. Weekly Commodity Analysis - Red Sea tensions, gold surge, chaos unfolds.

Weekly Commodity Analysis – Red Sea tensions, gold surge, chaos unfolds.

Weekly Commodity Analysis – Red Sea tensions, gold surge, chaos unfolds.

23 Dec 2023

Introduction:

In the commodities market, Oil prices surge for a second consecutive week, driven by Red Sea tensions overshadowing Angola-led OPEC concerns. Meanwhile, gold hits over $2,060 amidst lower US yields. Silver swiftly rebounds after weak US core PCE inflation, and Natural Gas futures climb, fuelled by bullish hopes for January’s cold weather, creating a dynamic scenario in the commodity market.

Brent Crude Oil:

Oil prices experienced a second consecutive weekly increase as Red Sea tensions offset Angola-led OPEC worries.

Despite a Friday dip, oil prices secured a second consecutive weekly rise amid a volatile trading period. The market grappled with supply disruptions caused by Red Sea vessel attacks. At the same time, Angola’s departure from OPEC raised concerns about the organization’s unity and ability to rally members for future production agreements.

Concluding the day, crude prices secured a second consecutive weekly increase, driven by the potential for supply shortages. Attacks on vessels in the Red Sea by the Iran-aligned Yemeni Houthi group prompted several oil and shipping companies to avoid the area.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 78.59 | Positive Crossover | Bullish
  • MA 20: 78.31 | Positive Crossover | Bullish
  • MA 50: 80.80| Negative Crossover | Bearish

Simple:

  • MA 5: 78.89 | Positive Crossover | Bullish
  • MA 20: 77.74 | Positive Crossover | Bullish
  • MA 50: 81.87 | Negative Crossover | Bearish

RSI (Relative Strength Index): 50.13| Buy Zone | Bullish

Stochastic Oscillator: 96.09 | Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 79.40 | R2: 83.82
  • S1: 77.03| S2: 73.43

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 80.14 | Take Profit: 83.82 | Stop Loss: 78.17

Gold:

Gold surges above $2,060 as US yields push lower.

Gold price (XAU/USD) makes gains following a report from the United States Bureau of Economic Analysis (BEA), which reveals a softer-than-expected core Personal Consumption Expenditure (PCE) price index for November.

Continuing its upward trajectory, the price of gold reached a new multi-week peak surpassing $2,060. The 10-year US Treasury bond yield, a key indicator, remains below 3.9% following subdued US PCE inflation data, providing a favorable environment for bullish momentum in XAU/USD.

The gold price (XAU/USD) climbs to nearly a three-week peak, reaching around the $2,055 area this Friday. However, it faces challenges in fully leveraging the upward movement amid a slight uptick in the US Dollar (USD).

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 2044.64 | Positive Crossover | Bullish
  • MA 20: 2026.76| Positive Crossover | Bullish
  • MA 50: 2002.42 | Positive Crossover | Bullish

Simple:

  • MA 5: 2044.61| Positive Crossover | Bullish
  • MA 20: 2028.28| Positive Crossover | Bullish
  • MA 50: 2002.52 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.97 | Buy Zone | Bullish

Stochastic Oscillator: 99.16| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 2068.85 | R2: 2089.73
  • S1: 2037.52| S2: 2001.55

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Buy Limit: 2037.52 | Take Profit: 2072.00 | Stop Loss: 2018.23.

Elsewhere In the Commodity Market.

Silver price rebounds quickly in the wake of a core PCE inflation report from the US that falls short of projections. Natural Gas futures rise in anticipation of EIA data, with bullish expectations centered around the prospect of cold weather in January.

Gold is up (0.34%) at 2052.79, Silver is down (0.87%) at 24.18, Palladium is down (0.38%) at 1207.00, Platinum is up (0.83%) at 972.00, Brent Crude Oil is down (0.26%) at 79.18, WTI Crude Oil down (0.54%) at 73.49 as of writing time.

Key Economic Events & Data Release for Upcoming Week:

(JPY) Retail Sales (YoY) (Nov) (Thursday).

(USD) Initial Jobless Claims (Thursday).

(USD) Pending Home Sales (MoM) (Nov) (Thursday)

(USD) Crude Oil Inventories (Thursday).