. Weekly Commodity Analysis - Gold falters, Silver dips, Oil up.

Weekly Commodity Analysis – Gold falters, Silver dips, Oil up.

Weekly Commodity Analysis – Gold falters, Silver dips, Oil up.

27 Apr 2024

Introduction

Gold ends its five-week winning streak, but its bullish momentum remains intact. Despite losses earlier this week due to easing Middle East tensions, factors like central bank demand and a reversal in gold exchange-traded fund outflows are likely to sustain its upward trajectory. Meanwhile, silver faces downward pressure from a stronger US Dollar and warmer-than-expected US inflation data. Oil prices rise on Middle East tensions, while natural gas holds steady amidst rising demand in Europe.

Markets In Focus Today – GOLD

Gold snaps a five-week win streak, but the bull run is not over yet.

Gold snapped a five-week winning streak Friday, but the yellow metal’s bullish run likely isn’t over yet as tailwinds including central bank demand have more room to go just as the tide of outflows from gold exchange-traded funds are starting to turn. Gold prices rose 0.3% to $2,348.75, but took heavy losses earlier this week following easing Middle East tensions after Iran-Israel showed little appetite to escalate their tit-for-tat exchange. The strength in the demand for the yellow metal has provided it with extra clout to withstand the weight of rising real interest rates, which have a long history of hampering investor appetite for non-interest-bearing assets like gold. Central bank purchases of bullion, led by the People’s Bank of China, demand for safe havens amid rising geopolitical tensions, and growing demand for an inflation hedge have helped keep gold on the up, and up.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2338.4058 | Negative Crossover | Bearish
  • MA 20 : 2317.5640 | Positive Crossover | Bullish
  • MA 50 : 2235.5954 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2352.8106 | Negative Crossover | Bearish
  • MA 20 : 2335.7728 | Positive Crossover | Bullish
  • MA 50 : 2209.6693 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.6656 | Buy Zone | Bullish

Stochastic   Oscillator : 87.94 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 2244.9097 R2 : 2291.4069
  • S1 : 2094.3849 S2 : 2047.8877

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 2329.28 | Take Profit: 2364.6 | Stop Loss: 2311.16

SILVER

XAG/USD dips amid strong US Dollar, warmer inflation.

Silver’s price dropped 0.79% after hitting a daily high of $27.73, as another inflation report in the United States showed warmer-than-expected inflation. The grey metal failed to capitalize on the fall in US Treasury yields, courtesy of a stronger US Dollar. At the time of writing, the XAG/USD trades at $27.20. The annual underlying inflation data rose by 2.7% from the estimates of 2.6% but decelerated from the prior reading of 2.8%. On a month-on-month basis, price pressures grew in line with expectations and the prior reading of 0.3%. Price pressures remain higher fuel expectations for the Federal Reserve (Fed) to maintain a hawkish monetary policy framework. The scenario is favorable for the US Dollar and bond yields but weighs on non-yielding assets, such as Silver. The US Dollar Index (DXY) rebounds from 105.40 amid expectations that the Fed will keep interest rates higher for a longer period. The Fed sees rate cuts appropriate only when they get evidence that inflation will return to the desired rate of 2%. 10-year US Treasury yields are down 1.15% to 4.65%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 27.37 | Negative Crossover | Bearish
  • MA 20 : 27.52 | Negative Crossover | Bearish
  • MA 50 : 27.44 | Negative Crossover | Bearish

Simple :

  • MA 10 : 27.34 | Negative Crossover | Bearish
  • MA 20 : 27.55 | Negative Crossover | Bearish
  • MA 50 : 27.93 | Negative Crossover | Bearish

RSI (Relative Strength Index): 42.68 | Neutral Zone | Neutral

Stochastic   Oscillator : 66.92 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 28.11 R2 : 29.79
  • S1 : 26.66 S2 : 25.23

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 27.73 | Take Profit: 26.24 | Stop Loss: 28.74

CRUDE OIL

Oil settles higher on supply concerns in the Mideast, economic woes subdue gains.

Oil prices settled higher on Friday, garnering support from tensions in the Middle East, but a strong dollar and U.S. inflation data quashed hopes that the Federal Reserve would cut interest rates soon, giving prices a ceiling. Supply concerns supported prices as tensions continued in the Middle East. The geopolitical element is not over, the proxy battles going on right now will continue,” and this is still providing support and helping to offset the negative pressure from the inflationary data. In contrast, US consumer prices have shown resilience, with the Personal Consumption Expenditures (QoQ) Price Index for Q1 increasing at a 3.7% annual rate. This exceeded both market expectations of 3.4% and the previous reading of 2.0%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 83.6091 | Positive Crossover | Bullish
  • MA 20 : 83.5795 | Positive Crossover | Bullish
  • MA 50 : 81.8155 | Positive Crossover | Bullish

Simple :

  • MA 10 : 83.5203 | Positive Crossover | Bullish
  • MA 20 : 84.6384 | Negative Crossover | Bearish
  • MA 50 : 81.6376 | Positive Crossover | Bullish

RSI (Relative Strength Index): 51.8978 | Buy Zone | Bullish

Stochastic   Oscillator : 83.62 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 83.9547 R2 : 85.6260
  • S1 : 78.5440 S2 : 76.8727

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 83.39 | Take Profit: 86.02 | Stop Loss: 82.02

NATURAL GAS

Natural Gas is steady with the summer season facing an ample amount of demand.

Natural Gas (XNG/USD) prices are holding ground above $2.00 on Friday after a brief dip earlier this week. Gas prices are quickly recovering as mainland Europe is gearing up for the next heating season, with traders starting to negotiate contracts to refuel ahead of next winter. Even though European Gas reserves are still at 61%, traders are issuing concerns that the volume of pre-agreed contracts is too little to get strategic reserves back to their near-full levels seen last September, which means more short-term and more expensive handling could occur. Meanwhile, the US Dollar Index (DXY), is in the green and is entering a calm patch for the end of this week. Despite the uptick for this Friday, the move will not be enough to avoid a negative weekly performance for the DXY for the second week in a row. The retreat comes with current economic numbers pointing to rather stagflation than US exceptionalism. More data though is needed to confirm the one or the other.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.7504 | Negative Crossover | Bearish
  • MA 20 : 1.7409 | Negative Crossover | Bearish
  • MA 50 : 1.8181 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.7362 | Negative Crossover | Bearish
  • MA 20 : 1.7375 | Negative Crossover | Bearish
  • MA 50 : 1.7327 | Negative Crossover | Bearish

RSI (Relative Strength Index): 47.7051 | Buy Zone | Bullish

Stochastic   Oscillator : 5 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.8789 R2 : 1.9741
  • S1 : 1.5711 S2 : 1.4759

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.92 | Take Profit: 1.63 | Stop Loss: 2.11

Elsewhere In The Commodity Market

Gold is up (0.27%) at 2337.91, Silver is down (0.8%) at 27.20, Palladium is down (2.94%) at 954.06, Platinum is up (0.39%) at 910.50, Brent Crude Oil is up (0.08%) at 87.88, WTI Crude Oil down (0.11%) at 83.64 as of writing time.

Key Economic Events & Data Release Today:

(EUR) German CPI (MoM) (Apr) (Monday) AUD) Retail Sales (MoM) (Mar) (Tuesday) (EUR) German Unemployment Change (Apr) (Tuesday) (EUR) German GDP (QoQ) (Q1) (Tuesday) (EUR) CPI (YoY) (Apr) (Tuesday) (CAD) GDP (MoM) (Mar) (Tuesday) (USD) CB Consumer Confidence (Apr) (Tuesday) (NZD) Unemployment Rate (Q1) (Wednesday)