Weekly Commodity Analysis – Oil Dips, Gold Declines, Buying Opportunities Await Investors
01 Oct 2023
In the world of commodities, As September ends, the oil market faces uncertainties amid surging energy prices, despite a resilient U.S. economy. Long-term oil investors reaped substantial gains, largely driven by supply disruptions from major players like Saudi Arabia and Russia. However, concerns over macroeconomics and profit-taking led to a 1% dip in oil prices on the day. Meanwhile, gold experienced a challenging quarter, with the current week marking its worst performance in over two years. Despite a brief recovery, gold is poised to conclude the week at its lowest level since March. In the broader commodity market, natural gas futures saw gains but ended with a loss, while silver (XAG/USD) also faced a decline. Let’s delve into these developments in the world of commodities.
Brent Crude Oil:
Oil dips at September close but wins big on month and quarter.
On the final trading day of September, crude prices dipped due to growing concern over how the globe may manage with skyrocketing energy prices in the months to come, even if the U.S. economy and inflation appeared to have already avoided the worst effects. The month and quarter results for those who held long positions in oil were also quite profitable, mostly due to supply disruptions from Saudi Arabia and Russia. Due to macroeconomic worries and profit-taking, oil prices ended the day 1% lower, but they increased around 30% in the previous three months as OPEC+ production curbs reduced the world’s supply of crude.
Investors anticipated a probable partial government shutdown on Sunday, which top White House economic adviser Lael Brainard called a “unnecessary risk” to the country’s robust economy.
- MA 5: 92.54 | Negative Crossover | Bearish
- MA 20: 91.25 | Positive Crossover | Bullish
- MA 50: 87.74| Positive Crossover | Bullish
- MA 5: 92.62 | Negative Crossover | Bearish
- MA 20: 91.79 | Positive Crossover | Bullish
- MA 50: 87.47 | Positive Crossover | Bullish
RSI (Relative Strength Index): 57.49| Buying Zone | Bullish
Stochastic Oscillator: 18.66 | Sell Zone | Neutral
Resistance And Support Levels:
- R1: 93.43 | R2: 97.71
- S1: 91.09 | S2: 87.33
Overall Sentiment: Bullish | Market Direction: Buy
Trade Suggestion: Stop Buy: 94.59 | Take Profit: 97.71 | Stop Loss: 92.52
Gold declined second straight quarter, the worst week since 2021.
After losses that started in August and continued through September, gold prices declined for a second consecutive quarter, which is highlighted by the current week’s decline, which is the worst in more than two years.
Gold’s price did a sudden U-turn on Friday, turning negative for the day near $1,860 after a steady recovery toward $1,880. On the final day of Q3, the 10-year US T-bond yield is down more than 1% yet demand for XAU/USD is weak.
However, the price of gold is still expected to suffer significant weekly losses and conclude at its lowest level since March. Furthermore, given the fundamental context, any attempt at a recovery may still be viewed as a buying opportunity and may fizzle out quite fast. Therefore, it is more likely that any immediate market response to weaker US data will be fleeting.
- MA 5: 1865.97 | Negative Crossover | Bearish
- MA 20: 1899.37 | Negative Crossover | Bearish
- MA 50: 1913.99 | Negative Crossover | Bearish
- MA 5: 1866.80| Negative Crossover | Bearish
- MA 20: 1907.43| Negative Crossover | Bearish
- MA 50: 1912.03 | Negative Crossover | Bearish
RSI (Relative Strength Index): 20.87 | Sell Zone | Negative
Stochastic Oscillator: 0 | Sell Zone | Negative
Resistance And Support Levels:
- R1: 1884.27 | R2: 1936.27
- S1: 1843.64 | S2: 1801.39
Overall Sentiment: Bearish | Market Direction: Sell
Trade Suggestion: Stop Sell: 1832.27 | Take Profit: 1801.39 | Stop Loss: 1853.39.
Elsewhere In the Commodity Market.
While achieving weekly, monthly, and even quarterly gains, natural gas futures ended September’s final trading day with a loss as the cost of the country’s preferred fuel for interior heating and cooling approached the crucial psychologically bullish $3 level.
XAG/USD fell $1.28 during the US trading session, backsliding to $22.30.
Gold down (0.88%) at 1848.10, Silver down (1.9%) at 22.17, Palladium down (1.78%) at 1245.00, Platinum down (0.11%) at 903.50, Brent Crude Oil down (1.08%) at 92.09, WTI Crude Oil down (1.02%) at 90.77 as of writing time.
Key Economic Events & Data Release for Upcoming Week:
(USD) Fed Chair Powell Speaks (Monday).
(USD) ADP Nonfarm Employment Change (Sep) (Wednesday).
(USD) Initial Jobless Claims (Thursday).