Gold Price Forecast – Gold Markets Pressing Resistance

Gold markets have rallied during the trading session on Wednesday, breaking towards the $1935 level. This was an area that had seen selling pressure previously, so it should not be a huge surprise to think that perhaps we are going to pull back just a little bit. Having said that, we are moving solely on the idea of stimulus and nothing else, as it is by far the biggest headline. If the US dollar gets clobbered, and right now it certainly looks as if it is going to, that should continue to push the gold markets towards the $1960 level above.

Gold Price Predictions Video 22.10.20

The 50 day EMA sits just below the candlestick for the day, which of course could give more credence to the idea of going higher. At this point, the $1900 level looks to be supportive, but even that is somewhat tentative if we do not get stimulus or some type of major move in the US dollar to the positive side. If we break down below there, it is likely that we are going down to the $1850 level where we had bounced from previously.

After that, the $1800 level is massive support that I would be all over and would be willing to be very aggressive around. The 200 day exponential moving average sits just below that level, so it is quite literally the indicator that some traders will use to define the overall uptrend. At this point, the market is trying to break out, but you may need to look for short-term pullbacks in order to pick up little bits and pieces of value.

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

Oil Gets Back Below The $41 Level

Oil Video 21.10.20.

U.S. Crude Inventories Declined By 1 Million Barrels

Yesterday, API Crude Oil Stock Change report indicated that crude inventories increased by 0.58 million barrels. However, today’s EIA Weekly Petroleum Status Report showed that crude inventories decreased by 1 million barrels, suggesting tha the downside trend in inventory levels continued.

While API Crude Oil Stock Change reports have a short-term impact on the market, EIA reports have more influence.

According to EIA, gasoline inventories increased by 1.9 million barrels while distillate fuel inventories decreased by 3.8 million barrels. Most likely, traders will be alarmed by the increase of gasoline inventories which suggests that gasoline demand recovery has stalled.

U.S. domestic oil production declined to 9.9 million barrels per day (bpd) as the negative impact from hurricanes persisted. It should be noted that crude inventories declined by just 1 million barrels while U.S. domestic oil production was down by 0.6 million bpd, so oil demand in the U.S. remained muted.

In total, this was not a bullish report despite the decrease in crude inventory levels. Gasoline inventories increased, and it looks like demand remains soft.

Oil Continues To Ignore The Recent Developments In Europe

While oil is losing ground today after an unsuccessful attempt to settle above the resistance at $41.50, it has managed to show material strength in recent days despite the alarming news from Europe.

Currently, European countries struggle to contain the second wave of coronavirus and are forced to introduce new restrictions.

The latest news on this front came from Czech Republic, where government decided to shut all non-essential shops and limit movements to essential trips in order to deal with the rising number of new cases.

Current data shows that countries like UK, France, Spain, Italy, Poland, Belgium and Netherlands have significant problems on the virus front, and the introduction of new anti-virus measures looks like a plausible scenario.

However, it remains to be seen whether oil traders will pay attention to the latest developments in Europe or focus on U.S. stimulus negotiations and the recent weakness of the U.S. dollar. A weak U.S. dollar is bullish for dollar-denominated commodities like oil and could provide some support to oil at a time when the future pace of demand recovery is under question.

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

Silver Price Daily Forecast – Test Of Resistance At $25.00

Silver Video 21.10.20.

Silver Gains Ground As U.S. Dollar Continues To Move Lower

Silver gained strong upside momentum and continues its upside move as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below the support at 92.80 and is trying to get to the test of the next support level at 92.50. The key driver for dollar’s downside move is the strong performance of the British pound, which is gaining ground amid signs that EU and UK will continue to work on the Brexit deal.

In case the U.S. Dollar Index settles below the support at 92.50, silver will get additional support. Weaker dollar is bullish for silver as it makes silver cheaper for buyers who have other currencies.

Meanwhile, gold managed to get above the 50 EMA at $1905 and is moving towards the next resistance level at $1930. If gold moves above $1930, it will gain upside momentum and head towards the $1950 level which will be bullish for silver and other precious metals.

Gold/silver ratio continues to lose ground and is declining towards the nearest support at 75.50. This is a bullish development for silver.

Technical Analysis

silver october 21 2020

Silver is currently testing the nearest resistance level at $25.00. If the test of this level is successful, silver will gain additional upside momentum and head towards the next resistance at the recent highs at $25.55.

There are no material levels between $25.00 and $25.55 so this move may be fast in case the U.S. dollar continues to lose ground against a broad basket of currencies.

If silver moves above the resistance at $25.55, it will quickly get to the test of the next resistance level at $25.85.

On the support side, the nearest support level for silver is located at the 50 EMA at $24.55. If silver declines below the 20 EMA, it will gain downside momentum and head towards the next support level at $23.90.

A move below the support at $23.90 will signal that the current upside momentum has come to an end. In this case, silver will head towards the next support at $23.30.

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

Natural Gas Price Fundamental Daily Forecast – Early Support from Rising LNG Demand, Cooler Forecasts

Natural gas futures are trading higher on Wednesday as traders attempt to continue this week’s price gains following a setback and technically bearish closing price reversal top on Tuesday. There was no follow-through to the downside earlier today, and the market is in a position to take out yesterday’s gains.

This suggests bullish traders are gaining more confidence in the forecast calling for heating demand, and renewed demand for liquefied natural gas (LNG), following a temporary production shutdown in the Gulf of Mexico earlier in the month.

At 11:55 GMT, December natural gas is trading $3.331, up $0.071 or +2.18%.

Supply/Demand Balance Increasingly Tighter

Natural Gas Intelligence (NGI) reported Tuesday that NatGasWeather said with production down nearly 1 Bcf day/day, the supply/demand balance has become increasingly tight and the background state more bullish for gas. This suggests storage surpluses should continue to decline in the weeks ahead. For now, however, stocks are currently stout at 354 Bcf above the five-year average.

That makes weather forecasts all the more important as the market is less than two weeks away from the official start of the gas winter season.

The forecaster went on to add, “Essentially, a bit of this Global Forecast System (GFS) run toward the bearish side for next week, but the latest GFS again teased ways the start of November can trend colder and needs watching.”

Daily Forecast

We expect natural gas prices to remain supported as long as the forecasts continue to call for cold weather and LNG exports continue to increase.

Analysts at Tudor, Pickering, Holt and Co (TPH) are saying that as winter demand picks up, local constraints relating to full storage and congested export pipes are no longer expected to be an issue. This is likely to lead to higher prices into the early part of the new winter heating season.

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

Daily Gold News: Extend Short-Term Advance as US Dollar Declines

The gold futures contract gained 0.19% on Tuesday, as it got closer to the recent local highs. Today yellow metal’s price is the highest since last week’s Tuesday following bouncing off $1,900 price level again. Recently gold was retracing a rally from around $1,800 to August 7 record high of $2,089.20 in reaction to U.S. dollar advance, among other factors. Then gold has bounced from the support level marked by mid-August local low of around $1,875, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is 0.7% higher this morning, as it is extending short-term uptrend following declining U.S. dollar. What about the other precious metals? Silver gained 1.14% on Tuesday and today it is 1.6% higher. Platinum gained 1.60% and today it is 0.7% higher. Palladium gained 2.55% on Tuesday and today it is 0.4% lower. So precious metals are generally advancing this morning.

Yesterday’s Building Permits/ Housing Starts release has been mixed with Building Permits number slightly exceeding expectations. Today we will get some Fed talk along with the Beige Book release at 2:00 p.m.

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

Wednesday, October 21

  • 8:30 a.m. Canada – CPI m/m, Retail Sales m/m, Core Retail Sales m/m
  • 8:50 a.m. U.S. – FOMC Member Brainard Speech
  • 10:00 a.m. U.S. – FOMC Member Mester Speech
  • 2:00 p.m. U.S. – Beige Book

Thursday, October 22

  • 8:30 a.m. U.S. – Unemployment Claims
  • 10:00 a.m. U.S. – CB Leading Index m/m, Existing Home Sales

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.

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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.

 

Price of Gold Fundamental Daily Forecast – All Eyes On Whether There Will Be a US Stimulus Agreement

Gold futures are moving higher on Wednesday as a positive outlook for a new fiscal stimulus package from U.S. policymakers is weakening the U.S. Dollar, while driving up foreign demand for dollar-denominated gold.

Additionally, optimism that U.S. lawmakers could reach an agreement on a pre-election coronavirus relief deal is also bolstering gold’s appeal as a hedge against inflation.

At 10:56 GMT, December Comex gold futures are trading $1922.20, up $6.80 or +0.36%.

Latest Stimulus News

The White House and Democrats in the U.S. Congress moved closer to agreement on Tuesday as President Donald Trump said he was willing to accept a large aid bill despite opposition from his Republican Party.

Also on Tuesday, White House Chief of Staff Mark Meadows said that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made “good progress” on stimulus talks, before adding that they “still have a ways to go” before an agreement is reached.

Following Pelosi and Mnuchin’s meeting on Tuesday, Meadows told CNBC’s “Closing Bell” that the two will talk again on Wednesday, and that he hopes to see “some kind of agreement before the weekend.”

Rising Treasury Yields May Be Capping Gains

The news that Trump was willing to accept a large aid bill sent U.S. 10-year Treasury yields to a four-month high, in anticipation of more government borrowing, and pressed the dollar index to its lowest since September by boosting investors’ mood.

Daily Forecast

The early price action suggests speculators are increasing bets on a stimulus deal being agreed upon before the November 3 election. Despite this optimism, there are still worries that the deal may not be reached in a timely manner.

Without the new fiscal stimulus package, the U.S. economic recovery is at risk. This could revive the U.S. Dollar’s appeal as a safe-haven asset over the short-turn, which would lead to renewed selling pressure on gold.

As we’ve been saying for weeks, new stimulus is coming. Traders just don’t know the size of the package and the timing of it. A “sooner-than-later” package could spike gold prices higher over the short-run. No deal, would weaken prices but longer-term buyers will be there to buy the dip.

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

Oil Price Fundamental Daily Forecast – Supported as Stimulus Hopes Move to Forefront

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Wednesday, but remain inside yesterday’s trading range. The price action suggests investor indecision and impending volatility.

Gains are likely being capped by a surprise build-up in U.S. crude stockpiles, which stoked concerns over a global supply glut even as a spike in global COVID-19 cases fueled fears of a slower recovery in fuel demand.

The markets are likely being underpinned by a weaker U.S. Dollar and optimism over a possible fiscal stimulus deal that could lead to payouts to consumers before the November 3 elections.

At 10:17 GMT, December WTI crude oil is trading $41.13, down $0.57 or -1.37% and December Brent crude oil is at $42.63, down $0.53 or -1.23%.

American Petroleum Institute Weekly Inventories Report

The API on Tuesday reported a build in crude oil inventories of 584,000 barrels for the week-ending October 16. Analysts were looking for an inventory draw of 240,000 barrels.

The API also reported a draw in gasoline inventories of 1.622-million barrels of gasoline for the week-ending October 16 – compared to the previous week’s 1.513-million barrel draw. Analysts had expected a 1.767-million barrel draw for the week.

Distillate inventories were down by 5.983 million barrels for the week, compared to last week’s 3.930-million barrel draw, while Cushing inventories rose by 1.174-million barrels.

Bearish Bits and Pieces

No surprises here. Worldwide COVID-19 cases crossed 40 million on Tuesday, with some parts of Europe imposing renewed lockdown measures.

On the supply side, Russia’s energy minister said on Tuesday it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back existing output restrictions should proceed.

Meanwhile, OPEC member Libya, which is exempt from the cuts, is also ramping up production after armed conflict shut almost all of the country’s output in January, pumping more oil into an oversupplied market.

Stimulus Hopes Offer Support

Some support for crude oil prices came from the White House and Democrats in the U.S. Congress moving closer to agreement on a new coronavirus relief package that could boost fuel demand as President Donald Trump said he was willing to accept a large aid bill.

Daily Forecast

Today’s Energy Information Administration (EIA) weekly inventories report, due to be released at 14:30 GMT, is expected to show a 0.5 million barrel drawdown, but this could change because of the API report. However, due to the impact of Hurricane Delta on production about two weeks ago, I think the inventory numbers are a little skewed.

Propping this market higher is the stimulus package news. Although the new government money is not expected to change the longer-term outlook in the market, it could give the economy enough of a jolt to spike prices higher. Think about it, the economy could see an infusion of $1.8 to $2.2 trillion by November 3.

It may not be enough to solve any longer-term problems or make the COVID-19 pandemic go away, but it could drive up demand for gasoline at least temporarily.

The way I see it, the inventory numbers are stale data from last week, but the stimulus money is a future event. Today’s sideways price action suggests to me that investors are leaning to the upside, at least temporarily.

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

Crude Oil Bulls Out of Gas on API Data

Brent crude and West Texas Intermediate crude, two major leading oil benchmarks saw their value plummeting as high as 0.9% at the pre-open of the London trading session.

Oil bears are riding on the momentum after the American Petroleum Institute data showed the world’s largest economy oil inventories gained last week, thereby taking the oil bulls off guard amid distillate stockpiles dropping by about 6 million barrels, revealing oil bulls high sensitivity to any fundamental printing a build of any kind, as fears strengthen on bias that crude oil market demand has peaked.

On the supply aspect, the biggest challenge oil traders are dealing on the already fragile energy market is nothing seems to be working now. Although the popularly known oil cartel group, OPEC is trying hard within its statutory powers to extend oil production cuts, the upsurge in COVID-19 cases has further complicated the situation.

That has partly as seen on the recent price action , printing how Brent crude bulls suffer from exhaustion arbitrarily ,whenever it tried to break above the $43.15 critical resistance level, amid the falling U.S dollar.

This further means that, the fragile energy market, under these prevailing circumstances is likely to see more downward pressure given enough time.

Until the global economy begins to run at optimal capacity, it would be absurd for oil traders to be bullish in the long term, although the recent macro on news about AstraZeneca’s highly rated COVID-19 vaccine scheduled to resume as early as this week, might limit the oil bears from breaching below $40/barrel at least in the near term.

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

Gold Price Futures (GC) Technical Analysis – $1939.40 is Trigger Point for Acceleration into $1970.10

Gold futures edged higher on Tuesday as the dollar weakened and hopes for a U.S. coronavirus aid package ahead of the presidential election boosted bullion’s appeal as an inflation hedge.

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” on the stimulus package, Pelosi’s spokesman Drew Hammill said.

On Tuesday, December Comex gold settled at $1915.40, up $3.70 or +0.19%.

The U.S. Dollar Index slipped 0.4% against its rivals to its lowest since September 21, making gold less expensive for holders of other currencies.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a trade through $1885.00. A move through $1939.40 will reaffirm the uptrend.

The minor trend is down. This is controlling the downside momentum. A trade through $1923.40 will change the minor trend to up, reversing momentum to the upside.

From the bottom up, the major support is the retracement zone at $1889.70 to $1842.60. This zone stopped the selling at $1851.00 on September 24, at $1877.10 on October 7 and at $1885.00 on October 14.

The first minor range is $1851.00 to $1939.40. Its retracement zone at $1895.20 – $1880.00 is support.

The second minor range is $1877.10 to $1939.40. Its 50% level at $1902.10 is another support level.

The short-term range is $1983.80 to $1851.00. Its 50% level at $1917.40 is resistance. Overcoming this level will indicate the buying is getting stronger.

The intermediate range is $2089.20 to $1851.00. Its retracement zone at $1970.10 to $1998.20 is the primary upside target area.

Short-Term Outlook

We’re in a headline driven market, which usually means we watch for a breakout.

Bullish Scenario

A new fiscal stimulus deal will be bullish news. Overtaking $1917.40 will indicate the presence of buying. Taking out $1923.40 could trigger an acceleration to the upside with the next target the main top at $1939.40.

The main top at $1939.40 is another potential trigger point for an upside breakout. This could create the momentum needed to challenge the short-term 50% level at $1970.10.

Bearish Scenario

A sustained move under $1902.10 will signal the presence of sellers. This could lead to a labored break with potential downside targets coming in at $1889.70, $1885.00, $1880.00 and $1877.10. The latter is a potential trigger point for an acceleration to the downside.

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

Crude Oil Price Update – Main Trend Changed to Up, but Needs to Hold Above $41.50 to Sustain Upside Momentum

U.S. West Texas Intermediate crude oil futures closed higher on Tuesday on the hope U.S. policymakers were nearing a deal on coronavirus relief, but the threat to demand from rising COVID-19 cases worldwide and increased Libyan output kept prices from moving higher.

On Tuesday, December WTI crude oil futures settled at $41.70, up $0.64 or +1.56%.

Adding to supply worries, crude inventories rose by 584,000 barrels in the week to October 16 to about 490.6 million barrels, data from industry group the American Petroleum Institute (API)  showed, compared with analysts’ expectations in a Reuters poll for a draw of 1 million barrels.

“If we get a deal, I think that would be supportive, and if we don’t get a deal, I think that’s going to be somewhat punishing for prices,” said John Kilduff, partner at Again Capital in New York.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend changed to up on Tuesday when buyers took out the last swing top at $41.74. A trade through $39.36 will change the main trend to down.

The short-term range is $44.33 to $36.93. The market closed on the strong side of its retracement zone at $41.50 to $40.63. This is helping to generate some upside momentum. This retracement area is controlling the near-term direction of the market.

Short-Term Outlook

The early price action suggests that the direction of the December WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at $41.50.

Bullish Scenario

A sustained move over $41.50 will indicate the presence of buyers. A sustained move over $41.74 will indicate the buying is getting stronger. This could lead to a test of the main top at $42.02.

A trade through $42.02 will reaffirm the uptrend. This is also a potential trigger point for an acceleration to the upside with the next target the August 26 main top at $44.33.

Bearish Scenario

A sustained move under $41.50 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the 50% level at $40.63, followed by the minor bottom at $40.46.

Taking out $40.46 will shift momentum to the downside with the main bottom at $39.36 the next likely downside target.

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

Natural Gas Price Prediction – Prices Rise on Cold Weather Outlook

Natural gas prices moved higher on Tuesday as colder than normal weather is now spreading throughout the US. NOAA now forecasts that the entire nation will experience cooler than normal temperatures which will likely increase heating demand. There is one disturbance moving through the Caribbean that has a 0% chance of becoming a tropical cyclone during the next 48-hours. Tropical storm Epsilon is expected to move toward the east coast of the US but is not likely to impact any natural gas infrastructure. Total consumption is expected to decline in 2020 according to the EIA.

Technical Analysis

Natural gas prices moved higher rising more than 4.0%, but closed off the highs of the session. Prices recaptured resistance which is now short-term support near the 50-day moving average at 2.76. The 10-day moving average is poised to cross above the 50-day moving average which means that a short-term up trend is now in place. Resistance is seen near the October highs at 2.95. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

The EIA Expects Demand to Decline

EIA expects that total U.S. consumption of natural gas will average 83.7 billion cubic feet per day in 2020, down 1.8% from 2019. The decline in total U.S. consumption reflects less heating demand in early 2020, contributing to residential and commercial demand in 2020 averaging 13.1 Bcf/d. The EIA forecasts industrial consumption will average 22.3 Bcf/d in 2020, down 0.8 Bcf/d from 2019 as a result of reduced manufacturing activity. EIA expects total U.S. natural gas consumption will average 78.7 Bcf/d in 2021, a 5.9% decline from 2020.

Gold Price Prediction – Prices Rise as the Dollar Turns Lower Following Mixed Housing Data

Gold prices moved higher on Tuesday, as the dollar headed south. US yields moved higher following a stronger than expected increase in US Single-Family Housing Starts. Nancy Pelosi the US House of Representatives Speaker that the White House and she were getting closer to a stimulus deal. Gold volatility has eased and is currently trading near the lowest levels seen since the pandemic started to spread in February just shy of 21%.

Trade gold with FXTM

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Technical analysis

Gold prices moved higher and are poised to test resistance is seen near the 50-day moving average at 1,925. Short term support is seen near the 10-day moving average at 1,905. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal on the upper end of the neutral range. Medium-term momentum remains neutral to positive as the MACD histogram prints in the black with an upward sloping trajectory that points to a slow trend higher.

Housing Starts are Mixed

US housing starts increased by 1.9% to an annual rate of 1.415 million units in September. Data for August was revised down to a 1.388 million-unit pace. Expectations were for Housing Starts to increase to a rate of  1.457 million units in September. The most impressive part of the release was that US single-family homebuilding surged in September, rising 8.5% to a rate of 1.108 million units last month. But starts for the volatile multi-family housing segment fell 16.3% to a pace of 307,000 units.

Natural Gas Price Fundamental Daily Forecast – Jump in LNG Exports, Colder Temps, Fuel Price Surge

Natural gas futures are trading higher at the mid-session on Tuesday after reports that liquefied natural gas (LNG) facilities along the Louisiana coast appear to be ready to ramp-up production. LNG feed gas demand climbed to 8.5 Bcf/d in early morning estimates from Bespoke Weather Services.

“Despite all of the potential issues we heard about the last few days, it is full steam ahead for LNG…and we received word late yesterday that even Cameron would be receiving a tanker to load up, even though the rock barge” obstructing the Calcasieu Ship Channel “has not been cleared,” Bespoke said.

At 15:36 GMT, December natural gas futures are trading $3.320, up $0.040 or +1.22%.

“With other empty tankers waiting offshore, LNG feed gas flows are likely to ramp up rapidly, providing a much needed boost to natural gas prices and driving futures higher,” the EBW analysts said.

Nearby Futures Contract on Track for 20-month High on Rising Exports, Cold Weather

Nearby natural gas futures are soaring nearly 5% and were on track for their highest close in 20 months on Tuesday on rising LNG exports and forecasts for colder weather and more heating demand over the next two weeks than previously expected.

The amount of gas flowing to LNG export plants has averaged 6.9 Bcfd so far in October, up from 5.7 bcfd in September.

That would be the most LNG exports in a month since April and puts exports on track to rise for a third month in a row for the first time since February when feed gas hit a record 8.7 bcfd as rising global gas prices prompted buyers to reverse cargo cancellations.

U.S. exports fell from March to July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse to record lows and buyers to cancel around 175 U.S. cargoes.

But now, front-month gas prices in Europe and Asia were trading at their highest since November 2019 and October 2019, respectively, putting both more than $2 per mmBtu over the U.S. Henry Hub benchmark.

Daily Forecast

Look for higher prices over the short-run as long as weather and LNG demand continue to increase. This is going to be needed to ward off the toppling of storage inventories by the end of October.

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

Organic Soybean Prices Forecast to Hit 5-Year Highs

Historically, during the fall the seasonal tendency is for Indian organic soybean prices to decline into the middle of the Q4. During the balance of the fall, prices tend to find their seasonal bottom and then begin to rise following the harvest. Exporters tend to talk up prices by discussing issues related to the weather and the decline in production for the ongoing harvest.

In 2020, the themes are the same, but the price action is different. Soybean prices on the NCDEX have surged, rising to the 571 Rupee per metric ton which is the highest that NCDEX soybeans have been in October during the last 5-years. While the spread between Indian organic soybeans and Indian conventional soybeans will vary based on supply and demand and the region they are planted, prices for Indian organic soybeans have risen to $660 per metric ton FOB India. While meal prices continue to lag, it’s unlikely that they will remain subdued in the face of rising Indian soybean prices.

The Rupee has also strengthened recently which can also help buoy prices. During 2020, the Rupee has declined approximately 3% versus the US dollar but has strengthened approximately 4.5% since hitting a low in April of 2020 during the height of the COVID-19 scare. Since strengthening during the summer, the Rupee has remained in a relatively tight range between 73-74 per US dollar.

The Federal Reserve has used plenty of its ammunition to stabilize the US economy, and further economic weakness would put downward pressure on US yields, allowing the dollar to slip further. A strengthening Rupee will put additional upward pressure on organic soybean prices.

The rise in Indian soybean prices and in turn Indian organic soybean prices have occurred as projections for the new-crop in India have changed from 12-million metric tons of production down to 10-million metric tons of production. Price action is telling us that production projections might still be too high. Additionally, there is also an issue with containers making their way back to Indian which has lifted shipment costs to $120 per metric ton for both the east coast and the west coast.

During the past 4-years, the rally from the seasonal low in October to the seasonal high in either Q1 or Q2 averaged 19%. An average rally from 571 per metric ton would put non-GMO Indian soybeans near 671 per metric ton. This potentially could push Organic soybeans to $750 per metric ton and with shipping would place prices in Baltimore at $870 per metric ton or $24 per bushel for Indian soybeans.

With US domestic organic soybeans already priced close to $20 per bushel, this cycle would only generate further upside. During the U.S. harvest prices could be capped but once domestic soybeans are gone, the focus will turn to India where the majority of organic soybeans are imported. Nearly 70% of the organic soybean consumed in the U.S. is imported. While this large increase and outcome are unlikely to completely come to fruition The Jacobsen believes there will be further upward pressure on prices and is increasing its target for organic soybeans up to $23 per bushel for the Q1 of 2021.

Oil Mixed As Traders Wait For U.S. Stimulus News

Oil Video 20.10.20.

OPEC+ Keeps The Production Cut Deal Intact

On Monday, OPEC+ monitoring committee met to discuss the latest developments in the oil market. Russian Energy Minister Alexander Novak stated that the committee recommended to fully comply with the current deal.

According to the current production cut deal, OPEC+ will increase its production by 2 million barrels per day (bpd) in January 2021.

In recent weeks, oil traders started to worry about the insufficient pace of the oil demand recovery. The second wave of coronavirus has already led to a new round of restrictive measures in Europe, and the market fears that these measures will put pressure on oil demand recovery.

In this situation, OPEC+ will have to decide whether it should change the deal and keep the current production cuts for a few more months.

While OPEC+ has signaled that it will proceed with the expected production increase as planned, the real decision will be made in December when OPEC+ energy ministers will meet to discuss the deal. Until then, OPEC+ will likely try to offer some verbal support to the market.

U.S. Stimulus Hopes Provide Support To Oil

On Tuesday, U.S. President Donald Trump stated that he would accept a new deal worth more than $2.2 trillion. This statement provided support to the U.S. stock market and put pressure on the U.S. dollar.

Meanwhile, the potential stimulus deal can provide material support to oil demand as it will support consumers and businesses. At this point, it looks like hopes for a new coronavirus aid package are among the main catalysts that keep oil near the $41 level.

Most analysts believe that the stimulus deal is inevitable, and the only question is whether Republicans and Democrats will be able to reach consensus ahead of November election.

The timing of the deal is important for the oil market because demand needs additional support right now. Analysts expect that today’s API Crude Oil Stock Change report will show that crude inventories decreased by 0.24 million barrels, but the downside trend in inventories could soon come to an end- the number of oil rigs in the U.S. is increasing which means that U.S. oil production will also increase in the near future.

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

Silver Price Forecast – Silver Markets Show Signs of Hope for Stimulus

Silver markets continue to see slightly bullish pressure, as we have broken above the 50 day EMA. Ultimately, the market is waiting to see whether or not we are going to get some type of stimulus coming out the United States. There is a bit of hope that we will see it, as Tuesday is anticipated to be the “do or die” session. That being said, there are a lot of concerns out there and therefore one would have to wonder whether or not the silver market will see as much demand going forward. Yes, there is the potential precious metals trade, but silver tends to be thought of more as an industrial metal for the longer-term move.

SILVER Video 21.10.20

Looking at this chart, the 50 day EMA is sloping slightly lower, so I do think that there is the possibility that we get a bit of a pullback, but I am not willing to short this market. I recognize that this is a market that will continue to be very noisy, but I think longer-term we still have a lot of central banks out there looking to flood the markets with liquidity. If that is the case, that should continue to make an argument for hard assets, at least over the longer term. I think that silver probably drops a bit from here, but I would be very interested in buying at $24, $22, and then the 200 day EMA which will attract a lot of attention. Having said that, we have a lot of volatility ahead of us so keep it a small position will be the most important thing.

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

Crude Oil Price Forecast – Crude Oil Continue to Do Very Little

WTI Crude Oil

The West Texas Intermediate Crude Oil market has done very little during the trading session, as we continue to see this market go sideways. The 50 day EMA as well as the 200 day EMA continues to simply go sideways as well, showing that there is no real momentum. The $40 level of course offers a bit of support as well, so that is worth paying attention to as well. The market has nowhere to be right now, because quite frankly we have not shown any signs of making a significant move.

The $36.25 level looks to be massive support, as we have bounced from there couple of times. Ultimately, the $43.50 level above is significant resistance. That being said, the market is essentially right in the middle of these areas, so that suggests that the market is at “fair value”, making it very difficult to trade. Ultimately, it is best to sit on the sidelines.

Crude Oil Video 21.10.20

Brent

Brent markets were even more quiet during the trading session, currently sitting just below the 50 day EMA. Ultimately, the market is doing the same thing as the other grade of crude oil, simply going sideways. The area between the 50 day EMA and the 200 day EMA should continue to offer resistance, so I think what we are going to see here is that every time this market rallies, sellers will come in to take advantage of exhaustion. Ultimately, the market goes down to the $40 level underneath. The $40 level should be significant support, as it is a large, round, psychologically significant figure. If we were to break down below there, the bottom can follow.

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

Natural Gas Price Forecast – Rally on Cold Weather Forecasts

Natural gas markets have gapped higher to kick off the trading session on Tuesday, reaching towards the $2.95 level. This is based upon colder than temperatures coming in the United States, which of course will drive up massive amounts of demand in this market. That makes quite a bit of sense, because quite frankly the market is very cyclical, and it makes quite a bit of sense that the traders out there would be bidding up the price of the commodity.

NATGAS Video 21.10.20

If we can break above the $3.00 level, the market is very likely to go much higher, perhaps reaching towards the $3.25 level next. After all, this market does tend to rally this time year every year, and as long as we have a “real winter” in the United States, it is very likely that we have further demand. Beyond that, we have seen a lot of bankruptcies during the year, as natural gas has been oversupplied for some time.

All of that being said, that does not mean that we break out to the upside right away. The market more than likely will have the occasional pullback, perhaps down towards the $2.60 level where the 50 day EMA is reaching towards. All things being equal, you certainly cannot short this market anytime soon, so looking at pullbacks as potential buying opportunities makes the most sense. At this point, I am either buying a breakout above the $3.00 level, or buying a pullback, perhaps closer to the $2.65 region.

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

Gold Price Forecast – Gold Markets Continue to See Choppiness

Gold markets went back and forth during the trading session on Tuesday, as we continue to dance around the 50 day EMA. This is a market that will obviously be paying close attention to the idea of stimulus out the United States and of course whether or not the global economy will get better, or possibly even worse. Gold is longer-term bullish, but it does look to me like we are continuing a slow drift lower.

Gold Price Predictions Video 21.10.20

Gold markets of course are reacting to various issues, not the least of which would be fear, but we also have to worry about whether or not the US dollar is going to strengthen. It is very well could, especially if we do not get stimulus anytime soon. After all, this is a market that is typically priced in US dollars, but we also have the longer-term aspect of central banks around the world flooding the markets with liquidity. In other words, gold should be bullish against a multitude of currencies, not just the greenback.

A lot of traders are paying attention to whether or not Congress can get stimulus through anytime soon, and quite frankly it looks very unlikely considering that the election is so close. Once the market finally gives up on the idea, that could send the US dollar much higher and therefore put more downward pressure on gold. I believe that ultimately the gold market is going to find plenty of support underneath at the $1850 level, and most certainly at the $1800 level which is now starting to attract the attention of the 200 day EMA as well.

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

Silver Price Daily Forecast – Silver Tries To Settle Above The 50 EMA

Silver Video 20.10.20.

Silver Gains Ground On Weaker U.S. Dollar

Silver continues its attempts to settle above the nearest resistance level at the 50 EMA at $24.50 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 93.50 and is declining towards the 93 level. If the U.S. Dollar Index settles below the support at 93.00, it will gain additional downside momentum which will be bullish for silver.

Meanwhile, gold is stuck at the 50 EMA level at $1905. Gold failed to develop any momentum in recent trading sessions but managed to stay above the $1900 level. If gold moves above the 50 EMA, it will have a chance to develop upside momentum and get to the test of the next resistance at $1930 which will be bullish for silver and other precious metals.

Gold/silver ratio continues its downside move and is currently declining towards the 77 level. If gold/silver ratio gets below 77, it will move towards the recent lows near 75.50 which will be a favorable scenario for silver.

Technical Analysis

silver october 20 2020

Silver is trying to move above the nearest resistance level at the 50 EMA. Silver has already tested this resistance level several times but failed to gain sufficient upside momentum.

If silver manages to settle above the 50 EMA, it will move towards the highs reached during the previous trading session near $25.00. A move above $25.00 will open the way to the test of October highs at $25.55.

On the support side, the nearest support level for silver is located at $23.90. There are no material levels between $23.90 and the 50 EMA at $24.50 so silver may quickly get to the test of the nearest support level in case the right catalysts emerge.

A move below the support at $23.90 will push silver closer to the next support level at $23.30.

From a big picture point of view, silver needs to settle above the 50 EMA in order to continue its upside move. If silver fails to move above this resistance level, the risks of a sell-off will increase.

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