#Commodity Analysis: #Gold,#Crudeoil,#Naturalgas (24 OCT 2023)

Gold Technical Analysis: Gold Is Still the Strongest

Despite the discontinuation of gains, gold prices are still on an upward path, and a return towards the historical psychological resistance level of $2,000 per ounce is possible.

• The price of gold XAU/USD declined towards the level of 1965 USD per ounce, after it was the closest to testing the psychological resistance of 2,000 USD per ounce at the end of last week's trading.
• However, the price of gold XAU/USD is still strongly supported by the continuation of global geopolitical tensions led by the Middle East.
• Moreover, the expansion of the conflict means more demand from investors to buy safe havens, and gold is one of the most popular among investors and even central banks.

US Data in Focus

On another level, The US dollar calendar this week is dominated by the GDP reading and the release of US inflation numbers in the form of the personal consumption expenditures index. Nevertheless, the global investor sentiment and the development of long-term US bond yields will also remain important. Also, The US quarterly GDP release comes at 1:30 GMT on Thursday, and therefore conflicts with the European Central Bank event, which could make trading at this time interesting, if somewhat confusing.

Over and above that, the market is awaiting the announcement of US growth of 4.1% on a quarterly basis in the third quarter, with activity rising from 2.1% in the second quarter, which confirms the recovery of activity in recent months. Meanwhile, If GDP and most other US macro indicators come in higher during the week, that will at least reinforce the “higher for longer” narrative. In this regard, Fouad Razaqzada, an analyst at City Index, says: “Disappointing economic data may ultimately lead to a decline in the US dollar and revenues.”

A strong hit could provide some support to the US dollar, although it must be said that a great deal of good news has already been priced into this currency.

Likewise, another US important event to watch is the release of durable goods orders, which will be released alongside the GDP reading, where a 0.6% increase is expected. Also, there will be some US inflation data on Friday, with the Personal Consumption Expenditures Price Index released at 13:30 GMT. This is a notable release because it is considered in fact the Fed's preferred measure of inflation.

As such, the market reaction may be worth watching if the actual numbers deviate from expectations. In this regard, the consensus points to a 0.3% increase in the main US personal consumption expenditures index monthly in September, with the core personal consumption expenditures index rising by a similar margin. If the numbers are lower than that, it could weaken the dollar, but it is likely to require a significant beat to spur a dollar rally, given the asymmetric expectations surrounding US data (i.e., there is a lot of good news baked into the US dollar).

On another note, on the US stock front, the S&P 500 rose 0.5% in afternoon trading, breaking out of its worst week in a month. Similarly, Dow Jones Industrial Average Index rose by 5 points, or less than 0.3%, and the Nasdaq Composite rose 0.9%.

Obviously, the rapid rise in yields in the bond market has been putting pressure on stock prices since the summer, and it looks set to continue rising. Yesterday, the yield on the US 10-year Treasury bond briefly rose to 5.02% to reach its highest level since 2007. This helped to sink stocks, with the S&P 500 falling as much as 0.8%. However, the 10-year bond yield eventually retreated to 4.84%, after being at 4.91% late Friday, as oil prices retreated to ease some of the inflation pressures. Therefore, this helped to ease the pressure on the stock market and helped to drive gains.

Gold price forecast today

Despite the discontinuation of gains, gold prices (XAU/USD) are still on an upward path, and a return towards the historical psychological resistance level of $2,000 per ounce is possible. Therefore, this indicates the extent of the strength and control of the bulls over the trend. At the same time, the technical indicators are moving towards strong levels of saturation with purchase. If geopolitical tensions calm down, the price of gold (XAU/USD) will be exposed to rapid selling to take profits. According to the performance on the daily chart below, the general upward trend for gold price XAU/USD will not be broken without returning to the support levels of 1945 and 1930 dollars per ounce again.

Finally, in addition to the extent to which investors are willing to take risks or not, the market will be affected by sentiment towards the economic performance of the Eurozone, Britain, and the United States.

Crude Oil Forecast: Looks Bullish Despite the Pullback

Despite the inherent noise in this market, a bullish sentiment prevails.

• The crude oil markets witnessed a significant dip during Monday's trading session.
• However, despite this drop, there are clear signs that buyers are still in control, with potential for further gains ahead. In fact, all it would take is a few bad headlines coming out of the Middle East to kick a big move higher off.
• However, there is a lot of noise that the market is trying to work off, as markets cannot go in one direction forever.

The West Texas Intermediate (WTI) Crude Oil market experienced an initial decline on Monday, reflecting some hesitation among traders. Nevertheless, it's evident that the buyers hold sway, pushing the market toward higher levels. The $90 resistance level stands as a short-term obstacle, but a breakthrough could lead to a move towards $95.

In the event of a breakdown below the lowest point of the candlestick, the market might target the 50-Day Exponential Moving Average near the $85 level in the futures market. If the bearish momentum persists, the 200-Day EMA could come into play. However, it's challenging to foresee a prolonged oil price decline, given ongoing tensions in the Middle East and the inflationary pressures driving fuel prices higher.

Traders Should Remain Vigilant

The Brent markets also experienced a slight retreat early in Monday's trading session. Nevertheless, a swift rebound demonstrates the market's resilience. If conditions remain stable, the market is poised to test the $95 level, which it recently pulled back from. A breakthrough beyond this point could propel Brent towards the coveted $100 level. Conversely, a decline below $90 may lead to a test of the 50-Day EMA.

Despite the inherent noise in this market, a bullish sentiment prevails. Short-term pullbacks present opportunities to acquire oil at more favorable prices. Unless there is a significant shift in Middle East dynamics, which appears unlikely in the short term, pullbacks should be viewed as potential buying opportunities in a robust market.

In the end, both WTI Crude Oil and Brent markets have shown resilience in the face of recent fluctuations. While short-term obstacles exist, buyers are expected to continue driving the market upward. The geopolitical tensions in the Middle East and persistent inflationary pressures are factors that could support higher oil prices in the near future. As such, traders should remain vigilant for potential buying opportunities amidst the market's noise and fluctuations.

Natural Gas Forecast: Looks Bullish Longer Term, Despite Indian Summer

Using an ETF without leverage, as I've been doing, is a prudent approach.

The United States is currently experiencing what's commonly referred to as an "Indian Summer," which means warmer temperatures are on the horizon for the next week or two. This change in weather has had an impact on the pricing of natural gas. It might seem a bit surprising at first, but there are reasons behind it.

Be Patient

• In this scenario, shorting or betting against the market doesn't make sense. Over time, the natural gas market is likely to respond to the seasonal factors at play.
• Factors such as decreased supply in the European Union and colder temperatures will contribute to pushing prices upward.
• This is a seasonal trade, and it's fueled by the disruption in Russian natural gas supply and shortages from other sources.

In conclusion, patience is key in this market. While it may take some time for the market to fully respond to these factors, it's only a matter of time before natural gas prices start to rise. So, if you can exercise a certain amount of patience and invest wisely, there's a real possibility of doubling your investment as the market follows its seasonal trajectory. By keeping your leverage minimal, you are better able to withstand some of these noisy periods of volatility, as we are presently seeing in the markets.

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