. Weekly Commodity Analysis - Oil Surges 4% on U.S. Sanctions; Gold Stalls.

Weekly Commodity Analysis – Oil Surges 4% on U.S. Sanctions; Gold Stalls.

Weekly Commodity Analysis – Oil Surges 4% on U.S. Sanctions; Gold Stalls.

18 Nov 2023

Introduction:

In the commodities market, Brent Crude Oil witnessed a 4% surge after a week-long selloff but marked its fourth consecutive weekly decline. The uptick was fuelled by short-covering and U.S. sanctions on Russian oil shippers. Meanwhile, Gold faced resistance from hawkish Fed speakers, and natural gas futures declined due to an unexpected storage build. Copper prices experienced fluctuations amid global economic indicators.

Brent Crude Oil:

Oil jumps 4% after week-long selloff but declines for a fourth week.

On Friday, crude oil prices surged over 4%, recovering from a four-month low witnessed in the prior session. The upswing was fuelled by investors covering short positions and bolstered by U.S. sanctions targeting certain Russian oil shippers.

A portion of the losses was mitigated following the imposition of sanctions by the U.S. this week on maritime companies and vessels involved in transporting Russian oil that exceeded the price cap set by the Group of Seven.

Nevertheless, both benchmarks concluded the week with a decrease of over 1%, marking their fourth consecutive weekly decline. This decline was primarily influenced by an increase in U.S. crude inventories and the continuation of sustained record-high production.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 80.24 | Negative Crossover | Bearish
  • MA 20: 83.25 | Negative Crossover | Bearish
  • MA 50: 85.38| Negative Crossover | Bearish

Simple:

  • MA 5: 80.64 | Negative Crossover | Bearish
  • MA 20: 83.96 | Negative Crossover | Bearish
  • MA 50: 87.75 | Negative Crossover | Bearish

RSI (Relative Strength Index): 39.77| Selling Zone | Bearish

Stochastic Oscillator: 32.1 | Sell Zone | Negative

Resistance And Support Levels:

  • R1: 83.75 | R2: 87.87
  • S1: 79.72 | S2: 75.30

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 78.62 | Take Profit: 75.30 | Stop Loss: 81.13

Gold:

XAD/USD trims gains after hawkish Fed speakers.

The XAU/USD climbed to $1,980, reaching a high of $1,995 earlier in the session. Housing data for October in the U.S. surpassed expectations. However, a resurgence in hawkish comments from Federal Reserve speakers and a rebound in U.S. yields interrupted the precious metal’s upward movement.

Experiencing a modest uptick in Friday’s session, the XAU/USD is presently at $1,980, having reached a peak of $1,995. However, the ascent was curtailed by hawkish remarks from Federal Reserve (Fed) officials, following the release of robust US housing data that prompted a slight upturn in US Treasuries.

The upward trend in gold prices is supported by declining US Treasury bond yields, although the renewed strength of the United States Dollar (USD) may impede the precious metal’s bullish momentum.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1973.06 | Positive Crossover | Bullish
  • MA 20: 1965.85| Positive Crossover | Bullish
  • MA 50: 1949.21 | Positive Crossover | Bullish

Simple:

  • MA 5: 1972.72| Positive Crossover | Bullish
  • MA 20: 1973.72| Positive Crossover | Bullish
  • MA 50: 1930.95 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.26 | Buy Zone | Bullish

Stochastic Oscillator: 67.12| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1986.52 | R2: 2026.1
  • S1: 1956.67 | S2: 1927.77

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1992.30 | Take Profit: 2026.1 | Stop Loss: 1972.08.

Elsewhere In the Commodity Market.

On Friday, the XAG/USD soared to a peak surpassing $24.00 before stabilizing around $23.70, as investors appeared to be capitalizing on profits. Despite this, the week concluded with a 6% gain for silver. Unexpected storage build leads to a decline in natural gas futures. Copper prices fluctuated throughout the week as market participants assessed a combination of global economic indicators.

Gold down (0.02%) at 1980.65, Silver down (0.08%) at 23.69, Palladium up (1.88%) at 1057.00, Platinum up (0.58%) at 898.00, Brent Crude Oil up (4.13%) at 80.62, WTI Crude Oil up (4.06%) at 75.86 as of writing time.

Key Economic Events & Data Release for Upcoming Week:

(GBP) BoE Gov Bailey Speaks (Tuesday).

(AUD) RBA Meeting Minutes (Tuesday).

(CAD) Core CPI (MoM) (Oct) (Tuesday)

(USD) Existing Home Sales (Tuesday).

(USD) FOMC Meeting Minutes (Wednesday).

(USD) Initial Jobless Claims (Wednesday).

(USD) FOMC Meeting Minutes (Thursday)

(EUR) German GDP (QOQ) (Q3) (Friday)

(EUR) ECB President Lagarde Speaks (Friday)