. Daily Commodity Analysis - Natural Gas, Silver Prices Soar Amid Global Shifts.

Daily Commodity Analysis – Natural Gas, Silver Prices Soar Amid Global Shifts.

Daily Commodity Analysis – Natural Gas, Silver Prices Soar Amid Global Shifts.

31 Oct 2023

Introduction:

In the natural gas futures market, traders are showing a pattern of reduced open interest and declining trading volume, indicating a potential correction in the near term. Meanwhile, silver (XAG/USD) is making significant gains, approaching $23.40, thanks to heightened demand driven by Middle East tensions. This volatile landscape is underscored by geopolitical events and the potential for an Inverted Head and Shoulder chart pattern to trigger a bullish reversal in silver. Additionally, in the broader commodity market, we see gold prices dipping below $2,000 amid growing Fed concerns, while oil is on the rise, offsetting weak China data due to supply worries.

Natural Gas:

Natural gas correction is likely in the near term.

In the natural gas futures market, according to preliminary data from CME Group, traders reduced their open interest positions for the second consecutive session on Friday, this time by approximately 1.1K contracts. Similarly, trading volume decreased by about 139.3K contracts, continuing the downward trend that had briefly paused in the previous trading day.

On Friday, natural gas prices surged above $3.60, marking their highest level since mid-January. It’s important to note that this significant increase occurred alongside declining open interest and trading volume, which suggests a potential corrective movement in the short term. Nevertheless, given the current high volatility, it’s worth considering the possibility of a retest of the $4.00 range in the near future.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.356| Positive Crossover | Bullish
  • MA 20: 3.276| Positive Crossover | Bullish
  • MA 50: 3.225| Positive Crossover | Bullish

Simple:

  • MA 5: 3.339| Positive Crossover | Bullish
  • MA 20: 3.362| Positive Crossover | Bullish
  • MA 50: 3.218| Positive Crossover | Bullish

RSI (Relative Strength Index): 56.58 | Buy Zone | Bullish

Stochastic Oscillator: 8.76| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 3.380 | R2: 3.639
  • S1: 3.208| S2: 2.974

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 3.448 | Take Profit: 3.639 | Stop Loss: 3.325.

Silver:

XAG/USD jumps to close to $23.40 amid geopolitical tensions, Fed grabs the spotlight.

The price of silver is approaching $23.40, driven by increased safe-haven demand due to rising tensions in the Middle East.

The United States is persistently encouraging Israel to postpone any ground attack, as it could negatively impact ongoing hostage negotiations.

Notably, the silver price is currently shaping an Inverted Head and Shoulder chart pattern, with a breakout of this pattern potentially leading to a bullish reversal.

The price of silver (XAG/USD) has risen above the $23.00 mark, following a significant recovery, mainly driven by the ongoing conflicts between Israel and Palestine, which are fuelling demand for safe-haven assets. Anticipations of Iran’s potential involvement, due to an escalation in Israeli army ground assaults in Gaza, are likely to further heighten Middle East tensions, potentially leading to more upward movement for the white metal.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 23.19 | Negative Crossover | Bearish
  • MA 20: 23.05 | Positive Crossover | Bullish
  • MA 50: 22.84 | Positive Crossover | Bullish

Simple:

  • MA 5: 23.23 | Negative Crossover | Bearish
  • MA 20: 22.99 | Positive Crossover | Bullish
  • MA 50: 22.84 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.40 | Buy Zone | Bullish

Stochastic Oscillator: 66.1| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 23.27 | R2: 24.35
  • S1: 22.50| S2: 21.61

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy : 23.46 | Take Profit: 24.35 | Stop Loss: 22.92.

Elsewhere In the Commodity Market.

Gold price dip below $2,000 as Fed jitters grow, Middle East fears decline. Oil rises as supply concerns offset weak China data.

Gold up (0.4%) at 1996.53, Silver down (0.5%) at 23.17, Palladium down (0.11%) at 1124.50, Platinum up (0.86%) at 935.72, Brent Crude Oil up (0.81%) at 87.19, WTI Crude Oil up (0.95%) at 83.10 as of writing time.

Key Economic Events & Data Release Today:

(CNY) Manufacturing PMI (Oct) Actual 49.5, Forecast 50.2, Previous 50.2 at 07:00.

(JPY) BoJ Monetary Policy Statement at 08:00.

(EUR) GDP (QoQ) (Q3) Forecast 0.0%, Previous 0.1% at 15:30.

(CAD) GDP (MoM) (Aug) Forecast 0.1%, Previous 0.0% at 18:00.

(USD) CB Consumer Confidence (Oct) Forecast 100.0, Previous 103.0 at 19:30.