Natural Gas Price Prediction – Prices Rise Following Inventory Build

Natural gas prices moved higher on Thursday following the Department of Energy’s inventory report. The weather is expected to be colder than normal for the next 2-weeks especially in the mid-west according to the latest weather forecast from the National Oceanic Atmospheric Administration. There are no disturbances that are expected to become tropical cyclones over the next 48-hours according to NOAA.

Technical Analysis

Natural gas prices rallied another 2.65% following Tuesday nearly 7% rise. Support is seen near the 10-day moving average at 2.7. Resistance is seen near the September highs at 3. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn positive as the MACD (moving average convergence divergence) line is poised to generate a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line (the 9-day moving average of the MACD line).

Inventories Rise In Line with Expectations

Natural gas in storage was 3,680 Bcf as of Friday, September 18, 2020, according to the EIA. This represents a net increase of 66 Bcf from the previous week. Expectations were for a 67 Bcf build according to survey provider Estimize. Stocks were 504 Bcf higher than last year at this time and 407 Bcf above the five-year average of 3,273 Bcf. At 3,680 Bcf, total working gas is above the five-year historical range.

Gold Price Prediction – Prices Rebound Following Soft Claims Data

Gold prices whipsawed and moved higher, on Thursday, as the dollar eased slightly after continuing to run higher. US yields moved sideways and weighed on the dollar. The Labor Department reported that jobless claims rose more than expected. Trump was asked if he would commit to a peaceful transfer of power whatever the results, and he replied that he needed to wait and see.

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Technical analysis

Gold prices moved higher on Thursday after breaking down on Wednesday and are poised to test higher levels. Resistance is seen near the 10-day moving average at 1,925. Support is seen near the July lows at 1,779. The 10-day moving average crossed through the 50-day moving average which means a short-term downtrend is in place. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). Short-term momentum is negative as the fast stochastic recently generated a crossover sell signal. The current reading on the fast stochastic is 14, below the oversold trigger level of 20 which could foreshadow a correction.

Jobless Claims Rise More than Expected

US jobless claims rose more than expected to  870,000, according to the Labor Department. Expectations were for initial jobless claims to rise to 850,000, down slightly from the previous week’s 860,000. More than 6 million people a week filed during the peak of the layoffs in the spring, when Congress approved $600 a week in supplemental benefits. The supplemental benefits expired this summer.

Silver Price Forecast – Silver Markets Looking for Support at 22 USD

Silver markets have fallen during most of the trading session for Asia and the European Union but have bounced a bit in US trading. This suggests that perhaps the $22 level is going to offer a bit of support, and if that is going to be the case and if that is going to be the case it would make a certain amount of sense that we get a short-term bounce. That being said, I do not know that it is necessarily time to start buying silver quite yet. I anticipate that we need to see a bit of stability before we get overly excited. With that in mind, I think that it is probably best to sit on the sidelines in the short term, but the US dollar is a bit over bought so a bounce does make a certain amount of sense.

SILVER Video 25.09.20

If we turn around and simply go straight up in the air, although it would be a bullish sign it would also be a bit disconcerting because it also shows an increase in volatility more than anything else. I think at this point we are probably going to see noisy trading at best, and therefore you probably have plenty of time to get involved. I still believe that this market is better supported near the $20 handle, and of course the 200 day EMA. All things being equal, I do think that the longer-term trend is still going to be bullish, but right now we have a lot of concerns and therefore US dollar buying.

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

Crude Oil Price Forecast – Crude Oil Markets Still Quiet

WTI Crude Oil

The West Texas Intermediate Crude Oil markets have done very little during the trading session on Thursday, as we continue to hang around the $40 level, and of course the 50 day EMA. At this point, the market looks as if it is simply trying to figure out where it wants to go next, as the most recent move has been decidedly negative. At this point, the US dollar is a major contributor to where we go next, as the inverse correlation has been very strong. I think at this point in time we are looking for some type of direction that we can hang onto, but it is worth noting that the most recent high was lower than the one before it.

Crude Oil Video 25.09.20

Brent

Brent markets rallied a bit during the trading session but are still struggling with the 50 day EMA. Ultimately, this is a market that looks vulnerable above though, and therefore I will be looking to fade rallies, especially if the US dollar starts to strengthen again. In the short term, it is likely that the US dollar may soften a bit, but it has decidedly switched more to a bullish trend, which works against commodities in general. At this point, I do believe it is only a matter of time before we see a continuation of the breakdown that we started, and if we can clear the $40 level to the downside, it is likely that this market could go much lower. I have absolutely no interest in buying crude oil right now as the global economy is slowing down.

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

Natural Gas Price Forecast – Natural Gas Continues to Show Strength

Natural gas markets have rallied a bit during the trading session on Thursday again, as we start to see demand pick up for natural gas. We are now looking at the November contract, so the prices have adjusted accordingly. We gapped a couple of weeks ago, and now look as if we are reaching towards the $3.00 level, which of course is a large, round, psychologically significant figure. If we break above there, then the market is ready to go much higher.

NATGAS Video 25.09.20

Pullbacks at this point in time will offer value, and the $2.60 level should be thought of as support. Beyond that, we also have a massive amount of support based upon the $2.40 level, so I think that we are a little overbought and you should be looking for pullbacks in order to pick up value. As we head into the colder months of the year obviously demand for natural gas will continue to pick up, and that should drive prices higher. What is worth noticing is the fact that the US dollar has been very strong, but the natural gas markets have been the one commodity that seem to be paying absolutely no attention to it.

Longer-term, I believe that we rally for a couple of months before we start selling off again due to the cyclicality and the seasonality of this market. We have seen a lot of companies go bankrupt, so that of course helps, but there is still plenty of natural gas out there longer term, so this is still a market that will be under pressure next year.

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

Gold Price Forecast – Gold Markets Looking for Stability

Gold markets initially dipped during the trading session on Thursday but bounced enough to show the $1850 level as being somewhat supportive. Because of this, I think that we may get a short-term bounce. I believe that the $1900 level will probably offer resistance, and if we can get a daily close above the 50 day EMA I would be very interested in going long again. Having said all of that, I also recognize that we still are not at a major support level, so I fully anticipate that gold will go looking towards the $1800 level given enough time. It is at the $1800 level that I become very interested in buying gold, because I believe that the proximity of the 200 day EMA and the previous trading action in this area should continue to attract a lot of attention.

Gold Price Predictions Video 25.09.20

Gold will continue to move with risk appetite around the world, so that is worth paying attention to. The US dollar strength has caused a lot of problems in the gold market, but I think that longer-term people will focus on the central banks again, and therefore gold should continue to be something that people by, even if it is in other currencies. All things being equal, I believe it is only a matter of time before we go looking to the upside, but I am not completely convinced that we have found the bottom quite yet. A little bit of patience could go long way and is advised because quite frankly there is no need to be early on this trade, as it is in a longer term uptrend and therefore, we can pick our spots.

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

Oil Stays Strong As Traders Cheer The Recent Rebound Of Gasoline Demand

Oil Video 24.09.20.

Gasoline Demand Rebounds, Providing Support To Oil Prices

WTI oil continues to trade near the $40 level despite the ongoing sell-off in the world markets.

There are several reasons for this strength. First, the recent EIA Weekly Petroleum Status Report indicated that crude inventories decreased by 1.6 million barrels while gasoline inventories fell by 4 million barrels.

Second, EIA reported that gasoline demand continued to increase. In the week ending September 4, 2020, gasoline demand was 8.39 million barrels per day (bpd). Next week, it increased to 8.48 million bpd. The latest data for the week ending September 18, 2020 indicated that gasoline demand increased to 8.52 million bpd.

Previously, traders feared that the continued problems on the coronavirus front and the end of the driving season will put material pressure on gasoline demand.

The recent reports indicate that gasoline demand is showing some strength. It is still well below 9.35 million bpd, a level reached a year ago, but the current trend is positive.

At this point, the optimism about the rebound of gasoline demand was sufficient enough to offset worries about the second wave of the virus in Europe and the negative impact of the stronger U.S. dollar.

However, it remains to be seen whether this optimism will be long-lived as the U.S. domestic oil production will soon recover from the hits dealt by storms and hurricanes so inventories may start to increase again.

California Decided To Ban Gasoline Cars By 2035

The sale of gasoline cars will end in California by 2035 to combat pollution and deal with the climate change. The average age of the car on the U.S. road is almost 12 years so gasoline cars will certainly not disappear in California anytime soon even if the state bans their sale in 2035.

That said, the currents trends are somewhat worrisome for the oil market in the long term as most developed countries are discussing a ban on gasoline cars sometime in the future.

While there’ll be no immediate consequences for the supply/demand balance even if all countries in the world signed a pledge to ban the sale of gasoline cars in 2035, the constant talk about the ban may ultimately impact investors’ desire to invest in oil and oil-related securities.

However, this is the oil market, and the situation can change very fast. If the world oil companies continue to underinvest in new projects, the world may ultimately face a shortage of oil which will lead to much higher prices.

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

Silver Price Daily Forecast – Attempt To Settle Below $22.00

Silver Video 24.09.20.

Silver Continues To Lose Ground Amid Strong U.S. Dollar And Fears About The Pace Of Economic Recovery

Silver made an attempt to settle below the $22 level as the U.S. Dollar Index moved closer to the nearest resistance level at 94.65.

The U.S. dollar got an additional boost after the release of disappointing U.S. employment reports. Initial Jobless Claims increased to 870,000 while Continuing Jobless Claims fell to 12.58 million. Both reports were worse than the analyst consensus and provided support to the American currency which has recently regained its status of a safe haven asset of last resort.

Strong U.S. dollar is a bearish catalyst for silver and other precious metals so the continuation of the dollar’s upside move will likely push silver to lower levels.

Gold is also under pressure. Currently, gold is testing the $1850 level. The nearest significant support for gold is located at $1815. If gold moves towards this level, silver will find itself under increased pressure.

Meanwhile, gold/silver ratio continues its major upside move. Just a few days ago, gold/silver ratio was firmly settled in the range between 71 and 73. Currently, it is trying to get above 84. Gold/silver ratio’s RSI has entered into the overbought territory so chances of a pullback are increasing. If gold/silver ratio moves towards 80, silver will have an opportunity to gain some upside momentum.

Technical Analysis

silver september 24 2020

Silver managed to settle below the nearest support level at $22.30 and continues its downside move. Currently, it is trying to settle below $22.00. If this attempt is successful, silver will head towards the next support at the recent lows at $21.65.

If silver gets below the support at $21.65, it will develop additional downside momentum and head lower. There are no material levels between $22.30 and $20.00 so silver may get to $20.00 quickly in case the right catalysts emerge.

At the same time, RSI has moved into the oversold territory, suggesting that a rebound may be around the corner.

The previous support at $22.30 will likely serve as the first resistance level for silver. A move above this level will open the way to the test of the next resistance at $22.90, which is followed by the resistance at $23.30.

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

Gold Declines Below $1,900 amid Stronger Corona and Dollar

The gold price dropped below $1,900 amidst Covid-19 cases increases in the West and the US dollar appreciation. So, what happens next with the yellow metal?

For the time being, things are not looking good, my bull friends. The bearish trend in the gold market continues. As the chart below shows, we saw a significant selloff on Monday with gold prices decreasing from above $1,950 to $1,909. To make matters worse, the decline continued on Tuesday and Wednesday, with the price of gold dropping below the critical level of $1,900, for the first time since the end of July.

So, what exactly happened here? Well, as we wrote in Tuesday’s Fundamental Gold Report, the coronavirus just came back with another wave. As pointed out in the chart below, the daily new confirmed Covid-19 cases are increasing again in several European countries, and the United States.

Yes, even the U.K. Prime Minister Boris Johnson has already introduced some new restrictions, including 10 p.m. curfews for pubs and restaurants in England. Can you imagine pubs in England opened only until 10 p.m. – that’s not just a crisis, it’s a disaster!

As a result, the recent Covid-19 cases resurgence renewed the global concerns about the reinstatement of lockdowns or other constraining measurements that can hamper the pace of the economic recovery (I warned you that there is no point in expecting a V-shaped rebound). This anxiety caused was the main reason behind the recent stock market declines, pushing down the S&P 500 and Dow Jones from 3319 and 27657 to 3281 and 27148, respectively (see the chart below).

Moreover, the negative market sentiment intensified U.S. dollar’s safe-haven demand, which rose to the two-months high. Consequently, the EUR/USD exchange rate dropped to a two-months low of $1.1671 on Wednesday morning.

Although the new cases are increasing in America, infections are spreading incredibly rapidly in Europe, strengthening the greenback‘s position against the euro. The recent cases resurgence across Europe have coincided with the weak economic Eurozone indicators: for example, the business growth ground to a halt in September.

Implications for Gold

So, what does the above mean for the gold market? Well, the renewed global concerns about the second Covid-19 wave of infections, primarily in Europe, along with its economic implications, pushed investors toward the US dollar. It is all normal – in every crisis, cash is always the king. But in a global or European crisis such as the current one, the greenback is the tsar.

Several other risks have accumulated recently. Let’s not forget that the U.S. presidential elections are quickly approaching. It is likely that the elections’ results will be disputed, as Trump already suggested that mail-in voting could be rigged. Moreover, the fight over Supreme Court Justice Ruth Bader Ginsburg’s successor adds up another volatile element, as it decreases the chances of a quick deal on the new stimulus measurements. You see, if Trump manages to install a conservative replacement in time, the new judge could help resolve any dispute in his favor. These risks supported the US dollar, which put downward pressure on the gold prices as a result.

Therefore, the market sentiment is clearly bearish right now, and it appears that the yellow metal needs a real spark to reenter a bullish trend. Indeed, it seems that both the stock and gold market await patiently for the upcoming fiscal and monetary stimuli. Unfortunately for the gold bulls, the market expectations for a new Congress or the Fed support have declined in recent days. That is why the fears about the second wave of infections and the renewed sanitary restrictions are so acute – there is no government or central bank’s help on the horizon that can protect and solidify the economy.

But still, gold bulls shouldn’t give up. Remember the first wave of the pandemic? Gold also plunged, only to soar afterward, resulting in a record high. The fundamental outlook for gold is still bullish: the real interest rates are negative, the public debt is ballooning, while the Fed’s monetary policy is very dovish. Although right now, both the Congress and the central bank could potentially disappoint investors, they will have no choice but to provide additional support as they always do indulge the Wall Street – and, although somewhat unintentionally, gold bulls.

If you enjoyed today’s free gold report, we invite you to check out our premium services for richer information. We provide much more comprehensive fundamental gold market analyses in our monthly Gold Market Overview reports, and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. To enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet, but you are not on our gold mailing list yet, we urge you to sign up there as well for daily yellow metal updates. Sign up now!

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

Arkadiusz Sieron, PhD
Sunshine Profits: Analysis. Care. Profits.

 

Gold Price Futures (GC) Technical Analysis – Weakens Under $1842.60, Strengthens Over $1889.70

Gold futures slid to a more than two-month low early Thursday, weakened by a robust U.S. Dollar and the fading chances of additional fiscal stimulus measures. Adding to the uncertain outlook for gold, U.S. Federal Reserve officials reaffirmed their low interest monetary policy until the labor market recovers or inflation rises to 2%, but failed to offer a path for further stimulus, while asking the federal government to do more.

At 12:48 GMT, December Comex gold futures are trading $1856.90, down $11.50 or -0.62%.

In other news, the number of first-time filers for unemployment benefits were slightly higher than expected last week as the labor market continues its sluggish recovery from the coronavirus pandemic. Gold traders showed little response to the news.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out yesterday’s low at $1856.00. The main trend will change to up on a move through the last main top at $1983.80.

The main range is $1690.10 to $2089.20. The market is currently testing its retracement zone at $1889.70 to $1842.60. This zone is controlling the near-term direction of the market.

The new minor range is $1983.80 to $1851.00. Its 50% level at $1917.40 is a potential upside target and resistance level.

Daily Swing Chart Technical Forecast

With the market currently trading inside the major retracement zone, the direction the rest of the session is likely to be determined by trader reaction to the Fibonacci level at $1842.60.

Bearish Scenario

A sustained move under $1842.60 will indicate the presence of sellers. This could lead to a labored break with potential downside targets former bottoms at $1819.30, $1788.30 and $1772.00.

Looking at it another way, a break under $1842.60 could trigger an acceleration to the downside with the June 5 main bottom at $1690.10 the next major downside target.

Bullish Scenario

A sustained move over $1842.60 will indicate the selling is slowing or aggressive counter-trend traders are buying. If this creates enough upside momentum then look for the rally to possibly extend into the main 50% level at $1889.70. Since the main trend is down, sellers could come in on the first test of this level.

Overcoming $1889.70 will indicate the buying is getting stronger. This could extend the rally into the pivot at $1917.40.

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

U.S. Stocks Set To Open Lower As Initial Jobless Claims Unexpectedly Increase

Stocks Look Ready To Continue Yesterday’s Downside Move

S&P 500 futures are losing ground in premarket trading as traders are worried about the future pace of the economic recovery.

Leading tech stocks are also under pressure in the premarket trading session. Tesla is set to continue yesterday’s sell-off as it is already down by more than 3%.

Today, France and Germany reported that business sentiment improved for the fifth month in a row but this news did not provide any material help to global markets as traders remained focused on the second wave of coronavirus.

Initial Jobless Claims Increase To 870,000

U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims increased from 866,000 (revised from 860,000) to 870,000 while analysts expected that Initial Jobless Claims would decline to 840,000.

Continuing Jobless Claims declined from 12.75 million (revised from 12.63 million) to 12.58 million compared to analyst consensus of 12.3 million.

The employment reports were materially worse than expected and put additional pressure on S&P 500 futures.

U.S. Dollar Strength Indicates That Investors Are Seriously Worried About The Pace Of Recovery

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, managed to rebound from a low of 91.75 that was reached at the beginning of September to 94.50.

This rebound happened despite the Fed’s pledge to keep the rates at the bottom until the end of 2023. The strength of the current rebound indicates that investors are seriously worried about the perspectives of the world economic recovery.

The Volatility Index, VIX, has also rebounded from lows reached in August. VIX is often called a fear index since it rises when traders are worried about economic perspectives.

U.S. dollar upside has already put significant pressure on commodities. Silver and gold have suffered a sell-off while copper declined from recent highs. Only WTI oil managed to stay near the $40 level thanks to the support from the hurricane season.

If the U.S. dollar continues its upside move, commodities will remain under pressure, and commodity-related stocks will likely decline to lower levels.

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

Platinum Price Forecast – Will Platinum be the Next to Breakout

The global health crisis triggered unprecedented stimulus and debt expansion. Platinum is sensitive to inflation (like silver) and should respond bullishly. Longer-term, I think platinum could double the price of gold due to supply constraints.

PLATINUM LONG-TERM

A breakout above $1050 is needed to confirm a new bull market. With all the money printing, we see it as only a matter of time.

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PLATINUM NEAR-TERM TARGET

We see platinum finding support between $700 – $800. A breakout above $1050 in 2021 could signal an advance to $1750+.

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Click here for my article – Gold Forecast: Prices Collapsing to Cycle Target as Predicted

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information visit here.

Silver Forecast – Major Buy Signal

Silver Bull Market

After lagging gold for some time, silver finally broke above the long-term trendline and confirmed a new bull market. The global health crisis triggered unprecedented stimulus and debt expansion. Silver is ultra-sensitive to inflation and has responded accordingly. I am VERY BULLISH on silver long-term.

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Technical Note: A pullback could examine (backtest) the July 2020 breakout area near $20.00. From the next low, I believe prices could resume the bullish breakout and reach $35.00 – $50.00 in 2021. Longer-term, I believe silver is going well-above $100 per ounce.

Silver Chart

The breakdown phase has begun into the next cycle low. Ideal support arrives between $19.00 – $21.00.

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Click here for my article – Gold Forecast: Prices Collapsing to Cycle Target as Predicted

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information visit here.

Daily Gold News: Gold Breaking Lower, as Correction Deepens

The gold futures contract lost 2.05% on Wednesday, as it extended its short-term downtrend following breaking below the price level of $1,900. The market is the lowest since late July. Gold keeps retracing its rally from around $1,800 to August 7 record high of $2,089.20 in reaction to U.S. dollar rally, among other factors. Gold also broke below its mid-August local low, as we can see on the daily chart:

Gold is 0.6% lower this morning, as it is trading along yesterday’s low. What about the other precious metals? Silver lost 5.78% on Wednesday and today it is 2.8% lower. Platinum lost 1.7% and today it is 0.2% lower. Palladium gained 1.29% yesterday and today it’s 0.5% lower. So precious metals are mixed this morning.

Yesterday’s Flash Manufacturing/ Services PMI releases have been overall better than expected. But markets continued going risk-off as stocks extended their short-term downtrend.

Today we will have a Testimony from the Fed Chair Powell at 10:00 a.m. and a speech from Treasury Secretary Mnuchin. We will also get the Unemployment Claims release at 8:30 a.m. and New Home Sales number at 10:00 a.m.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Thursday, September 24

  • 8:30 a.m. U.S. – Unemployment Claims
  • 10:00 a.m. U.S. – Fed Chair Powell Testimony, Treasury Secretary Mnuchin Speech, New Home Sales
  • 2:00 p.m. U.S. – FOMC Member Williams Speech

Friday, September 25

  • 8:30 a.m. U.S. – Durable Goods Orders m/m, Core Durable Goods Orders m/m
  • 3:10 p.m. U.S. – FOMC Member Williams Speech

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Oil Price Fundamental Daily Forecast – Underpinned by OPEC+ Production Cuts, Capped by Demand Issues

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading nearly flat after recovering from early session weakness. The market opened lower despite a higher close the previous session, but a stronger U.S. Dollar and weaker demand for riskier assets dampened Wednesday’s bullish sentiment.

At 10:51 GMT, December WTI crude oil futures are trading $40.33, up $0.11 or +0.27% and December Brent crude oil is at $42.31, up $0.05 or +0.12%.

Iraqi Oil Ministry Denies Deal to Up Oil Exports

Crude oil prices fell on the opening after state news agency INA quoted Abdul Jabbar as telling state-owned daily newspaper al-Sabah that he expected to reach an agreement soon with OPEC and its allies over increasing Iraq’s crude oil exports.

The news was bearish for oil prices because increased supply is not what the oil market needs at this time. With the resurgence of COVID-19 cases around the world, lower demand is expected to drive up supply. So more oil dumped on the market would’ve added to the already existing supply glut.

Oil prices reached their low and turned higher after Iraq’s oil ministry on Thursday denied the media report.

“The oil minister did not make these comments and did not meet the newspaper’s reporter,” oil ministry spokesman Asim Jihad told Reuters. The INA article has since been deleted.

U.S. Energy Information Administration Weekly Inventories Report

U.S. crude, gasoline and distillate inventories all fell last week, EIA data showed. Crude inventories fell by 1.6 million barrels, less than forecast; gasoline stocks dropped more than expected, sliding by 4 million barrels; while distillate stockpiles posted a surprise drawdown of 3.4 million barrels.

Daily Forecast

The price action this week suggests that WTI and Brent crude oil could be settling into a range. Helping to cap gains will be worries about demand while underpinning the market will be the OPEC+ production cuts.

As far as the EIA report is concerned, the drop in distillates is encouraging because it could be an early indicate of demand.

“The distillate overhang that we’ve seen most of this year has been a primary bearish consideration to the energy complex and as that begins to adjust lower that can be viewed as supportive,” said Tony Headrick, energy markets analyst at CHS Hedging.

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

Price of Gold Fundamental Daily Forecast – Hard to Be Bullish Without Promise of More Fiscal Stimulus

Gold futures are trading lower on Thursday, but trading up from a two-month low reached earlier in the session. The market continues to be crushed by a stronger U.S. Dollar, which is dampening foreign demand for the dollar-denominated asset. The catalyst behind the selling pressure remains uncertainties surrounding further stimulus measures to support a sluggish economy in the United States.

At 10:13 GMT, December Comex gold is trading $1857.40, down $11.00 or $0.59%.

Another plunge in riskier assets caused by uncertainty around the resurgence in coronavirus cases and prospects of further federal stimulus measures encouraged investors to sell their gold holdings to cover losses and meet margin calls.

Wednesday’s sell-off after U.S. Federal Reserve officials tried to convince investors they will keep monetary policy easy for years to allow unemployment to fall suggests investors are getting tired of hearing the same promise from the Fed and would prefer the policymakers to take immediate action. Meanwhile, the Fed is calling on greater fiscal help from Congress.

With neither the Fed nor Congress ready to take aggressive action to prevent another economic down turn, Dollar bulls are taking advantage of the stalemates, while gold falls victim to the greenback’s sudden rise.

Daily Forecast

Optimism on a strong recovery over the past six months has faded, optimism on containment of the coronavirus and robust bets on continual stimulus support from the government and Fed were keeping gold prices well bid, but now all three factors are creating uncertainty. And when there is uncertainty, traders move money into safe-haven assets like Treasurys, the U.S. Dollar and the Japanese Yen. They also liquidate expensive assets like stocks and pay for their margin calls and losses by selling gold.

Those who still believe that gold is a safe-haven asset have to have learned by now that it’s more of a store of value. Holding gold during times of turmoil doesn’t stop the stock market from plunging, but selling it does help cushion the blow from the losses.

Thursday’s focus will shift to the latest jobless claims report from the Labor Department, due at 12:30 GMT, with economists polled by Reuters expecting new unemployment filings last week to come in at 840,000, down from 860,000 the previous week. Continuing claims are also expected to fall.

Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will resume testimony before Congress at 14:00 GMT, while August’s new home sales figures are published at the same time.

Keep an eye on the jobless claims report for any surprises that could create a volatile response by the U.S. Dollar and consequently gold.

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

Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Report to Show Lower-than-Average Build

December Natural gas futures are trading nearly flat shortly before the regular session opening on Thursday and the release of the government’s weekly storage report at 14:30 GMT. The market is trading higher for the week which highlights the resiliency of this market as bullish investors continue to bet on increased liquefied natural gas demand and perhaps greater heating demand this winter. The price action also suggests diminished worries about storage containment.

At 09:06 GMT, December natural gas futures are at $3.246, up $0.017 or +0.53%.

On Wednesday, even the nearby October futures contract rebounded with a vengeance after plunging earlier in the week. Helping to fuel the recovery were signs of a liquefied natural gas (LNG) recovery, forecasts of greater weather-driven demand and new storage estimates that indicated containment worries may have been overblown, according to Natural Gas Intelligence (NGI).

Short-Term Weather Outlook

On Wednesday NatGasWeather wrote, “The weather data has added demand the past few days in both the GFS and European models for September 29-October 3 as a strong early season cool shot sweeps across the Great Lakes and Northeast with highs of 40s to 60s and lows of 30s and 40s. At the same time, heat will build over California and the Southwest with 90s and 100s.

This September 29 – October 3 has added enough demand the past few days to take on a bullish tilt, although still not hot or cold enough before and after. Although, the after is subject to cooler trends in time. Another day with wild price swings in the natural gas markets, with each day seemingly having a different reason for why prices are trading as volatile as they have.”

US Energy Information Administration Weekly Storage Report

This week’s EIA report covering the week-ending September 18 is expected to come in lighter than last week. There is a lot of interest in this report because traders want to know if last week’s larger-than-normal print was a one-off anomaly or reflective of a looser market.

According to Natural Gas Intelligence (NGI), “A Bloomberg survey found estimates ranging from 68 Bcf to 82 Bcf, with a median of 77 Bcf, while estimates in a Wall Street Journal poll ranged from 71 Bcf to 85 Bcf, with an average of 77 Bcf. A Reuters poll of 13 analysts showed estimates ranging from 68 Bcf to 96 Bcf, with a median of 76 Bcf. NGI projected an injection of 71 Bcf.”

Last year, EIA recorded a 97 Bcf build for the period, and the five-year average is an injection of 80 Bcf.

Daily Forecast

Continue to monitor the price spreads. Currently, they are indicating the bullishness is being best expressed in the winter contracts (December through March). This bullish traders are betting on a normal winter, steady heating demand domestically and a resumption in consistent U.S. LNG export needs in Asia and Europe.

If today’s EIA report comes in over the median then look for a sharp break in the front end of the curve (October and November).

Looking forward, the wild card remains the containment of the COVID-19 pandemic.

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

Gold Forecast – Gold Prices Nearing Major Buy Signal

In this article, I will lay the groundwork for the next low in gold and touch on the emotional pitfalls we face as investors. Why is it that most traders sell when they should be buying and buy when they should be selling?

The Intermediate Cycle

Gold goes through the same process (rally-top-decline) approximately every 6-months. With each phase, there are various emotional benchmarks that drive sentiment. Becoming aware of them could make you a better investor.

Emotional Barriers

Near the Cycle Top: Retail traders are loaded with out of the money (OTM) call options and are perilously overleveraged. They only read articles that confirm their outlook (confirmation bias). They devise reasons why prices can only go higher (fear of missing out).

Bearish Breakdown: A bearish breakdown or recognition day arrives when critical support is violated, and retail traders rush to the exits to preserve profits or limit a mounting loss. Often extreme selling morphs into a panic. I outlined the current breakdown in my Gold Forecast: The September Breakdown in Gold is Beginning.

Near the Cycle Bottom: Everyone that was once bullish is now finding reasons why prices will continue to drop. They read bearish-article-after-bearish-article expecting lower prices. They finally snap and sell at a loss or open bearish positions. Prices bottom a few days later, and they are caught on the wrong side once again.

Why does this blatantly obvious pattern repeat? The answer is simple – Humans Nature. Humans are too emotional not be affected. I got tired of making the same, emotionally driven mistakes, and created the Gold Cycle Indicator. It simplifies the investing process, and when it turns green – I look to buy.

Gold Price Target

I believe gold is dropping into the next intermediate low. Prices should bottom in late September or early October. Our Gold Cycle Indicator is expected to reach the green zone as the cycle bottoms.

The Bearish Breakdown is underway, and prices should enter our cycle target window ($1725 – $1810) by late September or early October.

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The Gold Cycle Indicator finished Wednesday at 182. It continues to work its way towards minimum cycle bottoming (green zone).

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

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more, click here.

Oil Traders Slam their Brakes on Stronger Dollar, Rising COVID-19 Attack

Oil traders are presently in an unstable state after rising COVID-19 cases in key emerged markets(United States and Western Europe), distorted the mind of global investors, throwing all caution to the wind, as they flocked in mass to the safe-haven currency.

The stronger greenback is the clearest hint that crude oil traders have little or no interest in holding risk, especially in assets like commodities, in which the black liquid hydrocarbon derivative falls in.

Recall that the US Federal Reserve Chairman Powell had earlier rattled the mind of traders with a discordant economic warning, showing that the global economy might be experiencing bumps, triggering West Texas Intermediate, to trade below $40/barrel.

Taking a look critically at WTI most recent price action, it’s notably observed that demand falls around $41.50-$40.50/barrel for four consecutive trading days, with prices falling by 4% on Monday.

Oil bears will resolve to breach below $39.00 price level in the coming days, despite the Oil Sherriff’s recent calls at hampering oil sellers’ momentum.

With the energy market looking bearish, any macros showing weak demand or perceived threat to the global economic recovery sending prices of crude arbitrarily lower.

In addition, oil bulls resolve have been damped on growing concerns about more stringent social -mobility restrictions as the COVID-19 virus onslaught explode globally, coupled with the macro on the United States revealing a death toll of more than 200,000, and shows no signs of coming down in the near term.

Finally the oil market’s sensitivity to COVID-19 has strengthened; with movement of crude oil bulls tamed as the Covid-19 attack continue to make headlines, which could trigger a bearish run in its price action in the near term

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

Natural Gas Price Prediction – Prices Rose on Cold Weather Forecast

 

Natural gas prices surged higher on Wednesday as colder than normal weather is forecast to cover most of the mid-west for the next 2-weeks. Prices formed and outside day which is a bullish signal. Tropical Depression Beta is moving inland and is no longer a threat. There is another storm over the Caribbean, but it has a very small chance of becoming a tropical cyclone in the next 48-hours according to NOAA.

Technical Analysis

Natural gas prices surged 6.9% reversing Tuesday’s decline. Prices formed an outside day, which is a higher high a lower low, and a higher close which is a bullish signal. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is negative but the trajectory his turning upward which points to consolidation.

Demand Declined

Demand falls, driven by declines in power generation. Temperatures averaged 65–70 degrees Fahrenheit across most of the Lower 48 states, reducing cooling demand and energy consumption. Total U.S. consumption of natural gas fell by 3.0% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 6.3% week over week. In the residential and commercial sectors, consumption increased by 2.7%.