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Research Briefing
| Jul 15, 2024
What you will learn:
To learn more about our price forecasts for base metals, precious metals, battery raw materials and soft commodities, please submit the form to download the full report.
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A recent assessment by the World Bank Group identified the Oxford Economics Model as a superior tool for forecasting commodity prices.
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Overall, we are slightly more bullish on commodity prices across the forecast horizon as we expect higher metal prices than the consensus.
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More frequent adverse supply shocks mean eurozone inflation is likely to be more volatile and possibly higher on average in the future. Food prices are a key channel through which these global shocks will be transmitted, according to our analysis. We provide a quantitative assessment of the impact of a wide range of supply shocks on eurozone inflation.
The commodity touched a high around the 83.770 level on Friday as speculators brought WTI back into the known higher realms of its mid-term price charts. Crude Oil entered this weekend near the 82.260 level and this did show a rather strong amount of selling. Tomorrow opening in WTI Crude Oil will prove intriguing to see if the 82.000 mark can prove durable as support.
Day traders who want to wager on the direction of WTI Crude Oil may want to watch price action as the Americans return to the market on Monday. However it appears for the moment via technical glances the commodity is tucked away into a known price range that may allow for tests of support and resistance levels rather comfortably. One concern for traders may be questions about demand as the U.S economy continues to show some signs of weakness. This thought may cause some headwinds for WTI Crude Oil in the near-term, but fundamentals often do not translate into direct price direction in the commodity.
A look at a one month chart of Crude Oil highlights the higher elements of price remain intact. Also interesting is the ability of 81.000 as a support level since about the 18th of June. Yes, there have been outliers lower, but when the 81.000 realm has been tested the past four weeks WTI Crude Oil has produced upwards momentum and this might be a wagering device for retail traders who are cautious.
The inability of WTI Crude Oil to sustain its higher prices before going into the weekend may raise eyebrows among its doubters, and they may compare last week’s highs to the results of the previous week. The lack of a real challenge to the 84.000 level may prove attractive for speculators who believe WTI Crude Oil may still be in overbought territory and they may believe selling positions which seek quickly hitting moves lower are attractive.
The ability of WTI Crude Oil to remain within its rather bullish one month trend must be watched this week by day traders. If the commodity produces early buying power this would indicate notions about a stronger selloff may prove to be only wishful thinking. If the price of WTI Crude Oil suddenly tops 83.000 early this week and shows the ability to remain above this value, it will indicate speculative buyers remain a force.
The U.S will not publish major economic data this week which should have a big impact on the WTI Crude Oil price. Technical traders may find they have an opportunity to test the known range and attempt quick hitting trades that take advantage of trends that are influenced by technical considerations.
Ready to trade our weekly forecast? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.
Today’s low was just shy of reaching of potential support zone for around 2.23 to 2.17. Nonetheless, a likely strong daily close and a key reversal day shows buyers stepping up. That may lead to a bullish retracement to test potential areas of resistance. If natural gas stays within the downtrend (retracement) price structure following a bounce, a test of the lows and possibly the slightly lower support zone may yet occur.
A key price zone to watch for resistance is around the 200-Day MA, which is now at 2.46. That moving average can be watched together with the previous swing low of 2.475 as they are close to each other. Moreover, the most recent minor swing high of 2.45 is a little lower than the 200-Day line. It has some significance as it was the first day in eight days down that exceeded the previous day’s high.
An advance above 2.45 improves the chance that natural gas can challenge resistance around the 200-Day MA. It would show strength as the 2.45 swing high makes up part of the downtrend price structure of lower swing highs and lower swing lows. A daily close above the price level would confirm strength and improve the chance for a continuation higher. The next higher potential resistance zone looks to be from the 50-Day MA at 2.56 and up to the 20-Day MA at 2.59.
Notice that the 50-Day line continues to rise, and it is approaching the 20-Day line. Also, the 20-Day line is falling and has converged with the 38.2% Fibonacci retracement at 2.60. In general, in Fibonacci analysis, a minimum retracement to at least the 38.2% retracement is common. On June 28 support was found around the same price area as the 38.2% retracement. However, that support level didn’t last long as the next day natural gas continued to fall. A downtrend line for the current decline has been added to the chart to provide additional guidance during an advance.
For a look at all of today’s economic events, check out our economic calendar.
The natural gas markets did very little in the early hours on Friday, and so it looks like we are just going to hang around the $2.25 region. This is a market that might be in the process of forming a little bit of a double bottom on the four hour chart, but really at this point, I think any bounce is probably more or less going to be a short term rally just waiting to happen, not necessarily some type of major turnaround. In fact, we may get that little bit of a bounce, mainly due to the fact that at least here in the northeastern part of the United States, we are going to get pretty nasty heat.
Next week it will be in the neighborhood of around 38°C. if my calculation is correct. But this is a short term thing. So, if you are nimble enough, yes, you may be able to buy it here, but I wouldn’t get married to this position. For myself, I am investing in natural gas and therefore I am through an ETF, and I don’t have any leverage. So, I’m just going to sell at the end of summer, mid fall when we really start to spike in price. It happens every year. So, it’s not exactly a very difficult trade to take, but the lack of leverage is what you desperately need because this is a market that can get thrown around quite quickly.
Thursday saw silver prices surge to nearly two-month highs following an unexpected decline in U.S. Consumer Price Index (CPI) data. The surprise dip in inflation metrics bolstered investor confidence that the Federal Reserve might be inching closer to interest rate cuts, potentially as early as September.
However, Friday’s PPI report, showing a 0.2% increase in wholesale prices for June, slightly exceeded expectations. This data has prompted some traders to book profits and reassess their positions, introducing uncertainty about the Fed’s next moves.
U.S. Treasury yields edged higher on Friday in response to the PPI data. The 10-year Treasury yield rose by over 2 basis points to 4.21%, although it remains on track for a significant weekly decline following Thursday’s CPI-induced drop.
Recent comments from Fed officials have added to the market’s dovish expectations. San Francisco Fed President Mary Daly suggested that further easing in both prices and the labor market could warrant interest rate cuts. Similarly, Chicago Fed President Austan Goolsbee expressed optimism about the U.S. economy’s trajectory toward 2% inflation.
The silver market is experiencing a significant downturn, with prices plummeting rapidly. The bullish momentum from the CPI report has been completely overshadowed by the PPI data, leading to a sharp reversal in market sentiment. Traders are aggressively selling off their positions, causing a cascade effect in prices.
The short-term outlook for silver appears decidedly bearish, with the potential for further downside as market participants continue to digest the conflicting economic signals. Key support levels are likely to be tested in the coming sessions. Investors should brace for increased volatility and potentially steeper declines.
Usual caveat: this series isn’t trying to outline the outright healthiest option, but help you get better nutritional value for as little money as possible.
“Making the right chocolate choices can drastically cut your sugar intake without spoiling the fun,” says Sunna.
We previously looked at how to turn chocolate into a superfood by swapping milk chocolate to increasingly higher percentage dark chocolate – but now we turn to the kind of high street favourite we can’t help but open in front of the telly.
M&M’s Chocolate – 125g for £1.65, 66% sugar content
Galaxy Counters – 122g for £1.65, 58% sugar content
Cadbury Buttons – 119g for £1.65, 56% sugar content
Reese’s Mini Cups – 90g for £1.75, 54% sugar content
Maltesers – 102g for £1.65, 53% sugar content
Maltesers Dark Chocolate – 88g for £1.65, 32% sugar content
“There seems to be a clear correlation here that we have to factor into our choices,” Sunna says.
That is – cocoa is expensive and sugar is cheap.
“So, the better ‘value’ bigger packs are just loading you with more sugar,” he says.
How much sugar can we eat?
The NHS recommends adults have 30g of sugar a day, with that decreasing to 24g for seven to 10-year-olds and 19g a day for four to six-year-olds.
“A cut in sugar is not just good news for our waistlines, but also for our overall health, contributing to a balanced diet without the same spikes in blood sugar levels,” Sunna says.
Those spikes can cause sudden drops in energy, spates of hunger and potentially lead to type two diabetes.
Take the M&M’s mentioned by Sunna in that table.
“They offer 125g bag with 66% sugar content which is an astounding 82.5g of sugar per bag,” he says.
“That’s over 20 teaspoons of sugar – or nearly three times your daily recommended intake for adults in just one bag – and we all know that one bag never makes it through movie night unfinished.”
At the bottom end of the list is Maltesers Dark Chocolate.
“At just 32% sugar in an 88g bag, we are talking about a cool 28g of sugar per bag.
“That’s still seven teaspoons of sugar and 93% of your daily allowance – but is a whopping 65% less sugar than M&M’s – so that’s a big win for your health.”
Zooming out
Let’s take an even further step back.
If you consume 60 bags’ worth over the course of a year, then you could be in for a massive 3.2kg of sugar savings per year if you switch from M&M’s to Maltesers Dark Chocolate.
“That’s definitely worth it considering the price you’ll pay is exactly the same – albeit for a 30% smaller bag,” Sunna says.
“You could look at it being a 30% more expensive choice for the healthier Dark Maltesers, but your health will certainly thank you and your bank account will look the same at the end of the day.”
If the dark chocolate alternative just isn’t for you, then try picking options that have lower sugar content – and use the examples above as a guide.
The nutritionist’s view – from Nichola Ludlam-Raine, dietitian at nicsnutrition.com…
“When we cut down on sugar, it’s crucial not to overlook other aspects of our diet, particularly saturated fat.
“Many foods, including chocolate, marketed as ‘low sugar’ or ‘sugar-free’ (many ‘diabetic’ chocolate bars may say this on the front) often compensate for taste with increased levels of saturated fats or sweeteners – too much of which may cause an upset stomach.
“These fats, when consumed in excess, can raise cholesterol levels and increase the risk of heart disease.
“Therefore, while reducing sugar intake, one must also be mindful of saturated fat content to ensure a truly balanced and health-promoting diet.
“In the quest for healthier alternatives, 70% cocoa chocolate often strikes a happy balance between health and taste.
“Dark chocolate with this level of cocoa content tends to have less sugar compared to milk chocolate while still retaining a satisfying taste.
“Additionally, it offers several health benefits, including antioxidants, which can contribute to heart health and improved cognitive function.
“However, it’s still important to consume it in moderation, as even dark chocolate contains calories and some saturated fat.”
Sky News has approached Mars Wrigley Confectionary Ltd, which owns M&M’s, for comment.
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Gold price is reversing to test the $2,400 threshold early Friday, staging a minor pullback from a new two-month top set at $2,425 on Thursday. Traders now look forward to the US Producer Price Index (PPI) data and looming risks of more Japanese forex (FX) market intervention for the next push higher in Gold price.
Gold price is on track to witness a third consecutive week of gains, sitting at its highest level since May. Despite the latest pullback Gold price remains exposed to upside risks, as a September interest rate cut by the US Federal Reserve (Fed) is almost a done deal after the softer-than-expected June US Consumer Price Index (CPI) data released on Thursday.
The US CPI climbed 3.0% YoY in June, slowing from a 3.3% increase in May and below the 3.1% expected print. Meanwhile, the annual core CPI inflation dipped to 3.3% in the same period, against the market consensus of 3.4%. On a monthly basis, CPI fell 0.1% while core CPI rose 0.1%. Both readings fell short of expectations.
Bets for a September Fed rate cut spiked to above 90% following the dismal US inflation data, according to the CME Group’s FedWatch Tool, compared to a 74% chance seen pre-CPI release. The US Dollar was slammed alongside the US Treasury bond yields, in the aftermath of the US inflation data, with the pain exacerbated by the USD/JPY sell-off.
The Japanese Yen rallied hard, as the US CPI gloom was joined by Japan’s forex market intervention, smashing USD/JPY over 300 pips in a matter of an hour. Against this backdrop, Gold price stormed through the $2,400 barrier to hit the highest level in two months.
In the day ahead, Gold price could see an extension of the corrective downside if the US Dollar recovery gathers traction. However, traders will likely remain wary ahead of the US PPI inflation report and the preliminary Michigan Consumer Sentiment and Inflation Expectations, which could reinforce fresh selling around the US Dollar. This, in turn, could trigger a fresh leg higher in Gold price. The end-of-the-week flows could also play a pivot role in the Gold price action.
The short-term technical outlook for Gold price continues to suggest a retest of the all-time highs at $2,450, as the 14-day Relative Strength Index (RSI) holds its position well above the 50 level.
Adding credence to the bullish potential, the 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from below, which if realized on a daily closing basis will confirm a Bull Cross and revive the Gold price upside.
Gold buyers need to yield a decisive break above the two-month high of $2,425 to retake the record highs of $2,450.
On the downside, if the pullback gains momentum, Gold price could face immediate support at the previous week’s high near $2,390.
The next bearish target is seen at the previous day’s low of $2,371, below which the $2,350 psychological level will come into play.
All in all, Gold price remains a good buying opportunity on every pullback.
(This story was corrected on July 12 at 07:41 GMT to say that “the 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from below, which if realized on a daily closing basis will confirm a Bull Cross and revive the Gold price upside,” not Bear Cross).
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Gold price is reversing to test the $2,400 threshold early Friday, staging a minor pullback from a new two-month top set at $2,425 on Thursday. Traders now look forward to the US Producer Price Index (PPI) data and looming risks of more Japanese forex (FX) market intervention for the next push higher in Gold price.
Gold price is on track to witness a third consecutive week of gains, sitting at its highest level since May. Despite the latest pullback Gold price remains exposed to upside risks, as a September interest rate cut by the US Federal Reserve (Fed) is almost a done deal after the softer-than-expected June US Consumer Price Index (CPI) data released on Thursday.
The US CPI climbed 3.0% YoY in June, slowing from a 3.3% increase in May and below the 3.1% expected print. Meanwhile, the annual core CPI inflation dipped to 3.3% in the same period, against the market consensus of 3.4%. On a monthly basis, CPI fell 0.1% while core CPI rose 0.1%. Both readings fell short of expectations.
Bets for a September Fed rate cut spiked to above 90% following the dismal US inflation data, according to the CME Group’s FedWatch Tool, compared to a 74% chance seen pre-CPI release. The US Dollar was slammed alongside the US Treasury bond yields, in the aftermath of the US inflation data, with the pain exacerbated by the USD/JPY sell-off.
The Japanese Yen rallied hard, as the US CPI gloom was joined by Japan’s forex market intervention, smashing USD/JPY over 300 pips in a matter of an hour. Against this backdrop, Gold price stormed through the $2,400 barrier to hit the highest level in two months.
In the day ahead, Gold price could see an extension of the corrective downside if the US Dollar recovery gathers traction. However, traders will likely remain wary ahead of the US PPI inflation report and the preliminary Michigan Consumer Sentiment and Inflation Expectations, which could reinforce fresh selling around the US Dollar. This, in turn, could trigger a fresh leg higher in Gold price. The end-of-the-week flows could also play a pivot role in the Gold price action.
The short-term technical outlook for Gold price continues to suggest a retest of the all-time highs at $2,450, as the 14-day Relative Strength Index (RSI) holds its position well above the 50 level.
Adding credence to the bullish potential, the 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from below, which if realized on a daily closing basis will confirm a Bull Cross and revive the Gold price upside.
Gold buyers need to yield a decisive break above the two-month high of $2,425 to retake the record highs of $2,450.
On the downside, if the pullback gains momentum, Gold price could face immediate support at the previous week’s high near $2,390.
The next bearish target is seen at the previous day’s low of $2,371, below which the $2,350 psychological level will come into play.
All in all, Gold price remains a good buying opportunity on every pullback.
(This story was corrected on July 12 at 07:41 GMT to say that “the 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from below, which if realized on a daily closing basis will confirm a Bull Cross and revive the Gold price upside,” not Bear Cross).
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Within the 2.27 to 2.17 price zone are two additional indications on the daily chart that support the identification of that price zone. First, there is a descending ABCD pattern where the CD leg of the pattern has been extended by 127.2% of the initial AB decline. It reaches the target at 2.20. In addition, there is a 61.8% Fibonacci retracement that completes at 2.18.
Since today is Thursday, if natural gas stays around current price levels or lower heading into the weekend, it is set to end with another bearish weekly candlestick pattern and a close near the lows of the week. Regardless, this week will complete the fourth sequential week of lower weekly highs and lower weekly lows. As of the 2.26 low today, the price of natural gas has declined by 28.4% from the June swing high of 3.16 (A).
If support is seen in the price zone that leads to a bullish reversal, rallies will first need to contend with possible resistance around the 200-Day MA, currently at 2.46. It represented resistance earlier this week and may do so again. Given how persistent the current correction has been to date, there is a chance for a bounce up into resistance, followed by a turn back down.
Either way, if the 2.17 price area is decisively broken to the downside, the initial bullish breakout from the top of a bottom symmetrical triangle pattern could eventually be challenged as support. That price level is at 2.00 and highlighted on the chart with a red box.
The current retracement followed a failed attempt to break out above the downtrend line in early-June. That created a lower swing high and kept the downtrend price structure in place. Failed moves can lead to fast moves and that looks to be what we’ve been seeing in natural gas since the June high.
For a look at all of today’s economic events, check out our economic calendar.
Federal Reserve Chair Jerome Powell’s recent congressional testimony has sparked renewed interest in gold. During his appearances before Senate and House committees, Powell indicated that the Fed is moving closer to a rate cut decision, while maintaining caution about declaring victory over inflation.
The Consumer Price Index (CPI) report, due later today, is expected to show core inflation rising 0.2% month-on-month in June. Economists surveyed by Dow Jones forecast June’s headline CPI to reflect a 0.1% rise monthly and 3.1% annually, down from May’s 3.3% yearly increase. The Producer Price Index (PPI) follows on Friday. These reports are crucial for gauging the Fed’s next moves.
According to the CME FedWatch tool, markets are now pricing in a more than 71% chance of a Fed rate cut in September, a significant increase from the near-even odds a month ago. This shift in expectations has put pressure on the U.S. dollar, making gold more attractive to investors holding other currencies.
U.S. Treasury yields remained stable as investors await the inflation data. The dollar edged 0.2% lower against a basket of currencies, with traders hesitant to take new positions before the CPI report. The Fed’s 2% inflation target remains a key focus, with Powell suggesting that the central bank might not wait for inflation to reach this level before considering rate cuts.
Lukman Otunuga, senior research analyst at FXTM, noted that “Gold continues to shine on rising Fed rate cut bets following dovish comments by Powell during his congressional testimony.” Zain Vawda, market analyst at MarketPulse by OANDA, added that a softer-than-expected CPI could push gold above $2,400.
The short-term outlook for gold appears bullish. If CPI data comes in softer than expected, gold prices could potentially break above the $2,400 mark. The current trend in monetary policy and sustained gold demand indicate the ongoing bull market in gold could persist.
Notice accounts have seen a rally in recent times, with rates on the rise.
Some of these accounts are offering some of the highest rates outside of regular savings accounts. OakNorth’s 95-Day Base Rate Tracker, paying 5.37% AER, and Vanquis’s 90 and 60-Day accounts, paying 5.35% and 5.30% AER respectively, even beat any fixed-rate term accounts currently available.
As the name suggests, notice accounts require you to give notice to access your money without a penalty. Usual notice periods range from 30 to 120 days, although there are some accounts on the market that require six months or even a year’s notice.
While you need to give the required notice to access your cash on the majority of notice accounts, some will allow immediate access with a penalty equivalent to the notice period – although this is now less common. This penalty can be taken from the capital if insufficient interest has built up prior to access, so it’s important to plan carefully as you could end up with less money than you put in.
It’s also important to note that unlike fixed-rate bonds, notice accounts pay a variable rate of interest so are subject to fluctuations in rates over time. This is particularly pertinent given the speculation that the Bank of England is considering cutting interest rates in the coming months, which may well be passed onto savers in variable rate accounts by the underlying provider.
In the case of notice accounts, when rates decrease, the amount of notice given to customers varies from provider to provider. Some providers will give customers the full notice period, plus x number of days, before any rate reductions take effect – in essence, allowing clients to give notice and withdraw their funds from the account before the new, lower rate takes effect.
Other providers may only give a set amount of days, less than the notice period itself, which means that, even if you were to give notice on the day you were informed of the rate drop, your money would be subject to the lower rate for at least part of the notice period. As there is no hard and fast rule on this, it is important to check the terms and conditions of the account so you know what situation you will be in if or when rates start to fall.
For some people, not being able to access their money immediately is important to help them to resist dipping into their savings and it could also be a good way of getting a higher return on money that you know you will not need straight away – so could be a serious consideration for many cash savers.