. Daily Commodity Analysis - Gold Slides, Copper Retreats, Oil Flat

Daily Commodity Analysis – Gold Slides, Copper Retreats, Oil Flat

Daily Commodity Analysis – Gold Slides, Copper Retreats, Oil Flat

23 May 2024

Introduction

Gold falls as hawkish Fed minutes dampen hopes for rate cuts. The recent hawkish tone from the Fed weighs on gold prices, while investors await US PMI data for clues on future monetary policy. Copper prices retreat on profit-taking and China worries, while oil prices hold steady after the Fed keeps its rate options open. Natural gas rebounds after a brief dip, but a near-term correction remains likely.

Markets In Focus Today – GOLD

Gold price extends the downside on Fed’s hawkish stance.

Gold price trades with a negative bias on Thursday. The hawkish stance of the FOMC minutes from last month’s meeting might cap the precious metal’s upside. Investors will focus on the first reading of US PMI data for May, due on Thursday. Gold price (XAU/USD) attracts some sellers on Wednesday. The further upside of the yellow metal might be limited, as the FOMC minutes were interpreted as significantly more hawkish than previous releases. The cautious approach of the US Fed to hold its restrictive policy for longer boosts the Greenback broadly and exerts some selling pressure on the gold price. Gold traders will closely watch the preliminary reading of the US Manufacturing and Services Purchasing Managers Index (PMI) for May. A weaker reading might trigger hope for Fed rate cuts and support gold. Additionally, geopolitical tensions, uncertainties, and sticky inflation could support the precious metal and cap the downside in the near term. Apart from this, the Chicago Fed National Activity Index, weekly Initial Jobless Claims, New Home Sales, and Fed’s Bostic will be in focus.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2378.0610 | Negative Crossover | Bearish
  • MA 20 : 2360.1525 | Negative Crossover | Bearish
  • MA 50 : 2300.5934 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2381.8495 | Negative Crossover | Bearish
  • MA 20 : 2349.7744 | Negative Crossover | Bearish
  • MA 50 : 2307.7335 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 40.81 | Neutral Zone | Neutral

Stochastic   Oscillator : 0 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2392.8718 R2 : 2440.8082
  • S1 : 2237.6882 S2 : 2189.7518

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2376.80 | Take Profit : 2336.22 | Stop Loss : 2412.52

COPPER

Copper prices slammed by profit-taking, China jitters .

Benchmark copper futures on the London Metal Exchange fell 0.4% to $10,372.50 a ton, while one-month copper futures steadied at $4.8030 a pound. Both contracts were nursing a steep fall from record highs hit at the beginning of the week. Losses in copper came as a speculative frenzy in the red metal now appeared to be stabilizing, leaving it open to profit-taking after a strong run over the past week. Concerns over China also crept back into markets, as a trade war between Washington and Beijing appeared to be heating up. This somewhat undermined optimism over recent stimulus efforts from China, although markets were also waiting to see how the measures will be executed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.92 | Positive Crossover | Bullish
  • MA 20 : 4.93 | Positive Crossover | Bullish
  • MA 50 : 4.82 | Positive Crossover | Bullish

Simple :

  • MA 10 : 4.97 | Positive Crossover | Bullish
  • MA 20 : 4.99 | Positive Crossover | Bullish
  • MA 50 : 4.97 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 41.9 | Neutral Zone | Neutral

Stochastic   Oscillator : 0.93 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 4.88 R2 : 5.14
  • S1 : 4.64 S2 : 4.45

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 4.66 | Take Profit : 4.89 | Stop Loss : 4.54

CRUDE OIL

Oil prices flat after Fed keeps interest rate options open.

Oil prices eased for a fourth straight session on Thursday after the minutes of a U.S. Federal Reserve meeting revealed discussions of a further tightening of interest rates if inflation remained sticky, a move that could hurt oil demand. Minutes released on Wednesday from the Federal Reserve’s last policy meeting showed the U.S. central bank’s response to sticky inflation would “involve maintaining” its policy rate for now but also reflected discussion of possible further hikes. Higher interest rates boost borrowing costs, crunching funds that could boost economic growth and oil demand in the world’s largest oil consuming nation. Also weighing on the market, U.S. crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimate for a 2.5 million-barrel draw.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 78.6564 | Negative Crossover | Bearish
  • MA 20 : 79.4982 | Negative Crossover | Bearish
  • MA 50 : 80.2964 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.6728 | Negative Crossover | Bearish
  • MA 20 : 79.3262 | Negative Crossover | Bearish
  • MA 50 : 81.8959 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.6664 | Sell Zone | Bearish

Stochastic   Oscillator : 17.71 | Sell Zone | Positive

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 : 78.48 | Take Profit : 76.11 | Stop Loss : 80.33

NATURAL GAS

Natural Gas Futures Back to Rally Mode.

Natural gas futures were returning to rally mode through midday trading ,shaking off a temporary stumble in the previous session as attention shifted back to summer power burns and declines in excess storage. Given the recent price action and overbought technical indicators, a near-term correction in natural gas prices is likely. Profit-taking and cooler weather forecasts are contributing to the current pullback. However, the longer-term trend remains bullish, driven by expectations of tighter supplies. Traders should prepare for potential volatility and a short-term bearish outlook while keeping an eye on fundamental factors that could influence the market’s direction.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.4843 | Positive Crossover | Bullish
  • MA 20 : 2.2792 | Positive Crossover | Bullish
  • MA 50 : 2.0629 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.4517 | Positive Crossover | Bullish
  • MA 20 : 2.1862 | Positive Crossover | Bullish
  • MA 50 : 1.9032 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 78.8912 | Buy Zone | Bullish

Stochastic   Oscillator : 98.96 | Buy Zone | Positive

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 : 2.85 | Take Profit : 3.14 | Stop Loss : 2.69

Elsewhere In The Commodity Market

Gold down (0.64%) at 2363.30, Silver down (0.99%) at 30.46, Palladium down (1.14%) at 982.69, Platinum down (0.25%) at 1032.36, Brent Crude Oil up (0.59%) at 82.13, WTI Crude Oil up (0.73%) at 77.76 as of writing time.

Key Economic Events & Data Release Today:

(EUR) German Manufacturing PMI Forecast 43.4, Previous 42.5 at 13:00. (GBP) Manufacturing PMI Forecast 49.5, Previous 49.1 at 14:00. (GBP) Service PMI Forecast 54.7, Previous 55.0 at 14:00. (USD) Initial Jobless Claims Forecast 220K, Previous 222K at 08:30. (USD) Building Permits Forecast 1.440M, Previous 1.467M at 08:30. (GBP) Manufacturing PMI (May) Forecast 50.0, Previous 51.3 at 09:45. (USD) New Home Sales (Apr) Forecast 677K, Previous 693K at 10:00.