. Weekly Commodity Analysis - Gold and Silver React to US NFP and Fed

Weekly Commodity Analysis – Gold and Silver React to US NFP and Fed

Weekly Commodity Analysis – Gold and Silver React to US NFP and Fed

04 May 2024

Introduction

The gold market reacted sharply to US Nonfarm Payrolls data and Federal Reserve announcements, experiencing significant volatility. Despite reaching a peak of $2,310, gold failed to surpass its previous high of $2,326 on May 2. The disappointment in Nonfarm Payrolls contributed to decreased real yields, eroding gold’s status as a safe-haven asset. Furthermore, conflicting signals from Fed officials, including Governor Bowman’s stance on rate hikes, added to market uncertainty. Meanwhile, despite a 2.40% loss, silver prices maintained an upward trend amidst geopolitical calm and revised interest rate expectations. In contrast, oil prices settled lower on Friday, marking their most significant weekly decline in three months as investors considered weak US job data and the potential timing of a Federal Reserve rate adjustment. Conversely, natural gas prices surged due to increased demand in the Middle East.

Markets In Focus Today – GOLD

Gold price waver following US NFP data, Fed officials comments.

Gold peaked at $2,310 but reversed gains, unable to surpass May 2 high of $2,326.US Nonfarm Payrolls missed expectations, leading to lower real yields and diminished safe-haven appeal for Gold.Fed officials offer mixed signals with Governor Bowman ready to hike rates.Gold erased its earlier gains on Friday after the US Bureau of Labor Statistics (BLS) revealed that Nonfarm Payrolls for April missed estimates, depicting a cooling jobs market. On the release, the golden metal edged toward its daily high of $2,310 but failed to crack May 2’s high of $2,326, exacerbating a retracement to current spot prices. The XAU/USD trades at around $2,300, virtually unchanged, down by 0.02%. Wall Street portrays an optimistic mood weighing on the safe-haven appeal of the non-yielding metal. Of note, US Treasury yields are sliding, with the 10-year benchmark note down seven basis points. US real yields, which correlate inversely with Gold prices, fell six and a half basis points from 2.219% to 2.146%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2318.3232 | Negative Crossover | Bearish
  • MA 20 : 2313.5913 | Negative Crossover | Bearish
  • MA 50 : 2248.7179 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2317.4522 | Negative Crossover | Bearish
  • MA 20 : 2340.4430 | Negative Crossover | Bearish
  • MA 50 : 2237.9531 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.3698 | Neutral Zone | Neutral

Stochastic   Oscillator : 18.9355 | 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 : 2308.30 | Take Profit : 2284.96 | Stop Loss : 2328.10

SILVER

XAG/USD test key resistance levels amid uptrends.

Silver price uptrend continued during the week despite registering losses of around 2.40%. Nevertheless, May 2’s price action forming a ‘dragonfly doji,’ a bullish candle, alongside technical indicators suggesting that the grey metal remains bullish, could pave the way for a recovery.The notable easing in geopolitical tensions and a recalibration of interest rate expectations have pressured silver prices, now more than $3.78 off the April peak. Peace efforts led by Egypt, aimed at Israel and Hamas, have sparked optimism for stability, reducing the demand for silver as a safe-haven asset. Additionally, recent communications from the Federal Reserve reflect a cautious stance on adjusting rates, influenced by higher-than-anticipated inflation data. With silver currently testing the 50-day moving average at $25.77, the market sentiment leans bearish in the near term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 26.59 | Negative Crossover | Bearish
  • MA 20 : 26.77 | Negative Crossover | Bearish
  • MA 50 : 27.05 | Negative Crossover | Bearish

Simple :

  • MA 10 : 26.50 | Positive Crossover | Bullish
  • MA 20 : 26.78 | Negative Crossover | Bearish
  • MA 50 : 27.48 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.66 | Neutral Zone | Neutral

Stochastic   Oscillator : 83.95 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 26.95 R2 : 28.21
  • S1 : 25.95 S2 : 24.96

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 26.77 | Take Profit : 25.59 | Stop Loss : 27.58

CRUDE OIL

Oil settles down on US jobs data, steepest weekly loss in 3 months.

Oil prices settled lower on Friday, and posted their steepest weekly loss in three months as investors weighed weak U.S. jobs data and possible timing of a Federal Reserve interest rate cut.Investors were concerned that higher-for-longer borrowing costs would curb economic growth in the U.S., the world’s leading oil consumer, after the Federal Reserve decided this week to hold interest rates steady.U.S. job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday, prompting traders to raise bets that the U.S. central bank will deliver its first interest rate cut this year in September. The Fed held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand. However, market players will monitor the developments surrounding geopolitical risks. Any rising tension might raise the fear of oil supply disruption in the region and boost the black gold price.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 81.0805 | Negative Crossover | Bearish
  • MA 20 : 82.1080 | Negative Crossover | Bearish
  • MA 50 : 81.4832 | Negative Crossover | Bearish

Simple :

  • MA 10 : 81.6043 | Negative Crossover | Bearish
  • MA 20 : 83.2310 | Negative Crossover | Bearish
  • MA 50 : 81.8040 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 31.7980 | Sell Zone | Bearish

Stochastic   Oscillator : 4.1063 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 85.9270 R2 : 87.5646
  • S1 : 80.6256 S2 : 78.9880

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 78.98 | Take Profit : 76.72 | Stop Loss : 80.79

NATURAL GAS

Natural Gas locks in gains and closes week off in the green.

Natural Gas price are rallying on the back of surging demand in the Middle East.Several African and Middle Eastern countries use Gas to power air conditioning. Natural Gas (XNG/USD) prices are heading, in the Nonfarm Payrolls aftermath, higher for a second consecutive day driven by a pickup in demand from the Middle East and some North African countries. The best example is Egypt, where Gas exports have already decreased to meet local demand. The need for Gas is growing because of the usage of Liquified Natural Gas (LNG) to power air conditioning units amid an ongoing heatwave w in the region. Meanwhile, the US Dollar Index (DXY) is slipping further below the 105.00 marker after the US Nonfarm Payrolls print. The number was still a positive 175,000, though looked rather bleak against the previous 315,000 and missed estimates. With the dust settling, the US Dollar traded at several nice buy-levels against the Euro and the Japanese Yen and could head into profit in the coming days and weeks.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.8168 | Positive Crossover | Bullish
  • MA 20 : 1.7829 | Positive Crossover | Bullish
  • MA 50 : 1.8227 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.8150 | Positive Crossover | Bullish
  • MA 20 : 1.7679 | Positive Crossover | Bullish
  • MA 50 : 1.7449 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.9609 | Buy Zone | Bullish

Stochastic   Oscillator : 78.5190 | Buy Zone | Positive

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 : 2.04 | Take Profit : 2.21 | Stop Loss : 1.94

Elsewhere In The Commodity Market

Gold down (0.03%) at 2301.93, Silver down (0.39%) at 26.55, Palladium up (1.16%) at 946.46, Platinum up (0.73%) at 956.41, Brent Crude Oil down (1.05%) at 82.78, WTI Crude Oil down (1.38%) at 77.93 as of writing time.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Mar) (Tuesday) (AUD) RBA Interest Rate Decision (May) (Tuesday) (AUD) RBA Rate Statement (Tuesday) (CAD) Ivey PMI (Apr) (Tuesday) (USD) Crude Oil Inventories (Wednesday) (GBP) BoE Interest Rate Decision (Apr) (Thursday) (GBP) BoE MPC Meeting Minutes (Thursday) (GBP) BoE Gov Bailey Speaks (Thursday) (USD) Initial Jobless Claims at (Thursday)