Stop Loss : 81.35

NATURAL GAS

Natural Gas Falls to a Seven-Week Low as Forecasts See Cooler Weather for Some Big Markets.

US natural gas futures fell to $2.35/MMBtu, the lowest in seven weeks, due to increased production and oversupply. A heat wave is expected to persist through mid-July, but output in the Lower 48 states averaged 101.8 bcfd so far in July, up from June’s 100.2 bcfd. Production hit a 17-month low of 99.5 bcfd in May but higher prices in recent weeks encouraged producers like EQT and Chesapeake Energy to resume drilling.The drop comes as the National Weather Service projects that most of the central United States will be well cooler than seasonal in the 6-10 day forecast, easing cooling demand.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.4530 | Negative Crossover | Bearish
  • MA 20 : 2.5285 | Negative Crossover | Bearish
  • MA 50 : 2.4355 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2.4953 | Negative Crossover | Bearish
  • MA 20 : 2.6525 | Negative Crossover | Bearish
  • MA 50 : 2.4529 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 36.7229 | Sell Zone | Bearish

Stochastic   Oscillator : 4.3016 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 2.47 | Take Profit : 2.20 | Stop Loss : 2.67

Elsewhere In The Commodity Market

Gold up (0.4%) at 2365.97, Silver up (0.53%) at 30.54, Palladium up (1.22%) at 1029.43, Platinum up (1.22%) at 1009.04, Brent Crude Oil down (0.25%) at 87.30, WTI Crude Oil down (0.2%) at 83.88 as of writing time.

Key Economic Events & Data Release Today:

(USD) Average Hourly Index (MoM) (Jun) Forecast 0.3%, Previous 0.4% at 08:30. (USD) Nonfarm Payrolls Forecast 191K, Previous 272K at 08:30. (USD) Unemployment Rate (Jun) Forecast 4.0%, Previous 4.0% at 08:30. (CAD) Employment Change (Jun) Forecast 27.3K, Previous 26.7K at 08:30. (USD) Fed Monetary Policy Report at 11:00. (EUR) ECB President Lagarde Speaks at 13:15.