. Weekly Commodity Analysis - Gold, and Copper Navigate Market Dynamics

Weekly Commodity Analysis – Gold, and Copper Navigate Market Dynamics

Weekly Commodity Analysis – Gold, and Copper Navigate Market Dynamics

18 May 2024

Introduction

Oil prices rise on economic optimism as U.S. inflation slows and China boosts stimulus, leading to weekly gains. Natural gas futures climb on reduced storage and production, while cooler temperatures could temper demand. Gold trims gains amid tempered rate cut hopes, and copper futures rally on supply concerns and mixed economic data from China.

Markets In Focus Today – CRUDE OIL

Oil prices settle higher to wrap up weekly gain as economic data lift demand hopes.

Oil prices settled higher Friday, wrapping up the week with a win as signs of slowing U.S. inflation boosted rate cut hopes just as China rolled out more stimulus, giving a big boost to hopes for firmer demand. Both contracts ended the week with gains of between 0.9% and nearly 1%, with a bulk of gains coming after U.S. consumer inflation readings came in softer than expected. The April CPI reading battered the dollar and increased expectations that the Federal Reserve could begin trimming rates as soon as September, with looser monetary conditions boding well for crude demand. Crude markets were also grappling with mixed cues on demand this week. A bigger-than-expected draw in U.S. inventories pushed up optimism over improving demand as the travel-heavy summer season approaches.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 79.3930 | Positive Crossover | Bullish
  • MA 20 : 80.1718 | Positive Crossover | Bullish
  • MA 50 : 80.6643 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.9690 | Positive Crossover | Bullish
  • MA 20 : 80.2877 | Positive Crossover | Bullish
  • MA 50 : 81.9098 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 54.08 | Buy Zone | Bullish

Stochastic   Oscillator : 100.00 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 79.76 | Take Profit : 81.99 | Stop Loss : 78.41

NATURAL GAS

Natural Gas Traders Bracing for Volatility with Cooler Temps Forecasted.

Natural gas futures surged higher on Friday, edging closer to the key 200-day moving average at $2.769. This upward movement is fueled by reduced storage levels, lower production, and anticipated demand spikes due to localized heatwaves across the United States. Natural gas prices experienced some volatility due to weather forecast adjustments. The Commodity Weather Group’s latest predictions suggest cooler temperatures for the eastern U.S., including Texas, from May 21-25, which could reduce demand for air conditioning and thus natural gas. Given the current market conditions—reduced storage increases, lower production, and strong LNG exports—natural gas futures are likely to maintain their upward trend in the short term. However, potential cooler weather could temper this bullish outlook by reducing immediate demand for natural gas. Overall, traders should remain watchful of inventory reports and weather forecasts to manage this volatile market.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.2280 | Positive Crossover | Bullish
  • MA 20 : 2.0784 | Positive Crossover | Bullish
  • MA 50 : 1.9551 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.2074 | Positive Crossover | Bullish
  • MA 20 : 2.0112 | Positive Crossover | Bullish
  • MA 50 : 1.8256 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 77.8730 | Buy Zone | Bullish

Stochastic   Oscillator : 95.38 | Buy Zone | Neutral

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 : 2.52 | Take Profit : 2.75 | Stop Loss : 2.39

GOLD

Gold prices trim some weekly gains on tempered rate cut hopes.

Gold prices fell slightly on Friday, trimming some of their gains for the week as comments from a slew of Federal Reserve officials offered a more sobering outlook on interest rate cuts. The yellow metal had risen to nearly $2,400 an ounce this week in the immediate aftermath of some soft U.S. economic readings. But it pulled back from these levels on Thursday and Friday. Gold retreats as Fed officials downplay rate cuts, but weekly gains dueThe yellow metal fell on Thursday after a string of Fed officials cautioned against bets on immediate reductions in interest rates. The yellow metal was also in sight of a record high of above $2,430 an ounce, although it appeared unlikely the level would be met in the near-term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2361.9294 | Positive Crossover | Bullish
  • MA 20 : 2343.3900 | Positive Crossover | Bullish
  • MA 50 : 2284.0067 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2352.1917 | Positive Crossover | Bullish
  • MA 20 : 2334.9622 | Positive Crossover | Bullish
  • MA 50 : 2289.4395 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.8118 | Buy Zone | Bullish

Stochastic   Oscillator : 93.88 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2392.34 | Take Profit : 2421.34 | Stop Loss : 2376.07

COPPER

Copper mixed amid middling China cues.

Among industrial metals, one-month copper futures tumbled from two-year highs tracking middling economic data. But three-month copper futures pushed higher and were set for a stellar week as markets bet on tighter supplies and an eventual demand recovery in the coming months. Data from China on Friday painted a mixed picture of the economy. While industrial production grew more than expected, retail sales growth slowed and house prices shrank at an accelerated pace. Growth in Chinese fixed asset investment also slowed. The readings presented a muddled outlook for the world’s biggest copper importer, as it rolled out more stimulus measures to shore up growth. Three-month copper futures gained on the prospect of a demand recovery, and were up nearly 4% this week. They were also at two-year highs.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.96 | Positive Crossover | Bullish
  • MA 20 : 4.87 | Positive Crossover | Bullish
  • MA 50 : 4.71 | Positive Crossover | Bullish

Simple :

  • MA 10 : 4.97 | Positive Crossover | Bullish
  • MA 20 : 4.86 | Positive Crossover | Bullish
  • MA 50 : 4.68 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 66.8 | Buy Zone | Bullish

Stochastic   Oscillator : 31.53 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 5.11 R2 : 5.29
  • S1 : 4.87 S2 : 4.69

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 4.92 | Take Profit : 5.18 | Stop Loss : 4.77

Elsewhere In The Commodity Market

Gold up (1.6%) at 2414.50, Silver up (6.49%) at 31.49, Palladium up (1.92%) at 1008.00, Platinum up (2.22%) at 1080.50, Brent Crude Oil up (0.64%) at 83.90, WTI Crude Oil up (0.81%) at 79.46 as of writing time.

Key Economic Events & Data Release Today:

(CNY) PBoC Loan Prime Rate (May) (Monday) (AUD) RBA Meeting Minutes (Tuesday) (EUR) ECB President Lagarde Speaks (Tuesday) (USD) Fed Chair Yellen Speaks (Tuesday) (GBP) BoE Gov Bailey Speaks (Tuesday) (NZD) RBNZ Interest Rate Decision (Wednesday) (NZD) RBNZ Press Conference (Wednesday) (GBP) CPI (YoY) (Apr) (Wednesday) (USD) Existing Home Sales (Apr) (Wednesday) (USD) FOMC Meeting Minutes (Wednesday) (EUR) German Manufacturing PMI (May) (Thursday) (USD) Initial Jobless Claims (Thursday) (USD) Building Permits (Thursday) (USD) New Home Sales (Apr) (Thursday)