. Daily Commodity Analysis - Middle East Unrest: Oil and Gold Investment Implications

Daily Commodity Analysis – Middle East Unrest: Oil and Gold Investment Implications

Daily Commodity Analysis – Middle East Unrest: Oil and Gold Investment Implications

11 Oct 2023

Introduction:

In the commodities market, Brent Crude Oil sees a modest uptick as concerns over potential supply disruptions loom large amid Middle East unrest. While Israel isn’t a major oil producer, markets fret over the escalating conflict’s impact on the already anticipated supply shortfall for the year. Saudi Arabia, a leading oil exporter, pledges to work with allies to stabilize oil markets and defuse the situation in Gaza. Meanwhile, Gold edges higher on the back of dovish Fed comments and uncertainty, with focus shifting to US PPI and FOMC Minutes.

Brent Crude Oil:

Oil ticks up on lingering worries about supply disruptions.

Wednesday saw a little increase in oil prices as investors considered the possibility of supply disruptions brought on by the unrest in the Middle East.

Although Israel is not a major producer of crude oil, markets are concerned that the conflict may intensify and affect Middle Eastern supplies, exacerbating the anticipated shortfall for the remainder of the year.

Leading oil exporter Saudi Arabia stated on Tuesday that it supports efforts to stabilise the oil markets and that it is collaborating with regional and global allies to stop the situation in Gaza and its surrounding areas from getting worse.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 86.72| Negative Crossover | Bearish
  • MA 20: 87.33 | Negative Crossover | Bearish
  • MA 50: 88.93| Negative Crossover | Bearish

Simple:

  • MA 5: 86.90 | Negative Crossover | Bearish
  • MA 20: 86.79| Negative Crossover | Bearish
  • MA 50: 90.33| Negative Crossover | Bearish

RSI (Relative Strength Index): 40.25 | Neutral Zone | Neutral

Stochastic Oscillator: 90.05| Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 88.26 | R2: 90.70
  • S1: 86.37| S2: 83.66

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 85.45 | Take Profit: 83.66 | Stop Loss: 86.75.

Gold:

Gold edges higher on Fed officials’ dovish remarks; eyes US PPI and FOMC Minutes.

On Wednesday morning during the early European session, the price of gold trades with slight intraday increases. Some assistance comes from decreased expectations of additional Fed rate hikes and global turmoil. Traders wait to make aggressive directional bets until they receive clues regarding the Fed’s next policy move.

Tuesday’s volatility in the gold market (XAU/USD) saw it oscillate between modest gains and slight losses, consolidating its robust rebound from the $1,810 region—a seven-month low reached last week. Nevertheless, the precious metal holds onto its support above $1,850 and trades with a slight upward bias throughout the first hour of Wednesday’s European session.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 1860.83 | Positive Crossover | Bullish
  • MA 20: 1848.87 | Positive Crossover | Bullish
  • MA 50: 1863.64 | Positive Crossover | Bullish

Simple:

  • MA 5: 1860.84 | Positive Crossover | Bullish
  • MA 20: 1837.25 | Positive Crossover | Bullish
  • MA 50: 1868.77 | Positive Crossover | Bullish

RSI (Relative Strength Index): 61.93 | Buy Zone | Bullish

Stochastic Oscillator: 97.38| Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 1874.94 | R2: 1903.35
  • S1: 1855.79| S2: 1823.06

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy : 1882.35 | Take Profit: 1903.35 | Stop Loss: 1866.91.

Elsewhere In the Commodity Market.

Natural gas prices continued to scale higher through the early part of European session. XAG/USD strengthens beyond $22.00 mark, over one-week high.

Gold up (0.57%) at 1870.60, Silver up (1.32%) at 22.10, Palladium up (0.3%) at 1173.00, Platinum up (0.06%) at 883.00, Brent Crude Oil down (0.37%) at 87.33, WTI Crude Oil down (0.37%) at 85.64 as of writing time.

Key Economic Events & Data Release Today:

(USD) PPI (MoM) (Sep) Forecast 0.3%, Previous 0.7% at 18:00.

(USD) FOMC Meeting Minutes at 23:30.