Commodity Analysis: #Gold,#Silver,#Crudeoil,Natural Gas (21 June 2023)

Gold Technical Analysis: Prices Head Towards Buying Levels

• After a quiet and stable start in the shadow of the American holiday XAU/USD gold futures fell below $1950, with losses affecting the support level at $1930 an ounce.
• This happened before settling around the $1940 level at the time of writing.
• The decline coincided with investors' readiness for an additional increase in US interest rates in the second half of 2023.
• While the loss in gold prices was limited, the latest downward run since sliding to record highs has sparked some panic about the future of the precious metal.

All in all, the XAU/USD gold price retreated from a weekly loss of about 1%, but it is still up more than 6% since the beginning of the year 2023. In the same way, the price of silver, gold’s sister commodity, breached below $24 an ounce. The price of the white metal fell by 4% last week, bringing its 2023 year-to-date performance to -4%. It will be a relatively quiet week for gold-related news. The yellow metal is likely to find direction in the flurry of rhetoric from Fed officials, including Fed Chair Jerome Powell's semi-annual testimony to Congress.

Meanwhile, the US Treasury market was mostly in the red, with the 10-year yield down five basis points to 3.719%. One-month bond yields were flat at 5.115%, while the 30-year yield fell 4.4 basis points to 3.812%. Gold is usually sensitive to movements in interest rates because they can affect the opportunity cost of holding non-yielding bullion.

The US currency also affected gold prices on Tuesday. The US Dollar Index (DXY), a measure of the US currency against a basket of other major currencies, rose to 102.66, from an opening of 102.48. In general, the price of the dollar decreased by 0.66% last week, and it is down by about 1% since the beginning of the year 2023 to date.

Generally, a stronger profit is bad for dollar-denominated commodities because it makes them more expensive for foreign investors to buy.

As for other metals markets, copper futures fell to $3.8725 a pound. Platinum futures fell to $965.70 an ounce. Palladium futures fell to $1,378.50 an ounce.

Gold price forecast today:

According to the performance on the daily chart below, the XAU/USD gold price is heading towards new buying levels. I see the most appropriate ones for that time 1925, 1910, and 1885, respectively. This may happen if signals from US Central Bank Governor Jerome Powell come to support the future of tightening the bank's policy with more US rate hikes, to change the market's view after the bank's recent decision to stop raising last week.

On the other hand, the XAU/USD gold price will have the opportunity for the markets to talk more about the future of the psychological resistance at $2000 an ounce, in case prices return towards the $1965 and $1980 resistance levels, respectively. I still prefer to buy gold from every downward level.

Crude Oil Forecast: Markets Experience Volatility Amidst Demand Uncertainty

The crude oil market exhibits a delicate "push/pull" situation characterized by concerns over a significant lack of demand.

The West Texas Intermediate (WTI) and Brent crude oil markets have witnessed rallies, testing the 50-Day Exponential Moving Average, only to surrender those gains. The prevailing volatility in these markets is driven by numerous uncertainties plaguing the oil industry.

The foremost concern revolves around whether or not there will be an uptick in demand. Despite significant production cuts, the struggling global economy presents a significant hurdle. The crude oil market remains highly volatile, not just at the 50-Day EMA but also at the $75 level. Consequently, selling pressure is expected to emerge even in an upside breakout.

Traders Should Remain Vigilant

• The crude oil market exhibits a delicate "push/pull" situation characterized by concerns over a significant lack of demand.
• However, recent production cuts by OPEC and its allies contribute to a floor in the market.
• As a result, crude oil is viewed as a market where rallies may fade, suggesting a preference for selling opportunities.
• These dynamics also imply that the market will likely remain within a consolidation phase for now.

The WTI and Brent crude oil markets have displayed volatility in recent trading sessions, prompted by demand uncertainty. Despite production cuts and temporary support from OPEC, the global economic struggles persist, exerting negative pressure on the market. Key support levels, such as $70 for WTI and $75 for Brent, are crucial to monitor. A breach of these levels may lead to further downward movement. In light of the current market dynamics, crude oil is viewed as a market where rallies can be faded, with consolidation expected in the near term. Traders should remain vigilant and carefully assess market conditions for potential selling opportunities amidst ongoing uncertainties in the oil industry.

Natural Gas Forecast: Market Remains Sluggish Amid Summer Trading and Supply Concerns

It is crucial to consider the impact of summer on natural gas trading dynamics, as the market historically experiences reduced activity during this period.

• The natural gas market exhibited sluggishness and minimal activity on Wednesday, reflecting the typical quietness associated with summertime trading.
• During this season, heating demand significantly decreases, leading to a lack of substantial market movement.
• While occasional heatwaves may result in short-term price spikes, the prevailing trend suggests a preference for selling into these rallies.

The 50-Day Exponential Moving Average is relatively flat, indicating the market's inclination to continue trading sideways. With the $2.00 level offering significant support and the $3.00 level serving as notable resistance, the market remains in a middle range, characterized by limited price fluctuations. The European importation of liquefied natural gas will play a vital role in market dynamics. Given Norway's inability to meet the European Union's gas demand and Qatar's insufficient assistance, the Europeans may have to rely more on the United States for energy supply.

Short-term Trading Seems Prudent

Approaching the $2.00 level presents an opportunity to initiate buying positions, capitalizing on potential bounces for profit accumulation. The market has witnessed a sharp decline from previous highs, diminishing the "fear of missing out" trading mentality. As a result, short-term trading with a focus on longer-term upward momentum seems prudent.

The natural gas market displayed sluggishness and limited activity during Wednesday's trading session, consistent with the usual quietness associated with summertime trading. Heating demand significantly declines during this period, causing the market to remain relatively stagnant. Concerns surrounding the European gas supply, particularly due to the closure of the Groningen gas fields, contribute to the market's sluggishness. Given the significant role of natural gas in electricity production, industrial demand also plays a role in maintaining subdued market performance. Sideways trading persists, with the $2.00 support level and the $3.00 resistance level acting as key boundaries. The importation of liquefied natural gas by the Europeans and potential reliance on the US energy supply add further complexity to the market. By capitalizing on buying opportunities near the $2.00 level, traders can aim to profit from short-term price bounces while keeping an eye on the market's longer-term upward momentum.

Silver Signal: Market Faces Selling Pressure

While the overall outlook remains bullish, traders should remain vigilant and monitor market developments closely in the coming days.

• The silver market experienced a significant decline during Tuesday's trading session, with a focus on the 200-Day Exponential Moving Average as a critical support level.
• Additionally, the market approaches the 50% Fibonacci retracement level, an area that has historically provided robust support. Traders will closely monitor the 200-Day EMA, given its widespread popularity as a technical indicator.
• Amidst the back-and-forth trading patterns, dips in price continue to present potential value opportunities.

Breaking below the $23 level could lead the market to test the 61.8% Fibonacci retracement level near $22.25. A further decline may open the door to the $22 level, followed by the possibility of an even deeper correction toward $20. It is essential to consider these support levels while acknowledging the market's potential noise and the historical presence of buyers in these areas. However, due to the notable volatility in the silver market, traders should exercise caution and manage position sizes appropriately.

The Outlook Remains Bullish

Conversely, if the market breaks above the $24.50 level, it could pave the way for a potential move toward the $25 level. The previous support at $25 holds "market memory" and will likely attract traders' attention. The overall direction of the US Dollar Index and the market's perception of precious metals as a wealth preservation tool will influence silver's price dynamics. Monitoring these factors to assess the market's future trajectory is crucial.

The silver market faced significant selling pressure during Tuesday's trading session, prompting attention toward the key support level of the 200-Day EMA. Traders also focus on the 50% Fibonacci retracement level, historically associated with strong support. Despite the potential market noise, dips in price continue to offer valuable opportunities. However, caution is advised due to the silver market's well-known volatility. Breaking below the $23 level may trigger further corrections towards $22.25 and potentially $22, with even deeper declines toward $20 as a possibility. On the upside, surpassing the $24.50 resistance level could propel silver toward the significant $25 level, attracting traders based on market memory. The market's trajectory will depend on factors such as the US Dollar Index and the role of precious metals in wealth preservation. While the overall outlook remains bullish, traders should remain vigilant and monitor market developments closely in the coming days.

Potential signal: Pay attention to the US dollar. If it starts to cool off, then I will be looking to buy silver. A move above $23.50 that coincides with US dollar selling is a reason to get long. I would have a stop loss at $23.00, with a target of $24.78 above.

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