USD/CAD Price Prediction – The USD/CAD Eases from Overbought Territory

Canada’s economic highlight this coming week is April retail sales.  With oil prices rising, Canada a significant exporter of black gold gained traction and has had a robust upward trend against the Greenback since hitting a high in April of 2020. U.S. yields have been the key to the USD/CAD. The recent rebound is the expectations of the market that the Fed will reduce bond purchases sooner rather than later.

Technical Analysis

The U.S. dollar surged higher against the Canadian dollar last week, rising 2.5%.  The USD/CAD closed above trend line resistance and ran out of steam near 1.25 as prices moved into overbought territory.  The currency pair appears to be testing the breakout level, which will be key support. Ahead of the gains seen by the CAD, the USD/CAD was overbought as the fast stochastic was printing a reading of 96, well above the overbought trigger level of 80, foreshadowing a correction.

The relative strength index (RSI) ahead of Monday’s rally in the Loonie was printing a reading of 74, above the overbought trigger level of 70, which foreshadows a correction. 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 for the USD/CAD.

Yields Ease

The pullback in U.S. yields has helped the Loonie gain traction. The change of dot plots by the Federal Reserve helped the 2-year yield gain 6-basis points, which helped the dollar surge higher. The markets are now incorporating the likelihood that the Fed will be on hold for a while, taking some of the steam out of the Greenback. If prices are also to hold support, look for another leg up in the U.S. dollar.

Silver Price Prediction – Prices Edge Higher from Oversold Territory

Silver prices bounced slightly but failed to gain traction like gold. The slip in the dollar failed to buoy prices which appear to be forming a topping pattern. Instead, strong U.S. yields have helped buoy the greenback paving the way for lower gold prices. Silver has also felt the downward pressure of falling copper prices which have also created headwinds for silver. The U.S. growth outlook from the Fed regional banks remains robust, which should continue to put upward pressure on yields and make it difficult for precious metals to gain a toe hold.

Technical Analysis

Silver prices moved higher on Monday but failed to gain traction ahead of support near an upward sloping trend line that comes in near 25.25. Resistance is seen near the 50-day moving average at 27.04. The 10-day moving average is poised to cross below the 50-day moving average which means that a downward trend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is also printing a reading of 15, below the oversold trigger level of 20 which foreshadows a correction. The RSI turned up slightly but never pushed through the oversold trigger level of 30. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a declining trajectory which points to lower prices.

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U.S. Growth Projection Remain Strong

The U.S. growth projections for the second quarter of 2021 remain strong.  According to the Atlanta Fed’s GDPNow model forecasts Q2 growth at 10.3% 10.5% previously, the New York Fed’s Nowcast model currently shows Q2 growth at a more modest 3.7% vs. 4.2%.   While the softer than expected U.S. retail sales weighed on growth projections, these numbers are still strong and will likely keep U.S. yields buoyed.

Natural Gas Price Prediction – Prices Slip as Tropical Threat Subsides

Natural gas prices moved lower on Monday, as tropical storm Claudet left the gulf and moved up the US coast into the Virginia area. Natural gas installations are out of the woods for that storm. According to the National Oceanic Atmospheric Administration (NOAA), another storm is moving across the Atlantic that has a 10% chance of becoming a tropical cyclone in the next 48-hours. According to the National Oceanic Atmospheric Administration (NOAA). According to NOAA, the weather is expected to remain warmer than normal on the west-Coast and cooler than normal on the East Coast. U.S. Consumption of gas will decline in 2021 year over year, according to the EIA.

Technical Analysis

Natural gas prices moved lower on Monday but remain in an upward trend with support near an upward sloping trend line that comes in near 3.05. Resistance is seen near the 10-day moving average at 2.21. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

U.S. Consumption Declines

U.S. consumption of natural gas will average 82.9 billion cubic feet per day down 0.5% from 2020. U.S. natural gas consumption declines because electric power generators switch to coal from natural gas as a result of rising natural gas prices. In 2021, residential and commercial natural gas consumption combined will rise by 1.2 Bcf per day from 2020 and industrial consumption will rise by 0.7 Bcf per day from 2020.

Gold Price Prediction – Prices Rebound as the Dollar Eases

Gold prices rebounded sharply on Monday, as the dollar eased and yields moved sideways. Despite the rebound, prices formed an inside day which is a sign of indecision. With the 2-year yield continuing to remain buoyed following the decision by the Federal Reserve which saw the dot plots change slightly, it will be hard for gold to gain traction.

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Technical analysis

Gold prices were nearly rallied sharply on Monday reversing some of last week’s decline. Prices remain well above support near the November 2020 lows of 1,764, Resistance is seen near the 50-day moving average at 1,832.  Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The current reading on the fast stochastic is 15, below the oversold trigger level of 20 which could foreshadow a correction. The RSI is also oversold printing a reading of 34 up from 28, which was below the oversold trigger level of 30 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

The Fed’s View is Mixed

Minneapolis Federal Reserve President Neel Kashkari said he wants to keep the U.S. central bank’s benchmark short-term interest rate near zero at least through the end of 2023. Kashkari’s remarks show he’s in a decided minority in an increasingly hawkish Fed.

Silver Price Prediction – Prices Close Near Session Lows Following Dead Cat Bounce

Silver prices attempted to move higher in tandem with gold but could not gain traction and closed near the open of the trading session. The trend is downward sloping. Silver prices closed down 7.23% for the week.  This drop followed Silver prices tumbling on Thursday, breaking through support levels. The dollar continued to rally following the Fed’s more hawkish than an expected commentary on Wednesday, as 7-Fed governors now expect the Fed to raise rates in 2022. The Fed’s Bullard did an interview with CNBC today where he said that the Fed’s comments were meant to be hawkish and believe there will be a rate hike in 2022.

Technical Analysis

Silver prices attempted to move higher but failed and broke down and are poised to test lower levels.  Support is seen near an upwards sloping trend line that comes in near $25.07. Resistance is seen near the 50-day moving average at 27.02. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. 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. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

The hawkish tone of the Fed was reiterated on Friday as the St. Louis Federal Reserve President James Bullard told CNBC that he sees an initial interest rate increase in late-2022 as inflation picks up faster than previous forecasts. Bullard at several points, described the Fed’s moves this week as hawkish or in favor of the tighter monetary policy.

Natural Gas Price Prediction – Prices Edge Lower but Hold Support Levels

Natural gas prices consolidated and moved slightly lower, as traders seem to ignore the tropical cyclone that has formed in the Gulf. The barometric pressure is already close to 1K which could mean this will be a big storm. The weather is expected to be mild, cooler than normal on the East coast, and warmer than normal on the West coast. There is a storm in the Gulf of Mexico which the National Oceanic Atmospheric Administration has labeled a tropical cyclone that has winds of 45-miles an hour. U.S. natural gas rig count rose by one to 97 from 96, according to Baker Hughes. The estimate was for a 2-rig count increase.

Technical

Natural gas prices moved slightly lower Friday but closed above the 10-day moving average at 3.21. Resistance is seen near the June highs at 3.37. Short-term momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought to neutral. Medium-term momentum is turning negative as the MACD (moving average convergence divergence) histogram print in the black with a declining trajectory and points to a crossover sell signal.

Rigs are Rising

In August 2020, the United States rig count fell to 244, the lowest level since at least 1987, according to data from Baker Hughes Company. However, as of June 8, the reported total number of active rigs in the United States had risen to 461, and 96 of those active rigs were directed at drilling for natural gas.

Gold Price Prediction – Prices Whipsaw and Fail to Gain Traction

Gold prices consolidated attempting to move higher but unable to gain any traction and closing near the open at the session’s lows. The price action with a doji day finish and a long upper wick shows a rejection of higher prices. The U.S. 10-year yield continued to move lower, but the 2-year remains firm. The dollar index rallied sharply and finished the week up nearly 2% which paved the way for lower gold prices.

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Technical analysis

Gold prices were nearly unchanged but the failure to rise should be seen as a negative. Prices are poised to test the November 2020 lows of 1,764, and then the weekly upward sloping trend line that comes in near 1,730. Resistance is seen near the 50-day moving average at 1,830.  Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The current reading on the fast stochastic is 3, below the oversold trigger level of 20 which could foreshadow a correction. The RSI is also oversold printing a reading of 28, below the oversold trigger level of 30 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Bullard See Rate Hike in 2022

CNBC is reporting that St. Louis Federal Reserve President James Bullard told the media outlet that he sees an initial interest rate increase in late-2022 as inflation picks up faster than previous forecasts had anticipated. Bullard at several points described the Fed’s moves this week as “hawkish,” or in favor of tighter monetary policy than what has prevailed since the onset of the Covid-19 pandemic.

Silver Price Prediction – Prices Tumble as the Dollar Rallies Despite Weak Jobless Claims Data

Silver prices tumbled on Thursday, breaking through support levels and poised to test lower levels. The dollar rallied following the Fed’s more hawkish than expected commentary on Wednesday, as 7-Fed governors now expect the Fed to raise rates in 2022. Jobless claims rose more than expected, which helped the 10-year yield ease following Wednesday’s rally. According to Mortgage News Daily, the average rate on the popular 30-year fixed mortgage moved decidedly higher, hitting 3.25%.

Technical Analysis

Silver prices tumbled on Thursday, breaking down and forming a topping pattern. Support is seen near an upwards sloping trend line that comes in near $25.07. Resistance is seen near the 50-day moving average at 27.01. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is flat as the MACD (moving average convergence divergence) histogram is printing in positive territory with a sliding trajectory that points to consolidation. After consolidating for weeks, prices have declined for 4-consecutive trading days but will like seeing buyers come near trend line support.

Yields Ease on Weak Claims Report

Initial jobless claims came in higher than expected, showing that the recovery in employment is not a straight line. First-time filings for unemployment insurance for the week ended June 12 totaled 412,000, compared with the previous week’s 375,000. Expectations were for a decline to 360,000. Since the Fed makes its decisions based on employment and price stability they are likely to let inflation run a bit hotter than expected to help buoy employment.

Natural Gas Price Prediction – Prices Consolidate as Storm in the Gulf Brews

Natural gas prices consolidated and moved slightly lower on Thursday in the wake of the Energy Departments’ inventory report. Expectations are for a 79 Bcf build in stockpiles, according to survey provider Estimize. There is a storm in the Gulf of Mexico which the National Oceanic Atmospheric Administration believes has a 90% chance of forming a tropical cyclone in the next 48-hours. The weather is expected to be mild and slightly warmer on the coast over the next 6-10 and 8-14 days, according to NOAA.

Technical

Natural gas prices moved slightly lower on Thursday bouncing near the 10-day moving average at 3.19. Resistance is seen near the June highs at 3.37. Short-term momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought to neutral. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram print in the black with a declining trajectory points to consolidation.

 Inventories Rise Less than Expected

Natural gas in storage was 2,427 Bcf as of Friday, June 11, 2021, according to the EIA. This represents a net increase of 16 Bcf from the previous week. Expectations were for a 79 Bcf build. Prices should have moved higher. Stocks were 453 Bcf less than last year at this time and 126 Bcf below the five-year average of 2,553 Bcf. At 2,427 Bcf, total working gas is within the five-year historical range.

Gold Price Prediction – Prices Fall as the Dollar Rallies Paving the Way for Lower Gold Prices

Gold prices continued to decline as the dollar rallied paving the way for lower gold prices Since gold is priced in dollars, it generally adjusts lower as it becomes more expensive in other currencies excluding the greenback. The U.S. 10-year yield reversed its rally, but the 2-year yield remained strong. Jobless claims came in larger than expected which is critical following Wednesday’s Federal Reserve meeting.

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Technical analysis

Gold prices moved lower declining for the 4th consecutive trading day, and poised to Test the November 2020 lows of 1,764. Resistance is seen near the 50-day moving average at 1,830.  Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The current reading on the fast stochastic is 8, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Jobless Claims Rise

The Labor Department reported that Initial jobless claims unexpectedly rose last week despite an ongoing recovery. First-time filings for unemployment insurance for the week ended June 12 totaled 412,000, compared with the previous week’s 375,000. Expectations were for a decline to 360,000. This is interesting in the wake of the Fed’s decision as employment is the key for higher rates. If claims continue to remain elevated, the Fed will remain on hold.

Silver Price Prediction – Prices Slide as the Dollar Pops Following Fed Meeting

Silver prices moved lower but rebounded from session lows as the dollar rallied and yields rose. Prices are looking toppy but have yet to rollover like gold. Silver prices have been rangebound and have not been able to gain any traction. The decline in copper prices has also weighed on silver prices as both are used in the industrial process. The U.S. 10-year increased 5-basis points while the 2-year yield rose 6-basis points, as the Fed changed its dot plots to show that 7 Fed officials believe rates will increase in 2022 compared to just four officials at the last Federal Reserve meeting. The Fed raised its view of growth and inflation.

Technical analysis

Silver prices slid on Wednesday but rebounded from session lows and remain rangebound. Support is seen near the 50-day moving average at 27.08.  Short-term resistance is seen near the 10-day moving average at 27.73. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The RSI (relative strength index ) also broke down to new lows which reflects accelerating negative momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

The Fed Increases Future Inflation Forecast

The Federal Reserve increased its inflation forecast but left interest rates unchanged as widely expected. However, the central bank did not indicate as to when it will begin cutting back on its aggressive bond-buying program. Officials raised their GDP expectations for this year to 7% from 6.5% previously. The unemployment estimate remained unchanged at 4.5%. The Fed raised its inflation expectation to 3.4%, a full percentage point higher than the March projection.

Gold Price Prediction – Prices Drop as Yields Surge

Gold prices continued to decline as the dollar gained traction in the wake of the Federal Reserve meeting. The U.S. 10-year yield popped 5-basis points while the 2-year yield rose 6-basis points. The Fed raised its view of growth and inflation. Housing starts rose 3.6% to an annual rate of 1.572 million units in May, but data for  April was revised down to 1.517 million units from the previously reported 1.569 million units.

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Technical analysis

Gold prices moved lower declining sharply for a 3rd consecutive session and bouncing near support is seen near the 50-day moving average at 1,830.  Short-term resistance is seen near the most recent trend breakdown at 1,872. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as  the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

The Federal Reserve left interest rates unchanged as widely expected but increased its forecast for both GDP and inflation. However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program. Though the Fed raised its headline inflation expectation to 3.4%, a full percentage point higher than the March projection.

Natural Gas Price Prediction – Prices Edge Higher Ahead of Inventory Report

Natural gas prices rebounded on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 79 Bcf build in stockpiles according to survey provider Estimize. There is a storm in the Gulf of Mexico which the National Oceanic Atmospheric Administration believes has a 70% chance of forming a tropical cyclone in the next 48-hours. The weather is expected to be mild and slightly warmer on the coast over the next 6-10 and 8-14 days, according to NOAA.

Technical

Natural gas prices rebounded on Wednesday, bouncing near support at the 10-day moving average at 3.18. Resistance is seen near the June highs at 3.37. Short-term momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought to neutral. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram print in the black with a declining trajectory points to consolidation.

Production Rises

U.S. natural gas production tops 93.0 Bcf per day according to the EIA. The average total supply of natural gas rose by 1.2% compared with the previous report week, Natural gas production grew slightly by 0.4% compared with the previous report week to 93.3 Bcf per day. Average net imports from Canada increased by 19.8% compared with the last report week to 4.6 Bcf per day, about 0.5 Bcf per day below the five-year average for this time period.

Silver Price Prediction – Prices Slip Ahead of Key Fed Meeting

Silver prices continue to chop sideways ahead of the Federal Reserve decision on Wednesday. The Fed started a two day meeting, which follows the U.S. retail sales report and producer price report.  PPI was much stronger than expected and shows that inflation is accelerating. Jay Powell’s commentary should describe this information and let the markets know they are tracking this closely. The dollar and U.S. yields moved sideways while gold prices moved higher which weighed on the precious metals complex.

Technical Analysis

Silver prices are chopping around but the Fed’s decision will likely be an impetus for a sharp move. Resistance is seen near a downward sloping trend line that comes in near $28.35. Support is seen near the 50-day moving average at 26.96The fast stochastic is chopping around between buying and sell signals which also reflects consolidation. The MACD index generated a crossover sell signal. The MACD (moving average convergence divergence) histogram is printing in negative territory with a declining trajectory which points to lower prices.

Producer Prices Surge

Producer prices rose at their fastest annual clip in nearly 11 years in May. The 6.6% surge in the PPI index was the biggest 12-month rise on record. On a monthly basis, the producer price index rose 0.8%, more than the estimate of 0.5%. Goods inflation continued to be the dominant inflation force, rising 1.5% as opposed to a 0.6% increase in services. Excluding food and energy, PPI rose 5.3%, which also was the biggest increase on record.

Natural Gas Price Prediction – Prices Drop Despite Brewing Storms

Natural gas prices moved lower on Tuesday, reversing Monday gain. Prices dropped 3.5%, ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 78 Bcf build in stockpiles according to survey provider Estimize. The weather is expected to be warmer than normal on the coasts and cooler than normal in the mid-section, for the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Tropical storm bill is headed up the east coast and likely to hit Canada. There is a disturbance in the Gulf of Mexico that has a 40% chance of becoming a tropical cyclone during the next 48-hours according to NOAA. Solid retail sales of electricity should buoy natural gas prices

Technical Analysis

Natural gas pulled back after breaking out on Monday. Target resistance is seen near the October 2020 highs at 3.39. Support is seen near the 10-day moving average at 3.16. Short-term momentum flip-flopped and turned negative as the fast stochastic generated a crossover sell signal in overbought territory. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

 

Electricity Sales Should Rise

The Energy Information Administration forecast that retail sales of electricity in the United States will increase by 2.3% in 2021 after falling by 3.9% in 2020. The largest increase in consumption will occur in the residential sector.

Gold Price Prediction – Prices Fall Ahead of Fed as Retail Sales Slides

Gold prices continued to decline and again bounced near support but settled lower. The dollar moved sideways along with the 10-year Treasury yield ahead of Wednesday’s Federal Reserve decision. U.S. Retail sales were weaker than expected but producer inflation surged. Producer prices rose at their fastest annual clip in nearly 11 years in May. As a result, all eyes will be on the Fed and how they handle the fact that inflation is accelerating.

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Technical analysis

Gold prices moved lower but settled off session lows. Support is seen near an upward sloping trend line that comes in near 1,855.  Short-term resistance is seen near the most recent trend breakdown at 1,872. Additional resistance is seen near the 10-day moving average at 1,885 Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as  the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Sales Unexpectedly Fell

U.S. Retail sales fell 1.3% last month. The April data was revised higher to show sales increasing 0.9% instead of being unchanged. Expectations had been for retail sales to decline by 0.8%. Retail sales surged 28.1% year over year.

Silver Price Prediction – Prices Consolidate Ahead of the Fed

Silver prices moved sideways on Monday but continued to gain traction against gold. The Federal Reserve meets mid-week, and their views on inflation will help provide the next direction for the precious metals complex. Copper prices have also been rangebound, and traders are awaiting Jay Powell’s commentary to determine a future upside to materials.  On Monday, the dollar moved sideways, neutral for silver prices, while U.S. Treasuries moved higher, which generated headwinds. Hedge funds reduced both long and short positions in futures and options according to the most recent commitment of traders report.

Technical Analysis

Silver prices are consolidating building energy and waiting for an impetus from the Federal Reserve. Resistance is seen near a downward sloping trend line that comes in near $28.35. Support is seen near the 50-day moving average at 26.91. Most of the price action is centering around the 10-day moving average as volatility has eased. The fast stochastic is chopping around between buying and sell signals which also reflects consolidation. The MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory reflecting consolidation.

Commitment of Trader’s Analysis

Traders reduced both long and short positions in futures and options ahead of the Fed’s meeting this week. It’s hard to see prices moving higher or lower ahead of the Fed decision. Hedge funds remain long, with the open interest nearly 2.5-times higher for long positions than for short positions.  Hedge funds are betting that prices will move higher, which shows that sentiment is positive. If the Fed does not refer to inflation in their statement and does not provide a timeline for reducing bond purchases, the dollar is likely to tumble and silver prices should rally.

Natural Gas Price Prediction – Prices Rally Breaking Out as Momentum Turns Positive

Natural gas prices continued to break out rising nearly 2% on Monday. Strong LNG demand is helping to buoy prices. Inventories also ended May nearly 3% lower than the 5-year average range. The weather is expected to remain normal except for the west which is expected to experience warmer than normal weather. The tropical season off and running with two storms in the Atlantic and one in the Gulf. The depression off of the East-coast of the U.S. should not impact natural gas structures. The Gulf storm has a 20% chance of becoming a tropical cyclone in the next 48-hours.

Technical Analysis

Natural gas prices broke out and continued to rally on Monday. Target resistance is seen near the October 2020 highs at 3.39. Support is seen near the 10-day moving average at 3.14. Short-term momentum is moving higher as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Inventories Declined in May

The EIA estimates that natural gas inventories ended May 2021 at almost 2.4 trillion cubic feet which is 3% lower than the five-year average. More natural gas was withdrawn from storage during the winter of 2020–21 than the previous five-year average, largely as a result of the colder-than-average February temperatures that contributed to a drop in natural gas production.

Gold Price Prediction – Prices Slide but Settle off the Session Lows

Gold prices continued to decline on Monday but bounced off trend line support and settled off the session lows. The dollar moved sideways after rising on Friday. The 10-year Treasury yield rebounded and closed near the 1.50% level. Both Paul Tudor Jones and Bank of America CEO Brian Monihan were on the tape today, saying the Fed might consider reducing bond purchases as spending is surging and inflation is accelerating.

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Technical analysis

Gold prices moved lower but settled off session lows. Support is seen near an upward sloping trend line that comes in near 1,852.  Short-term resistance is seen near the most recent trend breakdown at 1,872. Additional resistance is seen near the 10-day moving average at 1,889 Short-term momentum continues to whipsaw and turned negaitve as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as  the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a flat trajectory which points to consolidation. American consumers are spending more freely as the economy opens up further, Bank of America CEO Brian Moynihan said Monday.

Spending is Surging

According to Bank of American CEO Moynihan, transaction volumes on credit and debit cards have grown by 20% so far in 2021 year over year. The comparison excludes 2020, an abnormal year in many respects, because the onset of the pandemic led to a decline in spending as the lockdown ensued.

Silver Price Prediction – Large Option Open Interest Should Draw Prices Higher

Silver prices edged lower on Friday, declining by 0.25%, but settled up about 0.45% for the week. The surge in the dollar on Friday generated headwinds for silver and the entire precious metals complex. With yields not impressed with higher inflation levels, lower yields are likely to weigh on the dollar and eventually buoying silver prices. The daily charts show that prices are consolidating between a tight range. Traders await the next commitment of trader’s report, but open interest is still likely to show a significant number of long contracts held in the managed money category. There is large option open interest (which is the number of open option contracts, at the $26 strike options that settle in one week and the $26 and $27 strike that mature in 2-weeks. If the markets can push the price another 4% it should begin to see additional short-covering.

Technical Analysis

The weekly chart shows that prices moved higher and continued a long-term bull flag pattern that is a pause that eventually refreshes higher. Resistance is seen near a downward sloping trend line on the weekly chart at $28.45. Support is seen near the 10-week moving average at 26.92. Short-term momentum is positive as the fast stochastic made a crossover buy signal. The caveat is that the fast stochastic is printing a reading of 83, above the overbought trigger level of 80, which could foreshadow a correction.

Medium-term momentum is also positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. This occurs as the MACD line (the 12-week moving average minus the 26-week moving average) crosses above the MACD signal line (the 9-week moving average of the MACD line. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.