. Daily Commodity Analysis - Middle East Sparks Oil & Gold Surge

Daily Commodity Analysis – Middle East Sparks Oil & Gold Surge

Daily Commodity Analysis – Middle East Sparks Oil & Gold Surge

20 Oct 2023

Introduction:

Oil prices are on the rise for a second consecutive week as concerns of the Israel-Gaza conflict potentially spreading in the Middle East intensify, posing a threat to oil supply from a major production region. Additionally, natural gas prices have been declining for seven straight sessions, while gold has reached a three-month high due to Middle East tensions and mixed signals on U.S. interest rates. Silver, on the other hand, is in positive territory for the fourth consecutive day, nearing a multi-week high.

Brent Crude Oil:

Oil set for second week of gains on Gaza contagion fears.

On Friday, oil prices continued to increase, marking a potential second consecutive week of gains. This rise is attributed to growing concerns that the Israel-Gaza conflict could escalate throughout the Middle East, potentially disrupting the supply of oil from one of the world’s leading production regions.

Both near-term futures contracts are poised to register their second weekly increase.

Additionally, oil prices receive backing from projections of an expanding deficit in the fourth quarter. This development follows the decision of leading producers Saudi Arabia and Russia to prolong supply cuts until the year’s end, coupled with reduced stockpiles, notably in the United States.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 91.42| Positive Crossover | Bullish
  • MA 20: 89.75| Positive Crossover | Bullish
  • MA 50: 89.26| Positive Crossover | Bullish

Simple:

  • MA 5: 91.19| Positive Crossover | Bullish
  • MA 20: 89.27| Positive Crossover | Bullish
  • MA 50: 88.79| Positive Crossover | Bullish

RSI (Relative Strength Index): 65.73 | Buy Zone | Bullish

Stochastic Oscillator: 100| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 92.33 | R2: 95.04
  • S1: 90.19| S2: 87.48

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 93.23 | Take Profit: 95.04 | Stop Loss: 92.16.

Gold:

Gold prices at 3-month high on Middle East tensions, mixed Fed cues.

Gold prices reached a three-month peak on Friday due to sustained safe-haven demand, driven by concerns about the Israel-Hamas conflict. Meanwhile, a somewhat mixed outlook on U.S. interest rates contributed to a pause in the dollar and Treasury yield rally.

Gold, often referred to as the yellow metal, was on the verge of marking its second consecutive week of substantial increases. Gold futures approached the $2,000 per ounce threshold as the growing concerns of a wider conflict in the Middle East boosted the demand for traditional safe-haven assets.

Gold received a boost from a decline in the dollar and Treasury yields overnight. This development followed Federal Reserve Chair Jerome Powell’s comments indicating that the recent surge in yields was exerting pressure on financial conditions, which might reduce the necessity for further actions by the Fed.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 1969.82 | Positive Crossover | Bullish
  • MA 20: 1932.62 | Positive Crossover | Bullish
  • MA 50: 1903.93 | Positive Crossover | Bullish

Simple:

  • MA 5: 1967.19 | Positive Crossover | Bullish
  • MA 20: 1929.51 | Positive Crossover | Bullish
  • MA 50: 1876.67 | Positive Crossover | Bullish

RSI (Relative Strength Index): 81.24 | Buy Zone | Bullish

Stochastic Oscillator: 100| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1984.64 | R2: 2022.44
  • S1: 1953.27| S2: 1925.92

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy : 1993.48 | Take Profit: 2022.44 | Stop Loss: 1976.59.

Elsewhere In the Commodity Market.

Natural gas prices declined for the seventh consecutive session on Thursday.
Silver has entered positive territory for the fourth consecutive day, moving closer to a multi-week high.

Gold up (0.42%) at 1981.65, Silver up (0.7%) at 23.18, Palladium down (0.67%) at 1106.00, Platinum up (0.79%) at 896.00, Brent Crude Oil up (1.19%) at 93.48, WTI Crude Oil up (1.31%) at 89.57 as of writing time.

Key Economic Events & Data Release Today:

(CAD) Core Retail Sales (MoM) (Aug) Forecast 0.0%, Previous 1.0% at 18:00.

(USD) FOMC Member Mesters Speaks at 21:45.