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5 08, 2024

XAU/USD downside appears capped whilst above $2,410

By |2024-08-05T12:09:26+03:00August 5, 2024|Forex News, News|0 Comments


  • Gold price is under pressure amid intense risk aversion-led ‘sell-everything mode’.
  • US jobs data fuelled recession fears and aggressive Fed rate cut bets and, hurting the US Dollar and Treasury bond yields.
  • Expectations of an imminent Israel-Iran war keep Gold price downside checked.
  • Gold price remains poised to retest lifetime highs at $2,484, US ISM Services PMI awaited.   

Gold price remains on the defensive for the third day in a row, kicking off the week cautiously early Monday. Gold traders are now looking for more US economic data, including the ISM Services PMI due later Monday for fresh trading impetus.

Gold struggles despite Middle East escalation, dovish Fed bets

Despite risk-off sentiment in full swing in Asian trading on Monday, Gold price struggles to benefit, as markets resort to ‘sell everything’ mode. Risk-aversion is mainly triggered by growing concerns that the US economy is headed for recession, in the aftermath of a weak jobs report on Friday.

Nonfarm payrolls increased by 114,000 jobs last month after rising by a downwardly revised 179,000 in June, the US Bureau of Labor Statistics (BLS) said on Friday. The Unemployment Rate climbed to 4.3% from 4.1% in June while the Labor Force Participation Rate advanced slightly to 62.7% from 62.6%.

Mounting US recession fears prompted markets wager aggressive US Federal Reserve (Fed) easing in September. Markets are predicting 115 bps of cuts this year, with traders pricing in a 74% chance of the Fed lowering rates by 50 bps in September, compared to an 11.5% chance a week earlier, according to the CME FedWatch tool.

Risk-aversion heightened in Asia also after US Secretary of State Tony Blinken during the G7 meeting on Sunday that an attack by Iran and Hezbollah against Israel could start as early as Monday, Axios reported, citing three sources.

The US S&P 500 futures, a risk barometer, are down 0.55% on the day, as of writing. Asian markets are on a downward spiral, led by a 6% slump in the Japanese Nikkei 225 index.

Dovish Fed expectations are offsetting the risk-off mood, not allowing the US Dollar to attract some haven buying. The US Treasury bond yields also extend the previous week’s downtrend, weighing further on Greenback.

In light of a broad US Dollar weakness and negative US Treasury bond yields, the Gold price downside appears capped. Dovish Fed expectations will continue to underpin the non-interest-rate-bearing Gold price in the near term.

However, traders turn cautious and refrain from placing fresh bets on the bright metal in the lead-up to the ISM Services PMI data release while closely monitoring the developments on the Middle East geopolitical tensions. The headline ISM Services PMI is set to rise to 51.0 in July from June’s 48.8.

Meanwhile, US President Joe Biden will convene the National Security Council on Monday to discuss developments in the Middle East.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price needs a daily candlestick close above the previous record highs of $2,450 to successfully resume the uptrend toward the lifetime highs of $2,484, reached on July 17.

Ahead of that, Friday’s high of $2,478 could be challenged, if buyers regain poise.

The 14-day Relative Strength Index (RSI) is holding steady while above the 50 level, currently near 60, suggesting that the bullish potential remains in place for Gold price.

Conversely, Gold sellers need to crack the 21-day Simple Moving Average (SMA) at $2,411 to carve a sustained downside. Additional declines could challenge the confluence support near $2,370, where rising trendline support meets with the 50-day SMA.

Gold FAQs

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.

 



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5 08, 2024

Spot activity slows across global copper market

By |2024-08-05T10:07:50+03:00August 5, 2024|Forex News, News|0 Comments


Asia

Spot activities were limited for copper cathode units heading into the Chinese and Southeast Asian markets in the week to Tuesday June 25, with many participants in Asia leaving for the London Metals Exchange’s LME Asia Week in Hong Kong on Thursday June 27.

Fastmarkets assessed the daily benchmark copper grade A cathode premium, cif Shanghai at $(20)-0 per tonne on Tuesday, flat on a weekly basis.

Fastmarkets assessed the weekly copper grade A cathode premium, cif Southeast Asia at $50-65 per tonne on Tuesday, unchanged from a week prior.

Overall trading sentiment stayed low, with participants gathering in Hong Kong for more direction in spot trading, Fastmarkets learned.

“All traders are being hit badly at current market price level, which is unprecedently at discounts, and demand in China stays weak,” a trader from Shanghai said in Hong Kong.

“The market is so bad, [and] people are looking for some ‘comfort’ by talking to peers, with no one making money under current conditions,” a second trader from Singapore said.

In the equivalent-grade (EQ) copper cathodes market, minimal spot activity was noted in both the Shanghai and Southeast Asian copper markets, Fastmarkets learned.

Fastmarkets assessed the weekly copper EQ cathode premium, cif Shanghai at $(60)-(50) per tonne on Tuesday, narrowing upwards from $(70)-(50) per tonne week on week.

Fastmarkets’ assessment of the weekly copper EQ cathode premium, cif Southeast Asia was at $(20)-(10) per tonne on the same day, unchanged from a week prior.

Europe

The European copper market was quiet, with sources noting poor demand and slow summer conditions.

“The cathode market is very quiet,” one producer source said, adding that demand was weak.

Fastmarkets’ fortnightly assessment of the copper grade A cathode premium delivered Germany was $190-210 per tonne, unchanged this session.

Participants noted that the market continued to be quiet, with high borrowing costs and approaching summer holidays.

Some sources noted that lower LME prices had added a little extra demand.

“It is quiet, but not as quiet as last month,” one trader source said, noting a slight increase in demand due to LME prices coming off.

Fastmarkets’ fortnightly assessment of the copper grade A cathode premium, cif Leghorn was $130-160 per tonne on Tuesday, unchanged from the previous session.

Fastmarkets’ fortnightly assessment of the copper grade A cathode premium, cif Rotterdam was $120-135 per tonne June 25, flat from the week before.

Import markets into Europe remained quiet and disrupted, with a large amount of liquidity heading to the US due to better premiums and also higher exchange prices, according to sources.

“The market is still a bit disrupted with material being shipped to the US,” a second trader said.

Sources noted there was little liquidity due to low demand and a wide spread between selling and buying interest levels.

The fortnightly copper EQ cathode premium, cif Europe was assessed at $90-100 per tonne, unchanged from the assessment prior.

United States

Sources agreed that there is not much activity in the market, which appears to be stabilizing after May’s historic highs.

One seller said the market “has stabilized for now, which I don’t think we have seen since pre-COVID days.”

But “there are some early warning signs that the market is looking to soften, so some renewed volatility showing by or before mid-July would not be a huge surprise,” they added.

“There has not been much activity in the market,” another trader said.

All source assessments were within the previous week’s range, with market activity confirmed on the high end.

The copper grade 1 cathode premium, ddp Midwest US remained flat at 10-14 cents per lb on Tuesday, unchanged since June 11.

LME copper inventory has risen by 51% so far in June; now at 175,475 tonnes from 116,000 tonnes at the beginning of the month.

Despite a stronger dollar weighing on the commodities complex, the LME three-month copper contract edged higher on Wednesday.

Inform your base metals strategy with metals price forecasts and analysis for the global base metals industry. Get a free sample of our base metals price forecast today.



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5 08, 2024

Palladium Price Update: H1 2024 in Review

By |2024-08-05T08:06:03+03:00August 5, 2024|Forex News, News|0 Comments


The palladium price has experienced a great deal of volatility in 2024, starting the year at US$1,096 per ounce on the back of a long-term downward trend that began all the way back in 2022.

The metal declined steeply through the first two months of 2024, reaching a yearly low of US$859.15 on February 9. However, palladium saw momentum in March, trending upward alongside gold, silver and platinum.

At the start of April, the price of palladium was US$996.28, and it quickly accelerated to reach a year-to-date high of US$1,098 on April 9. However, the metal once again pulled back after hitting that level, plunging below the US$900 mark at the start of June. Palladium then surged to end the second quarter at US$963.50 on June 28.

The price has since regressed again, approaching a near yearly low of US$881 on July 29. Read on to learn what’s been driving palladium so far this year, and what factors may impact its performance moving forward.

Auto sector demand key for palladium price

Palladium and platinum are both used for investment, but have important industrial uses that claim the majority of demand. Auto sector demand has a strong impact on palladium in particular as it has few other uses.

According to a May report from the World Platinum Investment Council (WPIC), auto demand for palladium will remain steady in 2024 at 8.45 million ounces, while demand from all sources is projected to be 10.03 million ounces.

Palladium price chart, January 1 to July 30, 2024.

Chart via Trading Economics.

The WPIC is expecting palladium mine supply to remain relatively stable, with around 6.5 million ounces per year entering the market over the next five years. Meanwhile, the organization predicts that palladium recycling supply will increase from 2.64 million ounces in 2024 to 3.83 million ounces in 2028.

Overall, the WPIC is calling for palladium demand to outstrip supply in 2024 by 1.28 million ounces, and by 234,000 ounces in 2025 before entering surplus territory.

What factors drove palladium supply and demand in H1 2024?

The WPIC says the increase in recycled palladium supply is coming as a higher number of “PGM-rich vehicles” reach the end of their lives. These are expected to boost annual palladium recycling by over 1.3 million ounces by 2028.

Because platinum and palladium are interchangeable, manufacturers will often swap one out for the other as they try to find the best price. After breaking above US$3,000 in February 2022, palladium has been on a downward slide as auto manufacturers did exactly that, opting to use platinum, which was trading at around the US$1,000 per ounce level.

Though the two metals are now trading at near parity, there hasn’t been any desire to swap the two, even as platinum begins to edge higher. These dynamics are creating further headwinds in the palladium market.

In a mid-July platinum-group metals webinar hosted by CPM Group, Rohit Savant, CPM’s vice president of research, explained that given the costs associated with changing chemistries, the disparity between palladium and platinum prices will need to increase and be sustained before manufacturers consider a swap.

Savant went on to say that even though vehicle sales are expected to remain strong in 2024, gas-powered cars continue to lose market share to electric vehicles (EVs), which don’t require palladium.

This has been particularly impactful in the Chinese market, where there is higher EV demand.

“Even though you are seeing a substantial increase in vehicle sales, it may not necessarily translate into stronger demand for palladium,” Savant commented during the webinar. “That’s primarily because of the ongoing strength in the EV market share in China, and also the government incentivizing the Chinese market to either buy EVs or to buy smaller passenger vehicles, both of which are not supportive of palladium demand.”

What will happen to the palladium price in 2024?

Although some palladium demand comes from electronics production and investment, the auto industry is the metal’s primary driver. As increased recycling and higher supply begin to take hold, the price is not likely to increase; in addition, substitution isn’t likely to occur unless the price of platinum rises more substantially.

However, while near-term prospects don’t look strong, palladium’s low price may provide less risk-averse investors with opportunities, especially if the precious metal’s price continues to retreat.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.

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5 08, 2024

XAG/USD posts fresh weekly high at $29.20 as US labor market cools down

By |2024-08-05T05:59:36+03:00August 5, 2024|Forex News, News|0 Comments


  • Silver price refreshes weekly high at $29.20 as weak US NFP data sends US yields down.
  • The US NFP report showed that labor demand has slowed and wage growth has softened.
  • Investors see the Fed pivoting to policy normalization in September.

Silver price (XAG/USD) posts a fresh weekly high at $29.20 in Friday’s North American trading hours. The white metal gains as US yields sink after the United States (US) Nonfarm Payrolls (NFP) report for July showed signs of cooling labor market conditions.

10-year US Treasury yields witness a bloodbath and dives to multi-month low near 3.82%. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, plunges below 103.30. Lower yields on interest-bearing assets bode strongly for the Gold price as they reduce the opportunity cost of investment in non-yielding assets.

The report showed that labor demand has softened as number of individuals hired by employers in July came in lower at 114K than estimates of 175K and June’s reading of 179K. The Unemployment Rate jumps to 4.3%, the highest since November 2021, from expectations and the prior release of 4.1%. The report clearly indicates that the labor market struggles to bear the consequences of higher interest rates by the Federal Reserve (Fed).

Meanwhile, Average Hourly Earnings have also grown at a slower pace, pointing to a slowdown in consumer spending that eventually cools down inflationary pressures. Annually, the wage growth measure decelerated at a faster-than-expected pace to 3.6%. While the labor market has cooled down, it will add to reasons prompting expectations of sooner rate cuts by the Fed. The Fed is widely anticipated to start reducing interest rates from the September meeting.

Silver technical analysis

Silver price breaks above the horizontal resistance plotted from June 13 low at $28.66 on a four-hour timeframe, which has become a support now. The asset climbs above the 50-period Exponential Moving Average (EMA) near $28.70, suggesting that the near-term trend is upbeat.

The 14-period Relative Strength Index (RSI) moves higher to near 60.00. If the RSI breaks above 60.00, the momentum will shift to the upside.

Silver four-hour chart

Silver FAQs

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

 



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30 07, 2024

XAU/USD consolidates just below the $2,400 mark

By |2024-07-30T23:00:21+03:00July 30, 2024|Forex News, News|0 Comments


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XAU/USD Current price: $2,392.25

  • Encouraging United States macroeconomic data fell short of triggering action.
  • The focus remains on central banks, with the Bank of Japan and the Federal Reserve coming up.
  • XAU/USD extends its consolidative phase, buyers paused but retain control.

Gold price struggles to regain the $2,400 mark on Tuesday, hovering just below the threshold with a modest intraday positive tone. XAU/USD trades rangebound as speculative interest assesses news from the United States (US) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.

Meanwhile, the US Bureau of Labor Statistics (BLS) released the June Job Openings and Labor Turnover Survey (JOLTS) report, which showed that openings on the last business day of the month stood at 8.184 million, below the upwardly revised 8.23 million posted in May. Additionally, the  Conference Board (CB) revealed that the Consumer Confidence Index rose in July to 100.3 from a downwardly revised 97.8 in June.

Anyway, the focus remains on upcoming central banks’ decisions. Ahead of the Asian opening, market talks suggest the Bank of Japan (BoJ) could discuss raising rates to 0.25%. Expectations also point to a reduction in government bond purchases. The one thing clear is that the BoJ can no longer remain on hold.

Later on Wednesday, the Fed will take the stage. The US central bank is widely anticipated to keep interest rates unchanged, although market participants hope policymakers will provide clues on a September rate cut. Ever since Chairman Jerome Powell adopted a more dovish speech, hopes for two interest rate cuts before year-end have skyrocketed.

XAU/USD short-term technical outlook  

From a technical point of view, the bearish potential for XAU/USD seems limited. In the daily chart, the pair is trading just below a still bullish 20 Simple Moving Average (SMA) while the longer moving averages maintain their upward slopes far below the current level. Technical indicators, in the meantime, remain directionless just above their midlines, as the bright metal remains confined to a tight range for a second consecutive day.

In the near term, and according to the 4-hour chart, XAU/USD is neutral-to-bullish. The pair is trading just above the 50% Fibonacci retracement of the June/July rally at $2,388.25 while still contained between directionless moving averages. However, technical indicators have picked up modestly within positive levels, skewing the risk to the upside.

Support levels: 2,388.25 2,366.30 2,353.00

Resistance levels: 2,403.10 2,418.15 2,431.30

XAU/USD Current price: $2,392.25

  • Encouraging United States macroeconomic data fell short of triggering action.
  • The focus remains on central banks, with the Bank of Japan and the Federal Reserve coming up.
  • XAU/USD extends its consolidative phase, buyers paused but retain control.

Gold price struggles to regain the $2,400 mark on Tuesday, hovering just below the threshold with a modest intraday positive tone. XAU/USD trades rangebound as speculative interest assesses news from the United States (US) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.

Meanwhile, the US Bureau of Labor Statistics (BLS) released the June Job Openings and Labor Turnover Survey (JOLTS) report, which showed that openings on the last business day of the month stood at 8.184 million, below the upwardly revised 8.23 million posted in May. Additionally, the  Conference Board (CB) revealed that the Consumer Confidence Index rose in July to 100.3 from a downwardly revised 97.8 in June.

Anyway, the focus remains on upcoming central banks’ decisions. Ahead of the Asian opening, market talks suggest the Bank of Japan (BoJ) could discuss raising rates to 0.25%. Expectations also point to a reduction in government bond purchases. The one thing clear is that the BoJ can no longer remain on hold.

Later on Wednesday, the Fed will take the stage. The US central bank is widely anticipated to keep interest rates unchanged, although market participants hope policymakers will provide clues on a September rate cut. Ever since Chairman Jerome Powell adopted a more dovish speech, hopes for two interest rate cuts before year-end have skyrocketed.

XAU/USD short-term technical outlook  

From a technical point of view, the bearish potential for XAU/USD seems limited. In the daily chart, the pair is trading just below a still bullish 20 Simple Moving Average (SMA) while the longer moving averages maintain their upward slopes far below the current level. Technical indicators, in the meantime, remain directionless just above their midlines, as the bright metal remains confined to a tight range for a second consecutive day.

In the near term, and according to the 4-hour chart, XAU/USD is neutral-to-bullish. The pair is trading just above the 50% Fibonacci retracement of the June/July rally at $2,388.25 while still contained between directionless moving averages. However, technical indicators have picked up modestly within positive levels, skewing the risk to the upside.

Support levels: 2,388.25 2,366.30 2,353.00

Resistance levels: 2,403.10 2,418.15 2,431.30



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30 07, 2024

XAU/USD accelerates south after losing $2,400

By |2024-07-30T08:50:55+03:00July 30, 2024|Forex News, News|0 Comments


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XAU/USD Current price: $2,378.85

  • Financial markets turn cautious ahead of central banks’ announcements.
  • The Federal Reserve is likely to pave the way for a September rate cut this week.
  • XAU/USD tunrned neutral-to-bearish in the near term, critical support at $2,366.

Spot Gold turned south after Wall Street’s opening and after spending the first half of the day consolidating just below $2,400. XAU/USD fell towards $2,369.57 and trades nearby as investors gear up for critical events spread throughout the week. Financial markets started the week with a firm footing, with Asian stocks posting substantial gains. European indexes, on the contrary, lost ground, leading to a tepid performance among their United States (US) counterparts.

US indexes hold on to modest intraday gains at the moment, with speculative interest focused on upcoming earnings reports and central banks’ decisions. The Bank of Japan (BoJ) will announce its decision on monetary policy early on Wednesday, followed later in the day by the US Federal Reserve (Fed). Finally, the Bank of England (BoE) will unveil its decision on Thursday.

Ahead of the announcements, financial markets are pricing in some adjustments. The BoJ is foreseen to reduce the monthly purchases of Japan Government Bonds (JGB), while the Fed is likely to pave the way for a September cut. As for the BoE, market players anticipate a 25 basis point (bps) rate cut.

XAU/USD short-term technical outlook  

The daily chart for XAU/USD shows the risk skews to the downside, although additional confirmation is required. The bright metal trades below a still bullish 20 Simple Moving Average (SMA), but technical indicators turned back south within neutral levels. At the same time, the pair is approaching the 61.8% Fibonacci retracement of its  June/July run at $2,366.30, the immediate support level. The 50% retracement at 2,403.10 acts as near-term resistance.

Technical readings in the 4-hour chart offer a neutral-to-bearish stance. XAU/USD is currently trading below a bearish 20 SMA, while a mildly bearish 200 SMA reinforces the support at around $2,366.00. Technical indicators, in the meantime, lack directional strength, with the Relative Strength Index (RSI) indicator currently consolidating at around 42, skewing the risk to the downside without confirming it.

 

Support levels: 2,366.30 2,353.00 2,339.65

Resistance levels: 2,388.25 2,403.10 2,418.15

XAU/USD Current price: $2,378.85

  • Financial markets turn cautious ahead of central banks’ announcements.
  • The Federal Reserve is likely to pave the way for a September rate cut this week.
  • XAU/USD tunrned neutral-to-bearish in the near term, critical support at $2,366.

Spot Gold turned south after Wall Street’s opening and after spending the first half of the day consolidating just below $2,400. XAU/USD fell towards $2,369.57 and trades nearby as investors gear up for critical events spread throughout the week. Financial markets started the week with a firm footing, with Asian stocks posting substantial gains. European indexes, on the contrary, lost ground, leading to a tepid performance among their United States (US) counterparts.

US indexes hold on to modest intraday gains at the moment, with speculative interest focused on upcoming earnings reports and central banks’ decisions. The Bank of Japan (BoJ) will announce its decision on monetary policy early on Wednesday, followed later in the day by the US Federal Reserve (Fed). Finally, the Bank of England (BoE) will unveil its decision on Thursday.

Ahead of the announcements, financial markets are pricing in some adjustments. The BoJ is foreseen to reduce the monthly purchases of Japan Government Bonds (JGB), while the Fed is likely to pave the way for a September cut. As for the BoE, market players anticipate a 25 basis point (bps) rate cut.

XAU/USD short-term technical outlook  

The daily chart for XAU/USD shows the risk skews to the downside, although additional confirmation is required. The bright metal trades below a still bullish 20 Simple Moving Average (SMA), but technical indicators turned back south within neutral levels. At the same time, the pair is approaching the 61.8% Fibonacci retracement of its  June/July run at $2,366.30, the immediate support level. The 50% retracement at 2,403.10 acts as near-term resistance.

Technical readings in the 4-hour chart offer a neutral-to-bearish stance. XAU/USD is currently trading below a bearish 20 SMA, while a mildly bearish 200 SMA reinforces the support at around $2,366.00. Technical indicators, in the meantime, lack directional strength, with the Relative Strength Index (RSI) indicator currently consolidating at around 42, skewing the risk to the downside without confirming it.

 

Support levels: 2,366.30 2,353.00 2,339.65

Resistance levels: 2,388.25 2,403.10 2,418.15



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30 07, 2024

Platinum Price Update: H1 2024 in Review

By |2024-07-30T06:50:22+03:00July 30, 2024|Forex News, News|0 Comments


Platinum prices have been volatile this year despite high demand and an ongoing supply deficit.

After an erosion of platinum stockpiles in 2023 as industrial demand hit record highs, while demand outstripped mine supply by 851,000 ounces. Halfway through 2024, these trends are still playing out.

Read on to find out more about how platinum performed in the first half of this year.

How did platinum perform in H1 2024?

Platinum prices spent much of the first quarter in decline, falling from US$987.50 per ounce on January 1 to a year-to-date low of US$871.67 on February 9. The start of March saw increasing volatility in the platinum market, with prices moving up slightly during the month as prices for gold and silver improved.

Platinum price chart, January 1 to July 29, 2024.

Chart via Trading Economics.

Platinum started the second quarter at US$901.64 and climbed as high as US$980 before pulling back to US$900 by late April. The price ran even higher in May and reached a year-to-date high of US$1,094.50 on May 17.

While platinum prices pulled back again, the floor hit on June 13 was higher this time, at US$949.34.

After climbing above US$1,000 again in late June, platinum ended Q2 at US$994.40 on June 28. The start of Q3 has seen the platinum price fall further, moving as low as US$932.74 on July 25. It was around US$950 as of July 29.

What factors drove platinum demand in H1 2024?

The World Platinum Investment Council’s (WPIC) first quarter update shows that the market was in deficit by 369,000 ounces during the period, with a full-year shortfall of 476,000 ounces forecast.

According to the report, these dynamics are in part due to strong automotive demand, which reached a seven year high in Q1. Platinum has been increasingly substituted for palladium in autocatalysts due to palladium’s high price.

Despite increased demand for platinum from the automotive sector, its use in the coming years is facing headwinds as consumers continue to move to electric vehicles, which don’t require platinum or palladium. To platinum’s benefit, the WPIC notes that market share of battery electric vehicles is now forecast to grow only from 11 percent in 2023 to 14 percent in 2024 — down from the 15 percent initially predicted.

In a mid-July platinum-group metals webinar hosted by CPM Group, Rohit Savant, CPM’s vice president of research, indicated that despite increased platinum demand, the needle on prices hasn’t budged.

Additionally, Savant explained that massive amounts of inventories have built up over the past decade, which has led to “investor reluctance to add metal aggressively to holdings due to risk of loss of demand from the auto sector.”

He noted that these inventories can provide further headwinds when supply and demand fundamentals are not strong, which has been the situation for the past several years.

According to the WPIC, these inventories accounted for 4.1 million ounces at the end of 2023. With forecast deficits, the group is expecting those inventories to fall to 3.62 million ounces by the end of 2024.

Meanwhile, investment demand is changing. Savant noted that 2023 saw platinum exchange-traded funds (ETFS) in decline. This is supported by WPIC data showing that the last half of the year saw more than 215,000 ounces of ETF outflows. Bar and coin demand was relatively stable during the period, with net inflows of 147,000 ounces.

The first quarter of 2024 saw a reversal of this trend, with platinum ETFs adding 11,000 ounces, and bar and coin investment for the precious metal growing by 64,000 ounces.

Savant acknowledged this reversal with data that extends into the second quarter.

“Investors were solid buyers of the metal,” he said. “These investors have been seen buying when prices fall and pulling back when prices rise. This tells us that these investors do not necessarily see too much downside from here, but are still nervous about chasing (the) platinum price higher.”

What factors impacted platinum supply in H1 2024?

Total platinum supply for Q1 was 1.625 million ounces from all sources, marking the second lowest quarterly supply on WPIC records, behind Q2 2020’s 1.3 million ounces. In its report, the WPIC states that it expects supply risks to remain a theme through 2024; it predicts that total mine supply will decrease by 3 percent on an annual basis.

Mine production increased in the first quarter on an annualized basis, rising to 1.24 million ounces from 1.19 million ounces during the same period in 2023. The rise came from higher output from mines in top-producer South Africa, which produced 816,000 ounces versus 778,000 ounces in Q1 2023.

The WPIC data also suggests that recycled supply during the quarter was stable, with 390,000 ounces entering the market, slightly lower than Q1 2023’s 400,000 ounces. The bulk of recycled platinum was generated by autocatalyst recycling, which produced 275,000 ounces of the metal.

What will happen to the platinum price in 2024?

Despite the platinum market imbalance, overall sentiment remains positive. Even as an overhang in stockpiled inventories provides headwinds, the metal still has strong demand from industrial sources.

With the platinum to palladium ratio above 1, some investors are wondering whether automakers will begin to swap palladium for platinum again. However, Savant doesn’t see this materializing until the ratio gets higher.

“The reality is that autocatalyst manufacturers are unable to and do not make changes to autocatalysts and chemistry on the turn of a dime,” he explained during CPM’s webinar.

“There’s a lot of money and time required to make these changes and align them with emission regulations and auto insurance. So it will take a much higher ratio than what we’re seeing, and a ratio that remains consistently high.”

As automotive demand is expected to remain high, potentially allowing inventories to start depleting, the physical market could begin to tighten and provide support for upward price momentum. However, it may be some time before these inventories draw down sufficiently to provide that support.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.

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30 07, 2024

Natural Gas Price Forecast: Eyes Resistance After Bullish Rally

By |2024-07-30T00:45:06+03:00July 30, 2024|Forex News, News|0 Comments


Downtrend Remains Dominant

There is the potential for today’s advance to strengthen further and lead to higher prices. Nevertheless, natural gas remains in a clear downtrend, below both the downtrend line and the 20-Day MA. Downward pressure continues to dominate following last week’s bearish close. On a weekly basis, it completed a bearish shooting star candlestick pattern on the weekly chart (not shown).

Moreover, last week closed at the low of the week and below the previous week’s low of 2.015. This is bearish behavior in that time frame. What this analysis seems to indicate is that, if natural gas bounces higher it remains likely to encounter resistance that turns prices back down for a retest of trend lows and possibly a drop through last week’s low.

Below 1.99 Targets 1.94

If last week’s low is busted to the downside, then natural gas looks to be heading towards a possible support zone from around 1.94 to 1.91. The first price level is a prior minor swing high, while the second completes a 78.6% Fibonacci retracement. Further down is the filling of the gap from April at 1.85, followed 1.83 and 1.80. The 1.80 price level is the middle of the bottom symmetrical triangle pattern, while 1.83 completes a falling ABCD pattern where the CD leg of the decline is twice the price change in the first AB leg.

Resistance Likely at Trendline or 20-Day Line

Today’s high of 2.10 is nearby resistance. If there is a bullish breakout above the high then resistance may be encountered around the downtrend line or 20-Day MA, currently at 2.23. However, last week’s high of 2.27 is a key resistance level as a rally above it will trigger a bullish reversal as a lower swing high comprising the price structure of the downtrend correction would be violated.

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



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29 07, 2024

XAU/USD looks north as a Big week kicks in

By |2024-07-29T10:38:08+03:00July 29, 2024|Forex News, News|0 Comments


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  • Gold price sees a positive start to the week early Monday, $2,400 tested.   
  • US Dollar drops with US Treasury bond yields on dovish Fed bets and risk-on mood.
  • Renewed Middle East concerns underpin the safe-haven Gold price.
  • Gold buyers eye a daily close above 21-day SMA for a sustained recovery.

Gold price is building on its previous recovery early Monday, having defended the key support at $2,360 on a weekly closing basis. Gold buyers fight back control heading into the critical central banks’ bonanza week, with the US Federal Reserve (Fed) – the main event risk for the bright metal.

Gold price kicks off the Fed week on strong footing

The renewed upside in Gold price could be attributed to the extension of Friday’s risk-recovery into Asia, as Asian stocks track the Wall Street rebound amid a bout of profit-taking ahead of a key week.

Risk-flows diminish the appeal of the safe-haven US Dollar while the US Treasury bond yields bear the brunt of increased expectations of a dovish Fed hold this week. Markets are fully pricing in a Fed rate cut in September, according to the CME Group’s FedWatch Tool. Another cut remains on the table for December.

Additionally, over the weekend, fresh tensions in the Middle East spark a flight to safety in the traditional safety net, Gold price, reinforcing the buying interest in the yellow metal.

On Saturday,  12 children and young adults were killed in a rocket strike while playing football in the Israeli-occupied Golan Heights. The Israel Defense Forces (IDF)  blamed the Iran-backed militant group, Hezbollah for the attack, saying that it conducted air strikes against seven Hezbollah targets “deep inside Lebanese territory”.

The rising tensions have the potential to trigger an all-out war between Israel and Hezbollah, which has prompted investors to scurry for safety in Gold price.

On Friday, Gold price staged an impressive rebound from near two-week lows of $2,353 after the Greenback turned south after the core PCE price index data, the Fed’s preferred inflation gauge, steadied at an annual pace of 2.6% in June, driving up optimism that the central bank will begin cutting rates in September. 

Gold markets remain expectant of the potential dovish policy outlook from the Fed and the Bank of England (BoE) later in the week while the developments surrounding the Middle-East geopolitical tensions will remain in focus.  

Gold price technical analysis: Daily chart

Gold buyers jumped back into the game after the bright metal yielded a weekly closing above the key 50-day Simple Moving Average (SMA) at $2,360. At that level, the month-long rising trendline support coincides, making it a strong support.

The 14-day Relative Strength Index (RSI) also reclaimed the 50 level, currently near 52.50, turning the tide back in favor of Gold optimists.

Acceptance above the previous support of the 21-day SMA at $2,392 is needed on a daily closing basis to extend the recovery toward the $2,400 mark.

The next upside targets are seen at the $2,412 area and the $2,425 static resistance.

On the flip side, Gold price needs a daily close below the abovementioned key confluence support at $2,360 to initiate a fresh downtrend toward the 100-day SMA support at $2,327.

Buyers, however, could find some comfort at the $2,350 psychological level.

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.

Next release: Wed Jul 31, 2024 18:00

Frequency: Irregular

Consensus: 5.5%

Previous: 5.5%

Source: Federal Reserve

 

  • Gold price sees a positive start to the week early Monday, $2,400 tested.   
  • US Dollar drops with US Treasury bond yields on dovish Fed bets and risk-on mood.
  • Renewed Middle East concerns underpin the safe-haven Gold price.
  • Gold buyers eye a daily close above 21-day SMA for a sustained recovery.

Gold price is building on its previous recovery early Monday, having defended the key support at $2,360 on a weekly closing basis. Gold buyers fight back control heading into the critical central banks’ bonanza week, with the US Federal Reserve (Fed) – the main event risk for the bright metal.

Gold price kicks off the Fed week on strong footing

The renewed upside in Gold price could be attributed to the extension of Friday’s risk-recovery into Asia, as Asian stocks track the Wall Street rebound amid a bout of profit-taking ahead of a key week.

Risk-flows diminish the appeal of the safe-haven US Dollar while the US Treasury bond yields bear the brunt of increased expectations of a dovish Fed hold this week. Markets are fully pricing in a Fed rate cut in September, according to the CME Group’s FedWatch Tool. Another cut remains on the table for December.

Additionally, over the weekend, fresh tensions in the Middle East spark a flight to safety in the traditional safety net, Gold price, reinforcing the buying interest in the yellow metal.

On Saturday,  12 children and young adults were killed in a rocket strike while playing football in the Israeli-occupied Golan Heights. The Israel Defense Forces (IDF)  blamed the Iran-backed militant group, Hezbollah for the attack, saying that it conducted air strikes against seven Hezbollah targets “deep inside Lebanese territory”.

The rising tensions have the potential to trigger an all-out war between Israel and Hezbollah, which has prompted investors to scurry for safety in Gold price.

On Friday, Gold price staged an impressive rebound from near two-week lows of $2,353 after the Greenback turned south after the core PCE price index data, the Fed’s preferred inflation gauge, steadied at an annual pace of 2.6% in June, driving up optimism that the central bank will begin cutting rates in September. 

Gold markets remain expectant of the potential dovish policy outlook from the Fed and the Bank of England (BoE) later in the week while the developments surrounding the Middle-East geopolitical tensions will remain in focus.  

Gold price technical analysis: Daily chart

Gold buyers jumped back into the game after the bright metal yielded a weekly closing above the key 50-day Simple Moving Average (SMA) at $2,360. At that level, the month-long rising trendline support coincides, making it a strong support.

The 14-day Relative Strength Index (RSI) also reclaimed the 50 level, currently near 52.50, turning the tide back in favor of Gold optimists.

Acceptance above the previous support of the 21-day SMA at $2,392 is needed on a daily closing basis to extend the recovery toward the $2,400 mark.

The next upside targets are seen at the $2,412 area and the $2,425 static resistance.

On the flip side, Gold price needs a daily close below the abovementioned key confluence support at $2,360 to initiate a fresh downtrend toward the 100-day SMA support at $2,327.

Buyers, however, could find some comfort at the $2,350 psychological level.

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.

Next release: Wed Jul 31, 2024 18:00

Frequency: Irregular

Consensus: 5.5%

Previous: 5.5%

Source: Federal Reserve

 



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29 07, 2024

XAU/USD looks north as a Big week kicks in

By |2024-07-29T08:37:09+03:00July 29, 2024|Forex News, News|0 Comments


  • Gold price sees a positive start to the week early Monday, $2,400 tested.   
  • US Dollar drops with US Treasury bond yields on dovish Fed bets and risk-on mood.
  • Renewed Middle East concerns underpin the safe-haven Gold price.
  • Gold buyers eye a daily close above 21-day SMA for a sustained recovery.

Gold price is building on its previous recovery early Monday, having defended the key support at $2,360 on a weekly closing basis. Gold buyers fight back control heading into the critical central banks’ bonanza week, with the US Federal Reserve (Fed) – the main event risk for the bright metal.

Gold price kicks off the Fed week on strong footing

The renewed upside in Gold price could be attributed to the extension of Friday’s risk-recovery into Asia, as Asian stocks track the Wall Street rebound amid a bout of profit-taking ahead of a key week.

Risk-flows diminish the appeal of the safe-haven US Dollar while the US Treasury bond yields bear the brunt of increased expectations of a dovish Fed hold this week. Markets are fully pricing in a Fed rate cut in September, according to the CME Group’s FedWatch Tool. Another cut remains on the table for December.

Additionally, over the weekend, fresh tensions in the Middle East spark a flight to safety in the traditional safety net, Gold price, reinforcing the buying interest in the yellow metal.

On Saturday,  12 children and young adults were killed in a rocket strike while playing football in the Israeli-occupied Golan Heights. The Israel Defense Forces (IDF)  blamed the Iran-backed militant group, Hezbollah for the attack, saying that it conducted air strikes against seven Hezbollah targets “deep inside Lebanese territory”.

The rising tensions have the potential to trigger an all-out war between Israel and Hezbollah, which has prompted investors to scurry for safety in Gold price.

On Friday, Gold price staged an impressive rebound from near two-week lows of $2,353 after the Greenback turned south after the core PCE price index data, the Fed’s preferred inflation gauge, steadied at an annual pace of 2.6% in June, driving up optimism that the central bank will begin cutting rates in September. 

Gold markets remain expectant of the potential dovish policy outlook from the Fed and the Bank of England (BoE) later in the week while the developments surrounding the Middle-East geopolitical tensions will remain in focus.  

Gold price technical analysis: Daily chart

Gold buyers jumped back into the game after the bright metal yielded a weekly closing above the key 50-day Simple Moving Average (SMA) at $2,360. At that level, the month-long rising trendline support coincides, making it a strong support.

The 14-day Relative Strength Index (RSI) also reclaimed the 50 level, currently near 52.50, turning the tide back in favor of Gold optimists.

Acceptance above the previous support of the 21-day SMA at $2,392 is needed on a daily closing basis to extend the recovery toward the $2,400 mark.

The next upside targets are seen at the $2,412 area and the $2,425 static resistance.

On the flip side, Gold price needs a daily close below the abovementioned key confluence support at $2,360 to initiate a fresh downtrend toward the 100-day SMA support at $2,327.

Buyers, however, could find some comfort at the $2,350 psychological level.

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

Read more.

Next release: Wed Jul 31, 2024 18:00

Frequency: Irregular

Consensus: 5.5%

Previous: 5.5%

Source: Federal Reserve

 



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