. Weekly Commodity Analysis - Global markets dance, oil dips, gold grapples.

Weekly Commodity Analysis – Global markets dance, oil dips, gold grapples.

Weekly Commodity Analysis – Global markets dance, oil dips, gold grapples.

23 Mar 2024

Introduction

Oil prices retreat on Friday, remaining stagnant for the week amid Gaza ceasefire hopes to dent crude benchmarks, while conflicts in Europe and a shrinking US rig count cushion the decline. Dollar strength further pressures crude prices, with the greenback’s gains against the euro and sterling overshadowing expectations of rate cuts by the Bank of England and the European Central Bank. Meanwhile, gold fails to capitalize on falling yields amidst a US Dollar rebound. Silver tips the top of a long-term range before reversing lower, with downside risks looming.

Markets In Focus Today – BRENT CRUDE OIL

Oil prices down on Gaza ceasefire talks, flat on the week.

Oil prices slipped on Friday and were flat on the week as the possibility of a ceasefire in Gaza weakened crude benchmarks, while the war in Europe and shrinking U.S. rig count cushioned the fall. Dollar strength also weighed on the crude prices as the greenback added to recent gains in the euro and sterling amid expectations that the Bank of England and the European Central Bank could cut rates at a faster pace than the Fed can amid stronger U.S. growth. U.S. inventories unexpectedly shrank in the week to March 15, while major members of the Organization of Petroleum Exporting Countries signaled they were reducing their oil exports.Expectations of tighter supplies were also accompanied by an improving outlook for demand, especially in the face of a stronger U.S. economy, and a potential recovery in China.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 85.1636 | Positive Crossover | Bullish
  • MA 20 : 84.2173 | Positive Crossover | Bullish
  • MA 50 : 82.6619 | Positive Crossover | Bullish

Simple :

  • MA 10 : 85.0338 | Positive Crossover | Bullish
  • MA 20 : 83.8722 | Positive Crossover | Bullish
  • MA 50 : 82.0503 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.3598 | Buy Zone | Bullish

Stochastic   Oscillator : 70.8006 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 83.8928 R2 : 85.7069
  • S1 : 78.0199 S2 : 76.2058

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 83.54 | Take Profit: 87.10 | Stop Loss: 81.55

NATURAL GAS

Natural Gas sinks over 1% with gas sellers hanging in the ropes.

Natural Gas prices were unable to break above $1.90 this week. Traders are throwing in the towel on bullish outlooks after European PMI data points to a subdued economic outlook.The US Dollar Index sprints higher with markets not buying into Fed’s soft-landing narrative. Natural Gas (XNG/USD) traded roughly flat on Friday and it is set to close off the week with a small gain on the US side. However, on the other side of the Atlantic, the European Gas market is set to close this week in the red as elevated reserves and a lackluster economic outlook in Germany push demand for Gas further down. Meanwhile, the DXY US Dollar Index, which gauges the US Dollar (USD) against a basket of six foreign currencies, is breaking above 104.00 on Friday. The mixture of China dropping the ball on its recovery, together with markets not buying into the three Fed rate cuts for 2024 is creating a cocktail in which the Greenback is winning twice.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.7050 | Negative Crossover | Bearish
  • MA 20 : 1.7536 | Negative Crossover | Bearish
  • MA 50 : 1.9616 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.6921 | Negative Crossover | Bearish
  • MA 20 : 1.7552 | Negative Crossover | Bearish
  • MA 50 : 1.9963 | Negative Crossover | Bearish

RSI (Relative Strength Index): 40.0597 | Neutral Zone | Neutral

Stochastic   Oscillator : 14.6552 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2.2088 R2 : 2.3905
  • S1 : 1.6205 S2 : 1.4388

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion : Limit Sell : 1.81 | Take Profit : 1.54 | Stop Loss : 2.01

GOLD

Gold fails to capitalize on falling yields amidst the US Dollar rebound.

Gold prices see a second day of decline, falling to $2,159 after peaking at an all-time high of $2,223.The Federal Reserve’s dovish stance on interest rates keeps US yields down, except for US Dollar.Odds for Fed rate cut in June remain above 70% via CME Fed-watch Tool.Gold prices drop for the second consecutive day on Friday after hitting an all-time high of $2,223 on Thursday. Renewed demand for the Greenback amid falling US Treasury bond yields surprised traders and weighed on the yellow metal. At the time of writing, XAU/USD trades at $2,159, losing 0.90%. The Federal Reserve’s March meeting emphasized the need for policymakers to lower interest rates despite the latest two inflation reports suggesting that it´s re-accelerating. This sponsored XAU/USD’s leg up to new all-time highs, but it was short-lived.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2161.2158 | Positive Crossover | Bullish
  • MA 20 : 2135.3268 | Positive Crossover | Bullish
  • MA 50 : 2087.6806 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2168.0102 | Negative Crossover | Bearish
  • MA 20 : 2131.5253 | Positive Crossover | Bullish
  • MA 50 : 2067.5741 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 63.9289 | Buy Zone | Bullish

Stochastic   Oscillator : 70.8639 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 2062.3465 R2 : 2081.5168
  • S1 : 2000.2868 S2 : 1981.1165

Overall Sentiment: Bullish| Market Direction: Buy

Trade Suggestion: Limit Buy: 2149.45 | Take Profit: 2185.19 | Stop Loss: 2127.83

SILVER

XAG/USD tips top of range and reverses lower.

Silver price rises and tips the top of a long-term range before reversing lower. It has formed a Bearish Japanese candlestick pattern, enhancing the reversal thesis. A move back down to a cluster of MAs in the 23.000s is foreseen subject to a continuation of the weakness. Silver price (XAG/USD) was trading $24.750s on Friday, after touching the top of a multi-month range at roughly $25.700 and reversing lower. US Dollar Index declines, was supporting silver’s upward momentum as investors digest the Fed’s dovish stance.Downside risks include a retracement towards the $25.00 support, and below.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 24.77 | Negative Crossover | Bearish
  • MA 20 : 24.43 | Positive Crossover | Bullish
  • MA 50 : 23.81 | Positive Crossover | Bullish

Simple :

  • MA 10 : 24.96 | Negative Crossover | Bearish
  • MA 20 : 24.45 | Positive Crossover | Bullish
  • MA 50 : 23.42 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.32 | Buy Zone | Bullish

Stochastic   Oscillator : 0 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 25.04 R2 : 25.90
  • S1 : 24.14 S2 : 23.34

Overall Sentiment: Bullish Market Direction : Buy

Trade Suggestion: Limit Buy: 24.01 | Take Profit: 25.21 | Stop Loss: 23.36

Elsewhere In The Commodity Market

Gold down (0.75%) at 2164.70, Silver down (0.16%) at 24.66, Palladium down (2.67%) at 983.50, Platinum down (1.65%) at 892.50, Brent Crude Oil down (0.31%) at 84.98, WTI Crude Oil down (0.31%) at 80.82 as of writing time.

Key Economic Events & Data Release Today:

(USD) Building Permits (Monday) (USD) New Home Sales (Feb) (Monday) (USD) CB Consumer Confidence (Tuesday) (USD) Crude Oil Inventories (Wednesday) (AUD) Retail Sales (MoM) (Feb) (Thursday) (GBP) GDP (QoQ) (Q4) (Thursday) (GBP) GDP (YoY) (Q4) (Thursday) (EUR) German Unemployment Change (Mar) (Thursday)