. Daily Commodity Analysis - Gold Soars, Oil Plunges, Coffee Rallies.

Daily Commodity Analysis – Gold Soars, Oil Plunges, Coffee Rallies.

Daily Commodity Analysis – Gold Soars, Oil Plunges, Coffee Rallies.

21 Dec 2023

Introduction

We delve into key developments shaping the financial landscape in today’s market overview. Gold prices have surged amid expectations of U.S. Federal Reserve interest rate cuts and heightened safe-haven demand. Meanwhile, oil prices retreated due to concerns over a U.S. inventory build and weakened demand, with a focus on global trade disruptions. Natural gas futures decline as weather forecasts point to reduced heating demand. Additionally, coffee futures experienced a robust rally fueled by strong speculator activity. We explore technical aspects, and trade suggestions, highlighting notable events impacting the commodity market. Let’s delve into these markets’ dynamics and explore potential trade strategies.

Markets In Focus Today – GOLD

Gold Prices Surge on Rate Cut Expectations and Safe-Haven Demand

Gold rose to $2,040/ounce, recovering from losses amid expectations of US Federal Reserve interest rate cuts and a selloff in equities. Despite Fed officials’ resistance, a 70% chance of a rate reduction in March is perceived. Investors await US GDP data and the core PCE index for guidance. UK inflation hit a two-year low, supporting a global rate-cutting trend. The Bank of Japan maintains an ultra-loose policy, and China’s People’s Bank keeps benchmark lending rates unchanged.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2025.90 | Positive Crossover | Bullish
  • MA 20 : 2017.60 | Positive Crossover | Bullish
  • MA 50 : 1990.96 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2018.17 | Positive Crossover | Bullish
  • MA 20 : 2024.60 | Positive Crossover | Bullish
  • MA 50 : 1992.02 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.74 | Neutral Zone | Neutral

Stochastic   Oscillator : 35.86 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2052.82 R2 : 2082.09
  • S1 : 1958.07 S2 : 1928.79

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 2045 | Take Profit: 2073 | Stop Loss: 20356

Crude

Oil Prices Retreat on Concerns Over U.S. Inventory Build and Demand

Oil prices declined, ending a three-day winning streak, as worries about low demand following a surprise U.S. crude inventory build outweighed concerns about global trade disruptions in the Middle East. Brent crude fell 0.3% to $79.48, and U.S. West Texas Intermediate crude dropped to $74 a barrel. Trade disruption fears had earlier boosted prices, but attention shifted back to sluggish global demand. A build in U.S. crude stocks and record domestic oil production added pressure. Despite tensions in the Red Sea, a limited impact on oil supply is expected as the majority of Middle East crude is exported via the Strait of Hormuz. Contrary to expectations, the U.S. Energy Information Administration reported a 2.9 million barrel increase in crude inventories. Analysts predict oil prices will likely remain within a range through the year-end.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 77.90 | Positive Crossover | Bullish
  • MA 20 : 78.35 | Positive Crossover | Bullish
  • MA 50 : 81.13 | Negative Crossover | Bearish

Simple :

  • MA 10 : 76.95 | Positive Crossover | Bullish
  • MA 20 : 77.88 | Positive Crossover | Bullish
  • MA 50 : 82.45 | Negative Crossover | Bearish

RSI (Relative Strength Index): 51.62 | Neutral Zone | Neutral

Stochastic   Oscillator : 73.15 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 74.23 R2 : 77.89
  • S1 : 68.45 S2 : 64.11

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 74.23 | Take Profit: 77.83 | Stop Loss: 72.90

NATURAL GAS

Natural Gas Futures Decline on Weaker Demand Outlook

Natural gas futures surrendered early gains and settled lower as updated weather forecasts indicated weak demand for heating throughout the month. The diminished demand is attributed to warmer trends expected next week, with little subfreezing air across the U.S. Natural gas for January delivery settled down 1.8% at $2.447/mmBtu, dropping from an overnight peak of $2.59. Market attention now turns to Thursday’s weekly storage report from the EIA, with expectations of a below-average 84 Bcf draw on inventories for the week ending December 15, bringing the total to 3,580 Bcf.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.34 | Negative Crossover | Bearish
  • MA 20 : 2.44 | Negative Crossover | Bearish
  • MA 50 : 2.62 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2.31 | Negative Crossover | Bearish
  • MA 20 : 2.43 | Negative Crossover | Bearish
  • MA 50 : 2.76 | Negative Crossover | Bearish

RSI (Relative Strength Index): 33.38 | Neutral Zone | Neutral

Stochastic   Oscillator : 35.43 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 3.09 R2 : 3.27
  • S1 : 2.3 S2 : 2.11

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 2.3990 | Take Profit: 2.11 | Stop Loss: 2.4566

COFFEE

Coffee Futures Rally on Strong Speculator Activity

Coffee futures witnessed a robust surge fueled by significant speculator buying. In the robusta market, March futures (RC2!) soared 4.9%, settling at $2,932/MT after reaching a 15-year high of $2,952. This upward momentum was supported by low stocks in major consuming countries and unfavorable weather conditions in Brazil’s crucial robusta-growing region. Meanwhile, March arabica coffee (KC1!) rose by 5.9%, reaching $2.024/lb, marking its highest since April. The market dynamics included slow sales in Vietnam, where the harvest is 75% complete, as farmers await potential further climbs. Additionally, strong speculator buying in the Arabica market created pressure on trading houses that typically hold short positions, possibly leading to position liquidation to avoid high-margin calls. In a separate development, European Union coffee importers are beginning to reduce purchases from small farmers in Africa and beyond in preparation for an upcoming EU law to ban goods linked to deforestation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.92 | Negative Crossover | Bearish
  • MA 20 : 80.12 | Negative Crossover | Bearish
  • MA 50 : 80.13 | Negative Crossover | Bearish

Simple :

  • MA 10 : 80.09 | Negative Crossover | Bearish
  • MA 20 : 80.26 | Negative Crossover | Bearish
  • MA 50 : 79.83 | Negative Crossover | Bearish

RSI (Relative Strength Index): 36.62 | Neutral Zone | Neutral

Stochastic   Oscillator : 0.77 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 151 R2 : 160
  • S1 : 147 S2 : 142

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 147 | Take Profit: 142 | Stop Loss: 149

Elsewhere In The Commodity Market

Crude Oil WTI: $74.33 per barrel (+0.15%) Brent Oil: $79.88 per barrel (+0.23%) Natural Gas: $2.421 per MMBtu (-1.06%) Gold: $2,047.30 per ounce (-0.02%) Silver: $24.575 per ounce (-0.23%) Copper: $3.9013 per pound (-0.12%) US Soybeans: $1,305.38 per bushel (-0.12%)

Key Economic Events & Data Release Today:

7:00PM(IST)-USD-Unemployment Claims