XAU/USD Current price: $2,357.41

• US Consumer Confidence unexpectedly surged in May, according to CB.
• Federal Reserve officials maintained a cautious tone about inflation progress.
• XAU/USD turned neutral in the near term, needs to conquer the $2,360 threshold.

Gold kept recovering on the broad US Dollar’s weakness and regardless of the market mood, with XAU/USD trading around $2,360. The Greenback enjoyed temporal demand at the beginning of the American session, following the release of upbeat data.

The United States (US) released the S&P/Case-Shiller Home Price Index, which improved to 7.4% in March, beating expectations. Also, the Conference Board Consumer Confidence Index unexpectedly improved in May to 102.0 from an upwardly revised 97.5 in April. The Present Situation sub-index increased to 143.1 from 140.6 previously, while the Expectations sub-index rose to 74.6  from 68.8, still below the 80 threshold, which usually signals a recession ahead.

Wall Street, however, could not take advantage of the news. Following the dismal performance of their overseas counterparts, US indexes trade with a mixed tone, with the Dow Jones Industrial Average (DJIA) dipping in the red, the S&P500 hovering around its opening level, and the Nasdaq Composite up 82 points.

Meanwhile, Federal Reserve (Fed) officials delivered cautious words about inflation. On the one hand, Governor Michelle Bownan said she would have supported either waiting to slow the quantitative tightening pace or a more tapered slowing in balance sheet run-off. On the other, Minneapolis Fed’s President Neel Kashkari said the US economy has remained remarkably resilient and that he does not see a need to hurry to cut rates. He added that policymakers should not rule anything out on the monetary policy path and that he would prefer to see more months of positive inflation data before a rate cut.  

XAU/USD short-term technical outlook

XAU/USD is up for a third consecutive day. In the daily chart, technical indicators have partially lost their upward strength but hold within positive levels. At the same time, the pair is hovering around a mildly bullish 20 Simple Moving Average (SMA), while the longer moving averages head firmly north, far below the current level. The overall stance is positive, albeit the momentum is missing.

In the near term, and according to the 4-hour chart, XAU/USD has turned neutral. The Momentum indicator is flat, just above its 100 level, while the Relative Strength Index (RSI) indicator aims marginally higher at around 49. The 20 SMA heads south below the longer ones, yet the pair met intraday support around it, while a mildly bullish 100 SMA acts as dynamic resistance around $2,360.

Support levels: 2,340.20 2,325.30 2,307.10

Resistance levels: 2,364.00 2,372.90 2,384.15

XAU/USD Current price: $2,357.41

• US Consumer Confidence unexpectedly surged in May, according to CB.
• Federal Reserve officials maintained a cautious tone about inflation progress.
• XAU/USD turned neutral in the near term, needs to conquer the $2,360 threshold.

Gold kept recovering on the broad US Dollar’s weakness and regardless of the market mood, with XAU/USD trading around $2,360. The Greenback enjoyed temporal demand at the beginning of the American session, following the release of upbeat data.

The United States (US) released the S&P/Case-Shiller Home Price Index, which improved to 7.4% in March, beating expectations. Also, the Conference Board Consumer Confidence Index unexpectedly improved in May to 102.0 from an upwardly revised 97.5 in April. The Present Situation sub-index increased to 143.1 from 140.6 previously, while the Expectations sub-index rose to 74.6  from 68.8, still below the 80 threshold, which usually signals a recession ahead.

Wall Street, however, could not take advantage of the news. Following the dismal performance of their overseas counterparts, US indexes trade with a mixed tone, with the Dow Jones Industrial Average (DJIA) dipping in the red, the S&P500 hovering around its opening level, and the Nasdaq Composite up 82 points.

Meanwhile, Federal Reserve (Fed) officials delivered cautious words about inflation. On the one hand, Governor Michelle Bownan said she would have supported either waiting to slow the quantitative tightening pace or a more tapered slowing in balance sheet run-off. On the other, Minneapolis Fed’s President Neel Kashkari said the US economy has remained remarkably resilient and that he does not see a need to hurry to cut rates. He added that policymakers should not rule anything out on the monetary policy path and that he would prefer to see more months of positive inflation data before a rate cut.  

XAU/USD short-term technical outlook

XAU/USD is up for a third consecutive day. In the daily chart, technical indicators have partially lost their upward strength but hold within positive levels. At the same time, the pair is hovering around a mildly bullish 20 Simple Moving Average (SMA), while the longer moving averages head firmly north, far below the current level. The overall stance is positive, albeit the momentum is missing.

In the near term, and according to the 4-hour chart, XAU/USD has turned neutral. The Momentum indicator is flat, just above its 100 level, while the Relative Strength Index (RSI) indicator aims marginally higher at around 49. The 20 SMA heads south below the longer ones, yet the pair met intraday support around it, while a mildly bullish 100 SMA acts as dynamic resistance around $2,360.

Support levels: 2,340.20 2,325.30 2,307.10

Resistance levels: 2,364.00 2,372.90 2,384.15

Natural gas markets remain somewhat elevated after gapping higher, as weather forecasts go back and forth. It looks as if we are going to have a somewhat colder winter than what we thought previously, and of course when you look at the daily chart you can see that the bullish flag kicked off as well. Ultimately though, when we Like this it’s quite often that we need to fill that gap.

NATGAS Video 08.11.18

I don’t have any interest in shorting this market right now though, and I think we need to be very cautious in doing so. Because of this, I simply think that a pullback into this gap probably represents value the people will be willing to take advantage of, as we have seen it over extension of the bullish pressure and quite frankly we would need to pick up more traders and by orders to go higher. I don’t know how much higher we go, but clearly there is a proclivity to rally. It’s not until we would break down below the $3.15 level that the uptrend would be in danger, as it would break the bottom of the flag. That doesn’t seem very likely to happen, at least not until we start trading warmer months in the futures pits, perhaps the March contract.

I think the $4.00 level above will be a major psychological barrier to break, and quite frankly I think it would take something extraordinary to get there but then again I’m the first to admit that I didn’t think we would get here. This goes right along with the old adage “the market can remain unreasonable much longer than you can remain solvent.”

This article was originally posted on FX Empire

More From FXEMPIRE:

2024-05-27 11:01:01 ET

The Brent crude oil price drifted upwards on Monday as investors focused on the upcoming driving season in the United States. It rose for two straight days, moving to the key resistance point at $82.50, higher than last week’s low of $80.60.

Driving season ahead

The next crucial catalyst for crude oil price is the US driving season, which starts after the Memorial Holiday weekend. This season is characterised by more driving in the United States and higher demand for gasoline.

In some cases, oil prices tend to rise during the driving season, which explains why Joe Biden’s administration has announced plans to release 1 million barrels of oil. His goal is to keep gas prices lower ahead of the election in November.

The new SPR sale will push the country’s reserves to about 367 million barrels, the lowest level in decades. Biden’s administration has sold over 240 million barrels since 2020.

It is unclear whether these sales will help lower the price of Brent and West Texas Intermediate (WTI). Also, it is less certain whether demand in the driving season will drive prices higher.

The oil industry is dealing with numerous moving parts. OPEC+ has imposed a 2 million barrel a day supply cap in a bid to boost prices. At the same time, Russia is still pumping millions of barrels each day despite western sanctions.

Additionally, flash economic numbers show that the world economy is doing modestly well, a positive sign for oil. China grew by over 5% in the first quarter and its trade figures are still strong. European economies like in Germany and France have started growing, raising the possibility that the bloc will emerge from a recession.

Altogether, the Energy Information Administration (EIA) expects that the global demand will

rise to over 102.84 million barrels

a day this year.  While the

IEA has slashed its demand outlook

, it remained at 102.7 million bpd, higher than the expected supply.

Brent crude oil price forecast

Brent chart by TradingView

The daily chart shows that the price of Brent has moved sideways in the past few months. It has retreated from the month-to-date high of about $92 to the current $82.80. At the same time, the 50-day and 100-day Exponential Moving Averages (EMA) have formed a bearish crossover pattern.

Brent has also formed a symmetrical triangle pattern, which is a neutral pattern. Therefore, Brent will likely remain in a tight range during the current driving season. The key support and resistance levels will be at $79 and $92, its lower and upper sides of the triangle pattern.

The post

Brent crude oil forecast as US summer driving season starts

appeared first on

Invezz

XAU/USD Current price: $2,354.27

• Gold recovered some of the ground lost last week amid persistent US Dollar interest.
• The focus this week is on the US Personal Consumption Expenditures Price Index.
• XAU/USD struggling to extend gains in the near term, still under bulls’ control.

Gold prices are up on Monday, with XAU/USD trading at around $2,355 after the European close. The bright metal extended its Friday recovery when it slid $2,325.30, its lowest in two weeks. The tepid recovery was the result of the persistent weakness of the US Dollar, as investors keep pricing in no rate cuts from the Federal Reserve (Fed) in the upcoming two meetings. The recovery stalled amid the Memorial Day holiday in the United States (US), keeping local markets closed.

The US has a light macroeconomic calendar in the upcoming days, shifting the focus to Friday when the country will publish the April Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge. PCE inflation is foreseen to be stable at 2.7% YoY, while the core annual reading is expected to print at 2.8%, matching the March reading. Finally, the PCE Price Index is expected to have risen 0.3% MoM. Generally speaking, readings below forecast should boost the odds for a soon-to-come rate hike, while the opposite scenario will be understood as a delay in monetary tightening beyond September.

XAU/USD short-term technical outlook

From a technical point of view, the XAU/USD pair seems poised to extend its advance. The daily chart shows that tast week’s slump was enough for the pair to correct overbought conditions, and technical indicators are currently bouncing from their midlines. At the same time, the pair is recovering above a directionless 20 Simple Moving Average (SMA) while the longer moving averages accelerate their advances far below the shorter one, all of which reflects persistent buying interest.

In the near term, however, according to the 4-hour chart, the recovery stalled around a congestion of moving averages, with the 20 SMA heading firmly south and hovering around directionless longer ones. Finally, technical indicators advance, although within negative levels, falling short of supporting a continued advance.

Support levels: 2,340.20 2,325.30 2,307.10

Resistance levels: 2,358.40 2,372.90 2,384.15

XAU/USD Current price: $2,354.27

• Gold recovered some of the ground lost last week amid persistent US Dollar interest.
• The focus this week is on the US Personal Consumption Expenditures Price Index.
• XAU/USD struggling to extend gains in the near term, still under bulls’ control.

Gold prices are up on Monday, with XAU/USD trading at around $2,355 after the European close. The bright metal extended its Friday recovery when it slid $2,325.30, its lowest in two weeks. The tepid recovery was the result of the persistent weakness of the US Dollar, as investors keep pricing in no rate cuts from the Federal Reserve (Fed) in the upcoming two meetings. The recovery stalled amid the Memorial Day holiday in the United States (US), keeping local markets closed.

The US has a light macroeconomic calendar in the upcoming days, shifting the focus to Friday when the country will publish the April Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge. PCE inflation is foreseen to be stable at 2.7% YoY, while the core annual reading is expected to print at 2.8%, matching the March reading. Finally, the PCE Price Index is expected to have risen 0.3% MoM. Generally speaking, readings below forecast should boost the odds for a soon-to-come rate hike, while the opposite scenario will be understood as a delay in monetary tightening beyond September.

XAU/USD short-term technical outlook

From a technical point of view, the XAU/USD pair seems poised to extend its advance. The daily chart shows that tast week’s slump was enough for the pair to correct overbought conditions, and technical indicators are currently bouncing from their midlines. At the same time, the pair is recovering above a directionless 20 Simple Moving Average (SMA) while the longer moving averages accelerate their advances far below the shorter one, all of which reflects persistent buying interest.

In the near term, however, according to the 4-hour chart, the recovery stalled around a congestion of moving averages, with the 20 SMA heading firmly south and hovering around directionless longer ones. Finally, technical indicators advance, although within negative levels, falling short of supporting a continued advance.

Support levels: 2,340.20 2,325.30 2,307.10

Resistance levels: 2,358.40 2,372.90 2,384.15

The natural gas markets have broken out during the last couple of days to break above the $3.40 level, which of course is an area that has been crucial resistance multiple times in the past. Breaking above that level also represents that the market is breaking out of a major resistance level and consolidation area. The consolidation area measures for a move of $1.00 suggesting that we could go as high as $4.40 above. All things being equal, this is a market that I think continues to see a lot of volatility but given enough time I do think that we are at the very least going to go looking towards the $4.00 level above.

NATGAS Video 28.06.21

At this point in time, the market probably has a significant amount of support underneath, especially as the 50 day EMA is sitting just above the $3.00 level, which is an area that is important as well. We are clearly accelerating to the upside so now that we are in an impulsive stage, which means that the gains could come rather rapidly. With that in mind, the market is likely going to continue to see a lot of momentum jumping into the picture, so I think at this point if we do get a certain amount of a pullback, it will be limited at best.

With the heatwave out west, it does suggest that we will have more demand in the short term, but from a longer-term standpoint it is obvious that the market is still oversupplied from a structural standpoint, so I think it is only a matter of time before we fall apart. This is as much a “knock on effect” of the commodity boom than anything else and will be the first place we see cracks in it.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

Early Week Surge and Mid-Week Pullback

Silver began last week with strong gains, fueled by factors such as U.S. interest rate cut expectations, China’s economic stimulus, and geopolitical tensions. This momentum propelled silver to an 11-year peak. However, the rally lost steam as traders engaged in profit-taking following the release of hawkish Federal Reserve minutes. Economic data released on Thursday further supported the likelihood of delayed rate cuts, contributing to the swift retreat in prices.

Inflation Report in Focus

The upcoming release of the core personal consumption expenditures (PCE) price index on Friday is garnering significant attention. As the Federal Reserve’s preferred inflation gauge, its results could heavily impact silver prices. Historically, silver acts as a hedge against inflation, but its appeal diminishes when interest rates rise, increasing the opportunity cost of holding the metal.

Technical Analysis and Market Sentiment

If U.S. economic data continues to exceed expectations, silver prices may face further declines. Recently, bullish sentiment has weakened, with some investors liquidating positions or turning bearish. This shift is influenced by the Federal Reserve’s commitment to maintaining higher interest rates for a prolonged period.

Fed’s Outlook and Market Reactions

Minutes from the Federal Reserve’s latest meeting indicated that reaching the 2% inflation target might take longer than anticipated. This has moderated market expectations for rate cuts, with traders now assigning only a 62% probability of a rate reduction by November 2024, according to the CME FedWatch Tool.

Market Forecast

Given the current market situation, the outlook for silver remains cautious. While technical indicators suggest room for a downside correction, the upcoming inflation report and ongoing economic data will be pivotal in determining short-term price movements. Traders should prepare for potential volatility and monitor key support levels closely.

Technical Analysis

At 09:18 GMT, XAU/USD is trading $2344.66, up $10.66 or +0.46%.

Inflation Report in Focus

The upcoming release of the core personal consumption expenditures price index (PCE) on Friday has the market’s attention. This index is the U.S. Federal Reserve’s preferred inflation measure and its results could significantly influence gold prices. Historically, gold serves as a hedge against inflation, but the appeal of non-yielding gold diminishes when interest rates are higher, as it raises the opportunity cost of holding the metal.

Technical Analysis and Market Sentiment

Technical indicators suggest gold might drop further into the $2,313.07 to $2,277.34 range, potentially triggering a technical bounce. However, if U.S. economic data continues to outperform expectations, the decline in gold prices may extend. Recently, bullish sentiment has waned, with some investors liquidating positions or turning bearish. This shift is influenced by the Federal Reserve’s persistent stance on maintaining higher interest rates for an extended period.

Fed’s Outlook and Market Reactions

Minutes from the Federal Reserve’s latest meeting indicated that achieving the central bank’s 2% inflation target could take longer than anticipated. This has tempered market expectations for rate cuts, with traders now predicting only a 62% chance of a rate reduction by November 2024, according to the CME FedWatch Tool.

Market Forecast: Bearish Outlook

Given the current market conditions and the Federal Reserve’s stance, the outlook for gold remains bearish in the short term. The potential for further interest rate hikes and strong U.S. economic data could continue to pressure gold prices downward. Traders should remain cautious, as the upcoming inflation data could trigger further volatility in the market.

Crude Oil is a naturally occurring liquid fossil fuel resulting from plants and animals buried underground and exposed to extreme heat and pressure. Crude oil is one of the most demanded commodities and prices have significantly increased in recent times. Two major benchmarks for pricing crude oil are the United States’ WTI (West Texas Intermediate) and United Kingdom’s Brent. The differences between WTI and Brent include not only price but oil type as well, with WTI producing crude oil with a different density and sulfur content. The demand for crude oil is dependent on global economic conditions as well as market speculation. Crude oil prices are commonly measured in USD. Although there have been discussions of replacing the USD with another trade currency for crude oil, no definitive actions have been taken.

Production Response to High Prices

Natural gas futures fell by approximately 7% on Thursday, retreating from a four-month high. This decline was primarily attributed to indications that high prices have incentivized drillers to increase production. Despite the drop, a federal report revealed lower-than-expected gas storage injections. The U.S. Energy Information Administration (EIA) reported a 78 billion cubic feet (bcf) addition to storage for the week ending May 17, below the forecasted 85 bcf and the five-year average of 91 bcf. Nevertheless, storage levels remain 29% above the seasonal norm.

Texas Power Demand and Weather Impact

In Texas, power usage was on track to set a new record for May due to a heatwave, potentially escalating over the Memorial Day weekend. This surge in electricity demand is driven by increased air conditioning use. Concurrently, U.S. government forecasters have predicted an “extraordinary” 2024 Atlantic hurricane season, which could further influence energy demand and supply dynamics.

Negative Spot Market Prices

In the spot market, next-day power prices at the Palo Verde hub in Arizona and the South Path-15 in Southern California remained negative for a second day this week. Negative prices have been a recurring theme in 2024, especially in Texas, Arizona, and California. Palo Verde prices have averaged below zero 16 times this year, while SP-15 prices have hit negative territory 13 times, a stark contrast to previous years.

Supply and Demand Factors

According to financial firm LSEG, natural gas output in the Lower 48 states has averaged 97.4 bcf per day (bcfd) so far in May, down from April’s 98.2 bcfd and significantly below December 2023’s record of 105.5 bcfd. Daily production, however, has increased by about 0.9 bcfd since early May, as higher futures prices encouraged increased drilling. Despite this uptick, overall production is down around 8% in 2024 due to previous cutbacks by major producers like EQT and Chesapeake Energy.

Market Forecast

Looking ahead, the market is showing bearish signs as increased production may outpace demand, particularly with milder weather conditions expected in the northern U.S. However, high temperatures in the southern U.S. and potential disruptions from the hurricane season could add volatility. Gas demand is projected to ease from 92.5 bcfd this week to 91.6 bcfd next week, while LNG export flows have risen, which could offer some support to prices.

Given these factors, the natural gas market is likely to remain under pressure in the short-term.

Natural gas prices moved lower on Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for inventories to rise by 104 Bcf according to Estimize. Last week inventories rose less than expected for the first time in a month. Still the trajectory of the inventory rise, and high levels of production along with near tariffs on LNG sent to China should cap prices.

Technical Analysis

Natural gas prices moved lower on Wednesday, falling 2.14% ahead of Thursday’s inventory report. Supoprt is seen near the 10-day moving average at 2.59. Resistance is seen near the 50-day moving average at 2.67. Prices might be forming a bottom. A smaller than expected rise in inventories could give prices the lift needed to pierce resistance. Short-term momentum has turned negative. The fast stochastic has generated a crossover sell signal in overbought territory. The current reading on the fast stochastic is 65, which is on the upper end of the neutral range. Medium term momentum is flat as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which points to consolidation.

The EIA Reports that LNG Exports Declined

The EIA reported that US LNG exports dipped last week. They quote Bloomgerg in saying that 7-LNG vessels with a combined LNG-carrying capacity of 24.5 Bcf departed the United States from May 2 to May 8. A total of three vessels one at each terminal were loading at Sabine Pass, Corpus Christi, and Cove Points. China announced that beginning June 1, a tariff on LNG imported from the United States would carry a 25% tariff. This is killing the LNG industry, which relies on Asian imports to make their business profitable. LNG imports into the US are small scale, as the worlds largest natural gas producer. The tariffs will reduce Asian demand and cap prices of LNG.

This article was originally posted on FX Empire

More From FXEMPIRE: