Price of Gold Fundamental Daily Forecast – Strengthens Over $1236.90, Weakens Under $1222.70

Gold is trading lower shortly before the regular session opening on Wednesday. Profit-taking and position-squaring in reaction to a rebound in stocks and a firmer dollar are weighing on prices. Traders are also lightening up on the long side ahead of the release of the Fed minutes at 1800 GMT.

At 0949 GMT, December Comex Gold is trading $1229.90, down $1.00 or -0.07%.

Gold improved on Tuesday, but the market posted an inside move, which typically indicates investor indecision and impending volatility. Traders said the gains were related to short-covering. New longs appeared to be scarce since the rally in the equity markets forced them to re-evaluate their reasons for being long.

If you recall, gold rallied last week primarily on safe-haven buying due to a steep two-day drop in U.S. equity markets. That move may have been fueled by a rapid rise in U.S. Treasury yields. If yields continue to consolidate and stocks continue to recover from last week’s steep sell-off then gold buyers may decide to start booking profits.

In other gold related news, according to CNBC, “holdings of the largest gold-backed ETF, SPDR Gold Trust, rose nearly 2 percent last week. That was its biggest weekly inflow since January, with the fund having registered declines of more than 4 million ounces since hitting a peak in late April. Holdings rose 0.6 percent to 748.76 ounces on Monday.”

Forecast

Demand for risk, economic reports and the Fed minutes should dictate the direction of the gold prices on Wednesday.

Strong U.S. economic data and hawkish Fed minutes should be bullish for Treasury yields which will make the U.S. Dollar a more attractive investment and put pressure on dollar-denominated gold.

U.S. Building Permits are expected to come in at 1.27 million units. This will be up slightly from 1.25 million units. Housing Starts are forecast at 1.22 million units, down from 1.28 million units.

The Fed is scheduled to release the minutes of its September meeting at 1400 GMT. Traders will be looking for more details as to the pacing of the central bank’s future rate hikes. At the meeting, the Fed increased its benchmark rate by 25 basis points, while hinting at a similar move in December. The central bank also said it could increase rates at least three times in 2019 and perhaps once more in 2020.

One thing that traders don’t expect the minutes to reflect is last week’s rapid rise in U.S. Treasury yields and its negative impact on the stock market.

 

Natural Gas Price Fundamental Daily Forecast – Likely to Straddle $3.306 Until EIA Data is Released on Thursday

Natural gas prices are trading firm early Wednesday, supported by forecasts for cooler temperatures in several key demand areas. However, gains are being limited by reports of high production and general uncertainty ahead of this week’s U.S. Energy Information Administration’s weekly storage report on Thursday.

At 0839 GMT, December Natural Gas is trading $3.319, up $0.018 or +0.55%.

Yesterday’s two-sided price action was fueled by offsetting U.S. temperature forecasts. According to the latest data from the National Weather Service, much of the Midwest, Northeast and Southern regions of the U.S. are forecast to experience below-average temperatures. At the same time, warmer-than-average temperatures are in the forecast for the Rockies, Northwest and Southwest regions. The forecasts are driving up both gas-fired power burn and heating demand.

Over the next two weeks, demand is estimated to decline slightly and average 80 Bcf/d as power burn and residential and commercial demand weaken, according to Platts Analytics.

Platts Analytics is also estimating that production will rise over the next two weeks and average 83.1 Bcf/d as shoulder season maintenance projects wind down.

In October so far, output averaged 83.4 Bcf/d, up nearly 10 Bcf from year-ago levels of 73.6 Bcf/d.

Forecast

The current short-term range is $3.409 to $3.202. Its mid-point is $3.306. This price is controlling the short-term direction of the market.

A trade through $3.409 will signal a resumption of the uptrend. A trade through $3.202 will change the main trend to down.

Unless the forecasts call for extreme cold temperatures or an extended cold spell, the $3.409 top will be hard to exceed at this time. If you recall, this top was put in last week during the height of the hurricane scare.

At the same time, unless we see a large jump in production or injections, the bottom at $3.202 is likely to remain intact over the near-term.

Therefore, I have to conclude that we’re likely to see a sideways trade with the market straddling the pivot at $3.306 most of the session.

Thursday’s EIA report is expected to show an injection of 85 Bcf.

Oil Price Fundamental Daily Forecast – API Data Shows Unexpected Draw, EIA Traders Looking for Build

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled higher on Tuesday after the American Petroleum Institute reported a surprise crude oil draw. The market also continues to be supported by geopolitical tensions over the disappearance of a prominent Saudi journalist. Some are saying if the Saudi’s are pushed too hard on the issue, they may retaliate by pulling supply from the market.

At 0813 GMT, December WTI crude oil is trading $71.98, up $0.22 or +0.28%. January Brent crude oil is at $81.30, up $0.26 or +0.32%.

API Report

According to the API, U.S. crude inventories fell by 2.13 million barrels during the week-ending October 12. Analysts were looking for an inventory build of 2.167 million barrels.

The API also reported a 3.4 million barrel draw in gasoline inventories for the week-ending October 12. Analysts had forecast a draw of 1.074 million barrels.

Distillate inventories were down during the same period by 246,000 barrels, compared to a larger expected draw of 1.280 million barrels.

Inventories at the Cushing, Oklahoma, futures hub increased by 1.5 million barrels.

Forecast

The direction of the crude oil markets on Wednesday is likely to be determined by trader reaction to the U.S. Energy Information Administration’s weekly inventories report, due to be released at 1430 GMT. The report is forecast to show a build of 1.6 million barrels during the week-ending October 12. However, the estimate may change ahead of the report due to the surprise API inventories number.

In other news, according to CNBC, U.S. President Trump gave Saudi Arabia the benefit of the doubt in the disappearance of journalist Jamal Khashoggi even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.

This is important because according to rumors, Saudi Arabia could cut as much as 500,000 barrels per day of crude production in response to any U.S. sanctions. If this were to occur, prices could rise $10 to $20 over the near-term.

Supporting the market are reports that Iranian crude exports are falling faster than anticipated ahead of the start of the November 4 sanctions. Perhaps in response to this news, OPEC Secretary-General Mohammad Barkindo urged oil producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.

Helping to keep a lid on prices early is a report on one of Russia’s top energy companies, Gazprom Neft. The company apparently is no longer capping oil output increases by local producers.

 

Gold Price Futures (GC) Technical Analysis – Failure to Hold $1222.70 Could Trigger Break into $1210.60

Gold futures are trading lower early Wednesday as investors booked profits after last week’s run-up. The catalysts behind today’s liquidation-led pressure are increased demand for risky assets and a firmer U.S. Dollar. Traders are also paring positions ahead of today’s U.S. Federal Reserve monetary policy minutes due to be released at 1800 GMT. They are expected to offer some insight on the pace of future interest rate hikes.

At 0651 GMT, December Comex Gold futures are trading $1226.50, down $4.60 or -0.37%.

Comex Gold
Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1236.90 will signal a resumption of the uptrend. The next target is the main top at $1244.70. The main trend will change to down on a trade through $1184.30.

The main range is $1278.20 to $1167.10. Its retracement zone at $1222.70 to $1235.80 is providing both support and position today. Trader reaction to this zone will likely determine the near-term direction of the market.

The short-term range is $1184.30 to $1236.90. Its retracement zone at $1210.60 to $1204.40 is the nearest support zone.

Another main range is $1325.40 to $1167.10. If there is another upside breakout then its retracement zone at $1246.30 to $1264.90 will become the first upside target.

Comex Gold.
Daily December Comex Gold. (Close-Up)

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the December Comex Gold futures contract on Wednesday is likely to be determined by trader reaction to the 50% level at $1222.70.

Holding $1222.70 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into $1235.80 to $1236.90.

Taking out $1236.90 is could trigger a breakout into $1244.70 to $1246.30.

A sustained move under $1222.70 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target zone $1210.60 to $1204.40.

Since the main trend is up, buyers may step in on a test of $1210.60 to $1204.40. They are going to try to produce another secondary higher bottom.

Crude Oil Price Update – Holding $71.61 Could Trigger Rally to $73.55

U.S. West Texas Intermediate crude oil futures are trading slightly better early Wednesday. However, the price action has been limited by low volume ahead of today’s U.S. Energy Information Administration’s (EIA) weekly inventories report, due to be released at 1430 GMT.

Today’s early strength is being fueled by momentum created by Tuesday’s higher close. Prices rose yesterday after the weekly American Petroleum Institute (API) report surprisingly showed U.S. crude inventories fell by 2.13 million barrels during the week-ending October 12. Analysts were looking for an inventory build of 2.167 million barrels.

At 0612 GMT, December WTI crude oil is trading $71.90, up $0.14 or +0.22%.

Today’s EIA report is expected to show a 1.6 million barrel build, however, this forecast could change due to the API number.

WTI Crude Oil
Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $70.37 will indicate the selling is getting stronger. A move through $67.74 will change the main trend to down.

The minor trend is down. This is why the momentum shifted to the downside. A trade through $75.16 will change the minor trend to up and change momentum to up.

The market has been trading inside the wide range formed on October 11 for four sessions. The high of the range is $72.63. The low of the range is $70.37. This formation tends to indicate trader indecision and impending volatility. Taking out $72.63 will make $70.37 a new minor bottom.

The main range is $66.50 to $76.72. Its retracement zone is $71.61 to $70.37. This zone is controlling the near-term direction of the market. Holding above this zone will give crude oil an upside bias.

The short-term range is $76.72 to $70.37. If today’s early strength creates enough upside momentum, we could see a move into the short-term retracement zone at $73.55 to $74.29.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December WTI Crude Oil market on Wednesday is likely to be determined by trader reaction to the main 50% level at $71.61.

A sustained move over $71.61 will indicate the presence of buyers. Taking out $72.63 could trigger a spike into at least $73.55.

A sustained move under $71.61 will signal the presence of sellers. If the selling momentum is strong enough, we could see a drive into $70.40 then $70.37. The latter could be the trigger point for an acceleration to the downside. There is no major support under this level until $67.74.

Silver Price Forecast – Silver markets continue to show strength

Silver markets initially tried to rally during the trading session on Tuesday but ran into a lot of resistance at the $14.90 level. We ended up forming a couple of shooting stars on the hourly chart, so I think a pullback is very likely. That’s not to say that I think we should be selling a here, I think your best trade is probably to simply wait on the sidelines and look for value underneath it we can take advantage of. Some type of supportive bounce could make a nice trade, because it makes sense that we would struggle at these high levels.

After all, we have rallied quite nicely, and are approaching a major round number in the form of the $15. If we were to break above the $15 level, then the market could continue to go much higher. I see support underneath at $14.70, $14.60, and most certainly $14.50. Silver markets tend to move every $0.10, in a back-and-forth manner as it is a highly technical situation and of market. At this point, I suspect that silver needs to cool off a bit before we can build up enough momentum to finally break that crucial $15 level. Once we do, I think the next target will be somewhere near the $15.20 level based upon longer-term historical charts. If we were to break down below the $14.50 level, that could send this market much lower. Overall though, I think that silver is also getting a boost from the safety trade as there are so many different problems around the world.

SILVER Video 17.10.18

Crude Oil Price Forecast – crude oil markets continue to chop

WTI Crude Oil

The WTI Crude Oil market rallied a bit during the trading session after initially falling on Tuesday, as we continue to see $71 offer a bit of support. However, the $72 level, and the area just above it, continues to be very resistant. I think that the market continues to be very noisy and difficult, but eventually we will probably break out to the upside as we worry about supply issues and the Iranian sanctions that could cause them.

At this point, I suspect that a move above the $73 level is needed for confidence, then I think buyers would come in and push the market to the $75 handle. However, if we pull back and broke below the $71 level, we would probably find support at the $70 level.

Brent

Brent markets found support at the $80 level, reaching towards the $81 level after initially falling from there during the trading session on Tuesday. At this point, the $82 level would be the target, but there is so much in the way of noise that is difficult to hang onto a trade. I suspect that longer-term traders are buying the dips and hang on but you need to have the appropriate trade size and the appropriate capital backing that position. If we were to break down below the $79 level, then I think we would break down rather significantly.

Oil Forecast Video 17.10.18

Natural Gas Price Forecast – natural gas markets fall on Tuesday

Natural gas markets drifted a bit lower during the trading session on Tuesday as we continue to try to digest all of these massive gains that we have had as of late. The $3.15 level underneath is pretty supportive, but I also think that the $3.20 level could offer a bit of support. If we bounce from here, it’s likely that the market could go back to the $3.30 level, and I think we more than likely will. However, we are extremely elevated at this point, and I would be the first to point out that we had printed a couple of shooting stars on the daily chart recently. It’s because of this that I think we continue to draw conclusions that we need to find buyers underneath.

I think short-term sellers will continue to punish this market, but eventually there should be buyers underneath. I believe that the $3.00 level underneath will be massive support based upon its psychological significance and of course its structural significance as well. I do believe that this time of year tends to attract more buying than selling, because quite frankly it’s getting colder in the United States and we are trading the November contract in the futures pits, which of course drives up the value as well, mainly because the demand should continue to go higher. However, I think that we will eventually find reasons to go higher but I also recognize that the $3.35 level above has been massive resistance. Ultimately, this market will be bullish for a while, but sometime early next year we will start to see sellers again run this market longer-term.

NATGAS Video 17.10.18

Gold Price Forecast – Gold markets continue to grind sideways on Tuesday with slight upward tilt

Gold markets when sideways during the day on Tuesday, which is something that is not overly surprising, considering that we had rallied so strongly during the previous week. I think that the $1250 level above is massive resistance, so I don’t know that we can break above there. If we do approach that level, I think it would take another catalyst to continue going higher. Pullbacks at this point should continue to find buyers underneath, and I think that the $1220 level is an excellent area to look for support.

One thing that I can say about this market is that we have gone sideways overall after a massive rally, and that is a good sign as it looks likely to make traders much more comfortable at these higher levels instead of the usual pullback that you would get after a surge higher. The longer we sit sideways, the more likely we are to break out to the upside, so this is actually a very good sign for the buyers. It shows that many of the buyers have simply not left the market and they are perfectly comfortable holding onto Gold at this point.

If the US dollar starts to skyrocket in value again, that could drive down the value of gold, unless it is a bit of a safety trade, then we could see Gold markets rally right along with the US dollar, something that does happen occasionally.

Gold Technical Analysis Video 17.10.18

Natural Gas Price Prediction – Strong IP Fails to Buoy Prices

Natural gas prices where lower after attempting to break out on Tuesday.  Colder than normal weather is expected to cover most of the east coast for the next 6-10 days, and then the weather is expected to moderate but remain cold over the 8-14-day period. There are no tropical disturbances in the Atlantic or the Caribbean. The hurricane season is now coming to a close.  Stronger than expected industrial production could help buoy natural gas demand. Traders await Thursday’s inventory report scheduled to be released by the Department of Energy.

Technical Analysis

Prices attempted to break out on Tuesday but were unsuccessful and slumped back to close near the bottom end of the daily range down on the session. Support is seen near the 10-day moving average at 3.222. Resistance is seen near the October highs at 3.37. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which reflects consolidation. The RSI is also moving sideways after dipping slightly. The current reading on the RSI is 62, which is on the upper end of the neutral range but the trajectory points to further consolidation in prices.

Industrial Production Was Strong

Industrial production increased by 0.3% month over month in September after rising 0.4% in August.  Manufacturing output grew at a 3.3%  year over year in the Q3 rising at a 5.3% climb in the Q2.  The Fed said industrial output in September had been held down by Hurricane Florence, which clobbered North Carolina in mid-September. The U.S. central bank estimated the impact of the storm on industrial production as minor. Manufacturing output increased 0.2% in September after rising 0.3% in August. IP was helped by a robust 1.7% month over month increase in automobile production which buoyed manufacturing in September. This follows a robust 4.3% increase in auto production in August.

Gold Price Prediction – Gold Consolidates Forming Bull Flag Pattern

Gold prices attempted to move higher on Tuesday but were unable to pierce through resistance levels. Prices were unable to make a new high for October and continues to form a bull flag pattern. Stronger than expected Jobs Openings along with a robust Industrial production, buoyed the dollar, while yields remained flat. It appears that wage growth is lagging the lack of labor.

Technical Analysis

Gold prices were unable to make a fresh higher and continue to generate a bull flag pattern which is a pause that refreshes higher. Resistance is seen near the October highs at 1,233.  Support is seen near the 20-day moving average at 1,201. The trend is positive as the 20-day moving average crossed above the 50-day moving average, which means a medium term uptrend is now in place. The MACD histogram is accelerating higher which shows that momentum is on its way higher. The fast stochastic surged into overbought territory printing a reading of 84, above the oversold trigger level of 80, which could foreshadow a correction.

Jobs Data Was Strong but Wages Have Yet to Climb

The JOLTS reported showed that job openings hit a record in August, indicating companies could face more inflationary pressures as wages climb. The vacancies level hit 7.14 million for the month, according to the Federal Reserve. The total number of hires also reached a record of 5.78 million.

Openings trumped total level of workers looking for jobs, which stood at 6.23 million for that month and fell to 5.96 million in September. The JOLTS is closely as in indicator of when worker wages might start catching up with the acceleration in employment and the rapid decline in unemployment.

The quits rate, which reflects confidence that people can easily find other jobs edged just a shade lower from July to 3.58 million. The rate, which counts those who voluntarily left positions, jumped 12.7% from August 2017.

Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $3.306 Will Determine Today’s Direction

Natural gas futures are trading higher on Tuesday, but investors are giving back earlier gains as they continue to assess the latest weather forecasts and demand projections. The latest projections from the National Weather Service (NWS) call for below-average cold temperatures over the near-term. This news helped boost prices on Monday.

At 1200 GMT, December Natural Gas is trading $3.333, up $0.23 or +0.69%.

Prices surged earlier in the session to $3.377, but the rally stalled as the market approached last week’s high at $3.409. That top was put in as investors assessed potential damage from Hurricane Michael.

The new weather pattern investors are watching showed up in the models over the week-end. They show an early-season cold snap for most of the country. The new 11 to 15-day forecast shows a blast of cold hitting the U.S., particularly in the South and in the Midwest.

This report is being called a surprise because earlier forecasts called for warmer temperatures into December then for cold to arrive in January and primarily in February. During October, cooling and heating demand is usually equally balanced. However, this month started with near-record heat then temperatures flipped to cold.

Forecast

With natural gas storage at low levels as we near the start of the winter heating season, prices are expected to remain firm. The amount of natural gas in storage is below the five-year historical range. At 2,956 billion cubic feet, as of October 5, it was slightly higher than the week before but still well below the five-year historical range.

The long-term plan is to get long and stay long throughout the winter, however, there are going to be short-term swings due to changing weather patterns and strong production. In other words, don’t expect a prolonged rally unless there is a lingering cold spell. Furthermore, professionals prefer to buy dips. Speculators tend to chase the market higher.

Despite the potentially bullish weather pattern, the direction of the December Natural Gas futures today is likely to be determined by trader reaction to the 50% level at $3.306.

A sustained move over $3.306 will indicate the presence of buyers. This will put the market in a position to challenge $3.409 over the near-term. If $3.306 fails as support then prices could retreat into at least $3.202 to $3.161 over the near-term.

Price of Gold Fundamental Daily Forecast – Cautious Buyers as Market Sits Near 2-1/2 Month High

Gold futures are trading slightly better early Tuesday, remaining just under a 2-1/2 month high hit on Monday. The market continues to be underpinned by safe-haven buying tied to rising political tensions and economic turmoil.

At 1150 GMT, December Comex Gold is trading $1233.40, up $3.00 or +0.24%.

After wallowing in a range for nearly two months, gold finally broke out to the upside, primarily driven by last week’s stock market sell-off. Also helping to boost prices, however, were escalating trade tensions, concerns over slowing global growth, geopolitical tensions and U.S. mid-term election jitters.

The move is being fueled by a strong combination of aggressive short-covering and speculative buying.

Traders are monitoring the geopolitical tensions over the disappearance of the Saudi Arabia journalist, however, so far the news has been limited to the political sphere. Traders essentially want to know if the Saudis are responsible. How the U.S. will respond if they are and whether there will be any retaliation from Saudi Arabia.

Minor reports on Tuesday include: Capacity Utilization, Industrial Production, JOLTS Job Openings, NAHB Housing Market Index and TIC Long-Term Purchases. FOMC Member Daly is scheduled to speak and the Treasury may release its currency report.


Suggested Articles


Capacity Utilization is expected to come in slightly better than last month at 78.2%. Industrial Production should dip modestly to 0.2%.

JOLTS Job Openings is expected to come in slightly below last month’s figure at 6.90 Million. The NAHB Housing Index is forecast at 68, up from 67.

TIL Long-Term Purchases are estimated at 50.3 Billion, down from 74.8 Billion.

Capacity Utilization and Industrial Production are likely to move gold prices if they miss a lot to the downside since they indicate economic growth.

Oil Price Fundamental Daily Forecast – API Report Expected to Show 1.1 Million Barrel Build

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Tuesday after giving up earlier gains. The initial strength was fueled by reports that Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Tehran that are set to begin on November 4.

At 0738 GMT, December WTI Crude Oil futures are trading $71.35, down $0.26 or -0.36% and January Brent Crude Oil is at $80.20, down $0.23 or -0.29%.

According to the latest data from Refinitiv Eikon, Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, down from 1.6 million bpd in September. In April, prior to President Trump’s announcement of the U.S. withdrawal from the multi-lateral nuclear deal with Iran, Iran exported 2.5 million bpd.

In other news, crude oil is being underpinned by geopolitical tensions caused by the disappearance of a Saudi Arabian journalist in Turkey. Turkish officials have alleged Saudi Arabian intelligence officers killed the journalist Jamal Khashoggi on October 2 at the Saudi consulate in Istanbul. President Trump has threatened “severe punishment” for the kingdom if the journalist is found to have been killed. Saudi Arabia has denied the allegation. Saudi Arabian officials have also said the nation would retaliate against any actions taken over the Khashoggi case.

Forecast

Another drop in Iranian exports should have been bullish for crude oil, but gains may have been limited by concerns over demand.

Traders are monitoring the geopolitical tensions over the disappearance of the Saudi Arabia journalist, however, so far the news has been limited to the political sphere. It could enter into the oil world if the Saudi’s are forced to retaliate by pulling crude from the market. This could turn into an extremely bullish event if it means less supply.

Traders will also be paying close attention to this week’s supply reports. Prices could be weighed by an increase in U.S. crude inventories.

On Tuesday, the weekly American Petroleum Institute (API) report is expected to show a build of about 1.1 million barrels in the week-ended October 12. This would mark the fourth straight week of increases. On Wednesday, the U.S. Energy Information Administration is expected to report a similar figure.

Both WTI and Brent futures are expected to remain rangebound over the near-term. Support is being fueled by concerns over a supply shortage. Worries over demand and rising U.S. inventories are providing the resistance.

 

Precious Metals Trade Flat on Profit Booking Activity

Precious metals saw positive price action on Monday as investors took a risk averse stance leading to some amount of activity in gold and silver as they are viewed as safe Haven instruments despite both instruments losing luster in recent days owing to US Greenback taking the positive of most sought after safe haven instrument of 2018. Gold hit a 2-1/2 month high the previous session in spot market influenced by multiple factors such as rising political tensions between west and Saudi Arabia & economic uncertainty in European markets owing to Italian Budget proceedings. As of writing this article, Spot Gold XAUUSD is trading near flat at $1226.66 an ounce down by 0.02% on the day, while US gold futures GCcv1 was trading at $1230.40 an ounce up 0.0081% on the day.

Saudi Threatens US Over Interference in Matter Concerning Murder of Saudi journalist

The price action in gold remains flat near yesterday’s high’s despite falling from previous day’s intra-day high as investor sentiment in market still has cautious tone and risk averse scenario seems to be active as well. The reason for flat price action in gold could be said to be result of profit booking activity after the instrument hit new highs and lack of trigger to push the pair forward. Spot silver market saw some significant downtrend activity today with XAGUSD pair trading at $14.647 an ounce down by 0.32% on the day. While gold hit new high’s yesterday spot silver’s price action was relatively muted despite trading in green for majority of Monday’s market hours. Crude oil price shot up as trading session started for the week owing to multiple reasons such as increase in tension between US & Saudi Arabia and signs of further decline in Iranian crude exports for the month of October.

Saudi Arabia all but threatened to drive up oil prices if the U.S. took any action to penalize it over the apparent killing of a Saudi journalist. The not-so-subtle threat was the first time in decades that Saudi Arabia threatened to restrict supply for such naked political reasons. If Saudi follows up on its threat, then the chance of crude oil price crossing $100/b is highly likely which will cause great inconvenience for President Trump who has been protesting the hike in crude oil price in recent past. Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, according to Refinitiv Eikon data, which is down from 1.6 million bpd in September as per the data. Spot US Crude WTIUSD is currently trading at $71.56/b down 0.26% on the day after hitting an intra-day high of $72.11/b in early Asian market hours.

 

Silver Price Forecast – Silver markets continue to find buyers

Silver markets pulled back a little bit during the trading session initially but found enough support near the $14.70 level to turn around and rally again. Overall, I think that the market is reaching towards the $15 level above, which of course will attract a lot of psychological interests. Overall, the markets continue to be more of a “buy on the dips” type of situation. As long as there is so much in the way of uncertainty out there in an economic sense, I think that people are going to be coming back to the precious metals for safety. Silver markets had been artificially negative for quite some time, as there are a lot of paper shorts out there, but there is a significant demand for silver overall. I think that given enough time, the market probably will continue to reach towards the $15 level, which makes a lot of sense considering that there are a lot of concerns out there, and of course a lot of technical traders will be attracted to these big figures.

Underneath, I see a significant amount of support near the $14.60 level, and of course at the $14.70 level as seen during the day. I think given enough time, we will try to find buyers at one of those levels if we do pull back. I don’t have any interest in shorting Silver right now, it is far too strong and I don’t want to fight this trend.

SILVER Video 16.10.18

Crude Oil Price Forecast – crude oil markets pulled back to start the week after gapping higher

The BTI Crude Oil

The WTI Crude Oil market fell significantly during the trading session on Monday after initially gapping much higher, before reaching down towards the $71 level. This is an area that has been supportive, and it looks as if the buyers are willing to step in near that area. I also believe that the $70 level underneath is a massive support level based upon the round figure. At that point, I think if we break down below there the crude oil markets could be in serious trouble. I suspect that we will continue to have buyers underneath though, as we continue to see choppy trading conditions.

Brent

Brent markets tried to gap higher initially during the session on Monday as well but found the $82 level to be far too resistive. Because of this, we broke down to the $80 level underneath, which is an area that of course has a certain amount of psychological importance built into it. I think the $79 level underneath is massive support based upon the recent bounce, so now I think we may be trying to form a little bit of a basing pattern, but obviously we are very volatile, so I be very cautious about jumping in with too large of a position. Brent markets continue to be a “buy on the dips” scenario.

Natural Gas Price Forecast – natural gas markets gap higher to start week

Natural gas markets gap higher to kick off the week, and then pulled back to find buyers again. Now we are reaching towards the $3.25 level, an area that is extreme short-term resistance. If we can break above there, the market probably goes looking towards the $3.35 level, and I think at this point it’s obvious that the buyers run the show. However, we are a bit overextended at the moment, and I think that the prudent way to trade this market is the pullback and find value occasionally. At that point, I’m willing to buy on signs of support, and it looks as if the $3.15 level is starting to act as support as well. Longer-term, I think that we are simply in the seasonally strong part of the year anyway, so I believe that buying is probably the easiest thing to do.

If we were to break down below the $3.10 level, we could go down to the $3.00 level which of course is massive psychologically supportive. Overall, this is a market that will probably be bullish for the next two months, especially if temperatures in the United States continue to drop as they should. Remember, this market is very sensitive to the weekly inventory figure, and of course weather reports coming out of the northeastern part of the United States. Beyond that, the question is starting to come out as to whether or not we are going to have industrial demand, which could weigh upon pricing as well. After all, the economy in the US is rather strong, but there are cracks appearing occasionally.

NATGAS Video 16.10.18

Gold Price Forecast – Gold markets continue to levitate

Gold markets broke above the $1230 level, an area that has been resistance, and now it looks like we’re going to pull back to the $1230 level to find buyers. At this point, it’s very likely that we should continue to go higher, perhaps reaching towards $1250 level. Underneath, I see the $1220 level as being very supportive, so a break down below there would of course change a lot. That would probably coincide with strength in the US dollar, which of course does happen when people start to freak out although gold has enjoyed a bit of buoyancy due to the exact same issue.

Gold markets have benefited from a lot of the uncertainty around the world, and it looks as if we are going to continue to see that going forward. I think that the $1250 level above will be a bit resistive, and if we were to break above there, this market can really start to take off. The Gold markets have recently found a lot of support near the $1200 level, which was technically and structurally important. Now that we have found that the be an area where buyers are willing to get back involved, I think that it’s likely that we will eventually get value hunters here, so I would be willing to buy gold, but in small bits and pieces in order to build up a larger position. Shorting isn’t something that I’m interested in at the moment as we have seen such a huge move in the precious metals arena.

Gold Prices Video 16.10.18

Natural Gas Price Prediction – Prices Rally 2.8% on Cold Weather Forecast

Natural gas prices moved higher on Monday as colder than normal weather is forecast to move east generating additional heating demand during the balance of October.  While supply over the past week was flat, demand increased as higher power generating was need increasing consumption by 1%. The trajectory of inventory injections remains flat, which should increase demand over the next 2-weeks.

Technicals

Natural gas prices moved higher rising by 2.88%, making a higher high and a lower high which is an uptrend. Support is seen near the 10-day moving average at 3.21. Resistance is seen near the October highs which coincides with a downward sloping trend line that comes in near 3.36. Momentum is flat as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.

Supply Was Flat This Week

Supply remains flat in the latest week according to the EIA as the average total supply of natural gas remained the same as in the previous report week, averaging 91.1 Bcf per day. Dry natural gas production also remained constant week over week. Average net imports from Canada increased by 2% from last week.

Demand Increased

Demand increases with higher power generation. Total U.S. consumption of natural gas rose by 1% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 4% week over week. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption declined by 1%. Natural gas exports to Mexico decreased 3%.

U.S. LNG exports are flat week over week

Four LNG vessels with a combined LNG-carrying capacity of 15 Bcf departed the United States from October 4 to October 10. One tanker (was loading at Sabine Pass on Wednesday. There were no LNG exports from the Cove Point liquefaction terminal last week and no natural gas feedstock deliveries by pipeline as the facility continues its scheduled maintenance.