. Daily Commodity Analysis - Gold uncertain pre-GDP, copper soars on China stimulus, oil rallies.

Daily Commodity Analysis – Gold uncertain pre-GDP, copper soars on China stimulus, oil rallies.

Daily Commodity Analysis – Gold uncertain pre-GDP, copper soars on China stimulus, oil rallies.

25 Jan 2024

Introduction

Gold prices face volatility ahead of GDP data, grappling with steep losses as U.S. economic cues and interest rate uncertainties deter traders. Meanwhile, copper gains momentum following China’s additional stimulus measures. Gold declined 0.7% on Wednesday amid anticipation of crucial U.S. GDP and inflation data, with growing expectations of a delayed Federal Reserve interest rate cut. Copper, boosted by China’s reserve requirement ratio cut, sits at a three-week high. Oil prices rise on a significant U.S. crude stock draw and optimism from China’s stimulus actions. Natural gas experiences a short-covering rally, influenced by oversold conditions and domestic supply-demand factors.

Markets In Focus Today – GOLD

Gold prices were skittish before GDP data.

Gold prices nursed steep losses on Thursday as anticipation of a barrage of U.S. economic and interest rate cues kept traders averse to the yellow metal, while copper sat on strong gains this week following more stimulus measures from China. Bullion prices had fallen 0.7% on Wednesday, largely disregarding some weakness in the dollar as anticipation of key U.S. gross domestic product (GDP) and inflation data brewed more uncertainty over interest rates. The yellow metal was battered by increasing bets that the Federal Reserve would cut interest rates later, instead of earlier this year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2024.34 | Negative Crossover | Bearish
  • MA 20 : 2029.35 | Negative Crossover | Bearish
  • MA 50 : 2019.58 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2026.81 | Negative Crossover | Bearish
  • MA 20 : 2034.64 | Negative Crossover | Bearish
  • MA 50 : 2029.01 | Negative Crossover | Bearish

RSI (Relative Strength Index): 44.54 | Neutral Zone | Neutral

Stochastic   Oscillator : 27.68 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 2127.21 R2 : 2168.19
  • S1 : 1994.53 S2 : 1953.54

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 2020.02 | Take Profit: 1988.37 | Stop Loss: 2038.34

COPPER

Copper at 3-week high as China doles out more stimulus.

Among industrial metals, copper futures expiring in March fell 0.2% to $3.8678 a pound but remained close to a three-week high hit on Wednesday. Sentiment towards the red metal was boosted by China’s central bank unexpectedly cutting its reserve requirement ratio for local banks, which is expected to release nearly $140 billion of liquidity into the economy. However, the demand outlook for copper remained uncertain, especially in the face of a potential downturn in the electric vehicle market. EV maker Tesla Inc (NASDAQ: TSLA) clocked weaker-than-expected fourth-quarter earnings and flagged weaker sales growth in 2024.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 3.85 | Positive Crossover | Bullish
  • MA 20 : 3.78 | Positive Crossover | Bullish
  • MA 50 : 3.79 | Positive Crossover | Bullish

Simple :

  • MA 10 : 3.85 | Positive Crossover | Bullish
  • MA 20 : 3.77 | Positive Crossover | Bullish
  • MA 50 : 3.79 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.12 | Buy Zone | Bullish

Stochastic   Oscillator : 90.23 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 3.88 R2 : 3.95
  • S1 : 3.81 S2 : 3.73

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 3.81 | Take Profit: 3.89 | Stop Loss: 3.76

BRENT CRUDE OIL

Oil rises on US crude stock draw, China stimulus hopes.

Oil prices rose on Thursday after data showed U.S. crude stockpiles fell more than expected last week, while the Chinese central bank’s cut in banks’ reserve ratio reinforced hopes of more stimulus measures and economic recovery. U.S. crude stockpiles tumbled by 9.2 million barrels last week, the Energy Information Administration said, more than quadruple the 2.2 million-barrel draw analysts forecast in a Reuters poll. China’s central bank announced a deep cut to bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock markets.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.34 | Positive Crossover | Bullish
  • MA 20 : 78.82 | Positive Crossover | Bullish
  • MA 50 : 79.60 | Positive Crossover | Bullish

Simple :

  • MA 10 : 79.08 | Positive Crossover | Bullish
  • MA 20 : 78.24 | Positive Crossover | Bullish
  • MA 50 : 78.56 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.43 | Buy Zone | Bullish

Stochastic   Oscillator : 90.48 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 80.60 R2 : 82.82
  • S1 : 73.40 S2 : 71.18

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 81.40 | Take Profit: 84.44 | Stop Loss: 79.46

NATURAL GAS

Natural Gas Prices Oversold Conditions Setting Early Bullish Tone

Short-covering rally and oversold conditions boost gas futures. Warmer weather impacts LNG demand. Ample storage is likely to limit natural gas price gains. U.S. natural gas futures are trading higher on Wednesday after gapping on the opening. The move is being primarily driven by a combination of short-covering and oversold technical conditions, alongside domestic supply and demand factors. The market’s upward movement is likely a short-covering rally, fueled by technical conditions that suggest an oversold market. This scenario typically leads to a temporary surge in prices as traders cover their short positions.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.61 | Positive Crossover | Bullish
  • MA 20 : 2.64 | Positive Crossover | Bullish
  • MA 50 : 2.66 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2.66 | Positive Crossover | Bullish
  • MA 20 : 2.72 | Positive Crossover | Bullish
  • MA 50 : 2.60 | Negative Crossover | Bearish

RSI (Relative Strength Index): 45.93 | Buy Zone | Bullish

Stochastic   Oscillator : 100.00 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 2.60 R2 : 2.71
  • S1 : 2.22 S2 : 2.11

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 2.73 | Take Profit: 3.04 | Stop Loss: 2.57

Elsewhere In The Commodity Market

Gold is up (0.04%) at 2014.59, Silver is up (0.78%) at 22.81, Palladium is down (0.56%) at 958.89, Platinum is up (0.87%) at 900.39, Brent Crude is up (0.89%) at 80.75, WTI Crude Oil up (0.99%) at 75.83 as of writing time.

Key Economic Events & Data Release Today:

(EUR) German Ifo Business Climate Index (Jan) Forecast 86.7, Previous 86.4 at 14:30. (EUR) ECB Interest Rate Decision (Jan) Forecast 4.50%, Previous 4.50% at 18:45. (ECB) ECB Monetary Policy Statement at 18:45. (USD) Building Permits Forecast 1.495M, Previous 1.467M at 19:00. (USD) Initial Jobless Claims Forecast 200K, Previous 187K at 19:00. (USD) GDP (QoQ) (Q4) Forecast 2.0%, Previous 4.9% at 19:00. (EUR) ECB President Lagarde Speaks at 21:30.