. Daily Commodity Analysis - Oil, and Gas Sentiments Mixed Amid Economic Data

Daily Commodity Analysis – Oil, and Gas Sentiments Mixed Amid Economic Data

Daily Commodity Analysis – Oil, and Gas Sentiments Mixed Amid Economic Data

24 May 2024

Introduction

Gold prices held steady on Friday but are on track for a steep weekly decline. This slump comes after hopes of a U.S. interest rate cut faded, boosting the dollar and dampening demand for the yellow metal. Investors are also concerned about stubbornly high inflation, which is prompting the Federal Reserve to maintain current interest rates. This shift in Fed policy is impacting other commodities as well, with silver and oil prices also facing downward pressure.

Markets In Focus Today – GOLD

Gold prices steady but head for steep weekly losses as rate cut hopes wane.

Gold prices steadied in Asian trade on Friday, but were nursing steep declines through the week as concerns over high for longer U.S. interest rates dragged the yellow metal from record highs. Rate fears pushed up the dollar and also weighed on broader metal prices. Among industrial metals, copper prices were also nursing a steep decline from record highs this week. Gold was also hit by waning safe haven demand, as the death of the Iranian President did not ramp up tensions in the Middle East as initially expected.Gold nurses steep weekly losses on rate jitters Gold was set to lose about 3.4% this week, as it plummeted from record highs hit at the beginning of the week. Safe haven demand for gold waned this week, which left the yellow metal vulnerable to headwinds from concerns over high for longer interest rates. Hawkish signals from the Federal Reserve showed policymakers growing increasingly concerned over sticky inflation, with some even open to raise rates further.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2365.7220 | Negative Crossover | Bearish
  • MA 20 : 2355.0530 | Negative Crossover | Bearish
  • MA 50 : 2300.7136 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2376.2315 | Negative Crossover | Bearish
  • MA 20 : 2347.9277 | Negative Crossover | Bearish
  • MA 50 : 2310.6405 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.0539 | Buy Zone | Bullish

Stochastic   Oscillator : 5.23 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 2392.8718 R2 : 2440.8082
  • S1 : 2237.6882 S2 : 2189.7518

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2363.82 | Take Profit : 2324.85 | Stop Loss : 2394.66

SILVER

XAG/USD finds support near $30 but remains feeble amid firm US Dollar.

Silver price steadies above $30.00 but is prone to more downside amid multiple headwinds.The US Dollar strengthens as Fed supports maintaining interest rates at their current levels for longer.Strong US economic outlook has negatively impacted Fed rate-cut prospects for September.Silver price (XAG/USD) finds temporary support near the psychological support of $30.00 in Friday’s European session after witnessing a sharp sell-off in the past two trading session. The outlook for the Silver price is still uncertain as investors are losing confidence over the Federal Reserve (Fed) returning to policy normalization in the September meeting. The CME FedWatch tool shows that the probability for rate cuts in September has reduced to 53% from 64% recorded a week ago. Diminished Fed rate-cut bets are the outcome of hawkish Fed’s commentary on interest rates and upbeat United States (US) economic outlook. Fed officials have been communicating the need to maintain interest rates at their current levels for a longer period until they get evidence that inflation will sustainably return to the desired rate of 2%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 30.73 | Negative Crossover | Bearish
  • MA 20 : 30.63 | Negative Crossover | Bearish
  • MA 50 : 29.66 | Positive Crossover | Bullish

Simple :

  • MA 10 : 30.97 | Negative Crossover | Bearish
  • MA 20 : 31.1 | Negative Crossover | Bearish
  • MA 50 : 29.28 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.97 | Buy Zone | Bullish

Stochastic   Oscillator : 5.51 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 31.19 R2 : 32.60
  • S1 : 29.53 S2 : 28.31

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 30.97 | Take Profit : 29.31 | Stop Loss : 32.15

CRUDE OIL

WTI seems vulnerable near $77 as hawkish Fed dents demand outlook.

The Oil price sets to conclude the week on a bearish note.Fed officials believe that the decline in US inflation observed in April won’t be long-lasting.OPEC members are scheduled to meet on June 1 to discuss supply policy.West Texas Intermediate (WTI), futures on NYMEX, look set to close the week on a bearish note. The Oil price has extended its losing spree for the fifth trading session on Friday. The black gold has remained under pressure for the entire week as Federal Reserve (Fed) policymakers maintain a hawkish guidance on interest rates despite an expected decline in the United States Consumer Price Index (CPI) report for April.The Fed’s hawkish outlook on interest rates is unfavorable for the Oil price. Higher interest rates reduce the flow of liquidity into the economy, which negatively influences consumer spending and factor activities and eventually impacts overall oil demand. The next trigger for the Oil price will be the OPEC meeting scheduled for June 1, during which members will discuss the supply policy. In the last meeting on April 13, oil-rich nations made no change in the current voluntary oil output cut, which is 2.2 million barrels per day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 78.1607 | Negative Crossover | Bearish
  • MA 20 : 79.1514 | Negative Crossover | Bearish
  • MA 50 : 80.1205 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.4357 | Negative Crossover | Bearish
  • MA 20 : 78.9337 | Negative Crossover | Bearish
  • MA 50 : 81.7904 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 34.4644 | Sell Zone | Bearish

Stochastic   Oscillator : 23.54 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 85.9330 R2 : 87.5706
  • S1 : 80.6316 S2 : 78.9940

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 77.65 | Take Profit : 75.47 | Stop Loss : 79.44

NATURAL GAS

Natural Gas Futures Tank Despite Bullish Fundamentals as Market Corrects.

Overbought June Nymex natural gas futures were pummeled as the market shrugged off fundamental bullishness and a miss in government storage data. Last week’s EIA report showed working gas in storage at 2,633 Bcf as of May 10, a net increase of 70 Bcf from the previous week. This level is 421 Bcf higher than the same period last year and 620 Bcf above the five-year average of 2,013 Bcf. The total working gas is well above the historical range, reflecting significant surplus. Given the robust demand forecasts, high LNG export levels, and a likely smaller-than-usual storage injection, the market outlook remains bullish. With summer approaching and consumption expected to rise, natural gas prices are likely to sustain their upward trajectory in the near term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.4925 | Positive Crossover | Bullish
  • MA 20 : 2.3020 | Positive Crossover | Bullish
  • MA 50 : 2.0805 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.4911 | Positive Crossover | Bullish
  • MA 20 : 2.2257 | Positive Crossover | Bullish
  • MA 50 : 1.9185 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 71.3330 | Buy Zone | Bullish

Stochastic   Oscillator : 1.71 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.8667 R2 : 1.9349
  • S1 : 1.6459 S2 : 1.5777

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.75 | Take Profit : 3.06 | Stop Loss : 2.57

Elsewhere In The Commodity Market

Gold up (0.47%) at 2339.86, Silver up (1.19%) at 30.48, Palladium up (0.26%) at 971.76, Platinum up (0.3%) at 1022.94, Brent Crude Oil down (0.5%) at 81.06, WTI Crude Oil down (0.41%) at 76.60 as of writing time.

Key Economic Events & Data Release Today:

(GBP) Retail Sales (MoM) (Apr) Forecast –0.5%, Previous –0.2% at 02:00. (EUR) German GDP (QoQ) (Q1) Forecast 0.2%, Previous –0.3% at 02:00. (CAD) Manufacturing Sales (MoM) Previous –2.1% at 08:30. (USD) Durable Goods Orders (MoM) (Apr) Forecast –0.9%, Previous 2.6% at 08:30. (CAD) Core Retail Sales (MoM) (Mar) Forecast –0.1%, Previous –0.1% at 08:30.