Introduction:

In commodity Oil prices are on the ascent, driven by mounting concerns over supply shortages in the fourth quarter and a resurgence in Chinese demand. Saudi Arabia and Russia’s continued production cuts, coupled with China’s stimulus measures and positive U.S. economic indicators, are fuelling optimism in the oil market. Meanwhile, in the world of gold, the focus shifts to the Federal Reserve meeting and the Specter of a U.S. government shutdown, with investors hedging their bets and seeking refuge in precious metals. Dive into the latest developments in Brent Crude Oil and the gold market in this comprehensive update.

Brent Crude Oil:

Oil climbs on supply concerns, recovery in Chinese demand.

On Monday, oil prices increased for a third straight session, helped by expectations for a growing supply gap in the fourth quarter as Saudi Arabia and Russia continued their production cuts as well as hope for a rebound in Chinese demand.

“China’s stimulus policy, resilient U.S. economic data, and OPEC+’s ongoing output cuts are the bullish factors that support the oil market’s upside movement,” CMC Markets (LON: CMCX) analyst Tina Teng said about a reserve ratio reduction by China’s central bank last week to boost liquidity and support its economy.

The U.S. Federal Reserve and other central banks’ choices and statements this week about interest rate plans, as well as significant economic data coming out of China, will be closely watched by traders.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 93.46 | positive Crossover | Bullish
• MA 20: 91.96 | positive Crossover | Bullish
• MA 50: 89.56 | positive Crossover | Bullish

Simple:

• MA 5: 93.60 | negative Crossover | Bearish
• MA 20: 91.78 | positive Crossover | Bullish
• MA 50: 88.78 | positive Crossover | Bullish

RSI (Relative Strength Index): 70.02 | Buying Zone | Bullish

Stochastic Oscillator: 39.63 | Sell Zone | Negative

Resistance And Support Levels: 

• R1: 93.90 | R2: 97.42
• S1: 91.49 | S2: 88.87

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 94.91 | Take Profit: 97.42 | Stop Loss: 93.20

GOLD:

With the Fed meeting, gold prices increase; the government shutdown is in focus.

Markets increased their bets on Monday that the Federal Reserve will maintain interest rates steady this week while growing concerns over a U.S. government shutdown increased demand for haven assets.

Strong inflation and economic activity data failed to persuade investors that a U.S. interest rate hike was imminent, thus the yellow metal enjoyed some gains in recent days. Gains were nonetheless constrained as the dollar surged to six-month highs in response to the data.

In addition, as senior Republican lawmakers argue over defense spending and broader fiscal budget cuts, gold prices are anticipated to experience some haven demand amid worries about a U.S. government shutdown.

Technical Overview :

Moving Averages:

Exponential:

• MA 5: 1923.98 | Positive Crossover | Bullish
• MA 20: 1919.69 | Positive Crossover | Bullish
• MA 50: 1920.91 | Positive Crossover | Bullish

Simple:

• MA 5: 1924.81 | Positive Crossover | Bullish
• MA 20: 1917.35 | Positive Crossover | Bullish
• MA 50: 1925.82 | Negative Crossover | Bullish

RSI (Relative Strength Index): 56.45 | Buy Zone | Positive

Stochastic Oscillator: 97.09| Buy Zone | Neutral

Resistance And Support Levels: 

• R1: 1930.02 | R2: 1953.12
• S1: 1911.73| S2: 1888.63

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1936.72 | Take Profit: 1953.23 | Stop Loss: 1927.74.

Elsewhere In the Commodity Market.

Among industrial metals, copper prices saw minimal movement on Monday despite fresh worries about China. After increasing by more than 2% last week, copper futures held steady at $3.7953 per pound. Silver advances for the second day in a row, though the setup warrants caution for bulls.

Gold up (0.13%) at 1925.91, Silver up (0.37%) at 23.10, Palladium up (0.2%) at 1248.00, Platinum up (0.44%) at 931.76, Brent Crude Oil up (0.05%) at 93.04, WTI Crude Oil up (0.20%) at 90.20 as of writing time.

Key Economic Events & Data Release Today:

(EUR) ECB`s Elderson Speaks at 18:00.