Gold Price Forecast – Gold markets very choppy on Monday

The Gold markets continue to be very choppy overall, and therefore it’s not a huge surprise that we struggled a bit during the trading session on Monday. I think we continue to go back and forth, and it’s likely that we will see quite a bit of noise overall. I do like buying short-term pullbacks, but if we were to break down below the $1185 level, then I think we go looking towards the $1175 level. From a shorter-term perspective, when I look at this market I also recognize that the five dollar levels continue to be important as well. In other words, short-term traders will continue to bounce back and forth between these large figures.

Longer-term, I love gold. I buy gold in its physical form quite often, recognizing that leverage can be difficult to hang onto. Overall, I think that the markets will eventually turn around but we need to see the US dollar fall apart first. The US dollar has been rather strong, and with the strengthening interest rate cycle from the Federal Reserve in a time of low rates around the world, we may be waiting a while before we see the US dollar helps gold. Overall, I think that the market will eventually find its footing, but in the short term you need to think about this market as being one that is traded off the 15 minute chart or something as such. If we were to break down below the $1175 level, I think we will break down to the $1100 level given enough time.

Gold Price Video 02.10.18

Natural Gas Price Prediction – Prices Surge on Cold Weather Forecast

Natural gas prices surged higher on Monday rising 3%, as colder than normal weather is expected to cover most of the Mid-west for the next 2-weeks according to the latest forecast from the National Oceanic Atmospheric Administration. With inventories below the 5-year average range, and well below the 5-year average, prices could spike to the $12-dollar per mmbtu level according to the Citigroup Natural gas Analyst.  There are currently no tropical storms in the Atlantic or Caribbean that could threaten US natural gas installations. Imports of natural gas are also on the rise, more than doubling the US exports from 2017.

Technical Analysis

Natural gas prices moved higher and hit a fresh 8-month high on Monday. Prices also closed at a 7-month high and are poised to test target resistance near the January highs at 3.6.  Support on natural gas prices are seen near the 10-day moving average at 3.01. Momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices. The RSI (relative strength index) also moved higher in tandem with price action which reflects accelerating positive momentum.

Exports of Natural Gas Doubled

The EIA reported that during the period January through June of 2018, net natural gas exports from the United States averaged 0.87 billion cubic feet per day , more than double the average daily net exports during all of 2017. The United States, which became a net natural gas exporter on an annual basis in 2017 for the first time in almost 60 years, has continued to export more natural gas than it imports for five of the first six months in 2018.  With inventories as historically low level and imports on the rise attracting higher prices, natural gas will likely continue to increase as the demand component is likely undervalued.

Natural Gas Price Fundamental Daily Forecast – Short-Covering Driving Market Away from Value Zone at $2.929 to $2.886

Natural gas futures are trading sharply higher early Monday and rapidly approaching last week’s high at $3.111. The price action suggests there may be something cooking in the 8 to 14 day weather outlook that has spooked short-sellers into abandoning their positions established late last week following the release of the lower-than-expected injection into the storage during the week-ending September 21.

At 1207 GMT, November Natural Gas futures are trading $3.070, up 0.062 or +2.09%.

Short-Term Weather Outlook

NatGasWeather.com for Monday, October1, says, “Much of the country east of the Plains will be warmer than normal this week with highs of 80 to lower 90s across the southern U.S., with upper 60s to lower 80s over the Ohio Valley and Mid-Atlantic, including portions of the Northeast. Locally cooler conditions can be found near the Canadian border due to weak cool fronts. The West will cool this week, but still mostly comfortable with highs of 60s and 70s. The Southwest will be wet the next several days as tropical cyclone Ross tracks inland, easing hot conditions. Overall, demand will be light to moderate the next 7 days.

Mid-Term Weather Outlook

For October 1 to October 7, NatGasWeather.com says, “The West will see numerous weather systems bring showers but with mostly mild to only slightly cool conditions. Heavy rains are expected into the Southwest as tropical moisture from Rosa arrives. The southern U.S. will be very warm with highs of 80s to lower 90s. The East will be mild to warm with highs of 60s to lower 80s due to strong high pressure, although with cooler exceptions near the Canadian border as weather systems provide glancing blows. Overall, a mostly comfortable early October pattern with light to moderate demand.”

Forecast

Today’s early price action makes it genuinely tough for traders. In my opinion, it’s a little too early in the season to chase the market higher, especially the one that being driven by the spot market. The moves are generally too fast and short in duration.

Furthermore, chasing a market higher at this time of year leaves you with no out because a pullback below support will be looked at as a buying opportunity just as one who bought strength will be bailing out.

Given the current main range of $2.747 to $3.111, the best buying opportunity remains its retracement zone at $2.929 to $2.886.

We’re comfortable with the notion of a potential bull market this year due to the expected supply shortage. However, we’re not in favor of chasing a news driven rally at this time.

Price of Gold Fundamental Daily Forecast – Professional Traders Increase Net Short Positions

Gold is trading lower shortly after the regular session opening on Monday after failing to follow-through to the upside following Friday’s dramatic rebound into the close. The market continues to feel pressure from a stronger U.S. Dollar which is being supported by expectations of higher U.S. interest rates. Furthermore, increased demand for risk and the lack of follow-through to the upside by silver is also pressuring the precious metal.

At 1232 GMT, December Comex Gold is trading $1191.40, down $4.80 or -0.40%.

Traders are also saying that the Golden Week celebration in China is also weighing on prices. Volume and volatility are down because of the Chinese holiday.

Gold is being pressured by rising U.S. Treasury yields as investors continue to respond to last week’s 25-basis point rate hike by the Fed. Although the move was widely expected, investors were caught off-guard somewhat by the Fed’s strong suggestion that rates would be raised again in December and perhaps as many as three times in 2019 and once in 2020.

The Fed’s removal of the word “accommodative” from its monetary policy statement is also encouraging investors to sell gold because this suggests the central bank may turn more aggressive in its efforts to stem the rise in inflation and reduce its balance sheet.

Demand for higher-yielding assets is on the upswing following the announcement that the United States and Canada had reached a trade deal on Sunday, thereby salvaging NAFTA and creating a trilateral agreement with Mexico. U.S. equity markets are up on the news as money flows back out of gold and into stocks.

In other news, gold speculators raised their net short position by 2,923 contracts to 77,313 contracts, the largest in three week, in the week to September 25, U.S. Commodity Futures Trading Commission (CFTC) data showed.

Forecast

Although the market may be subject to a few short-covering rally upswings, the fundamentals are bearish so the general direction of the gold market is expected to be down. Traders are being to look at $1200.00 as an important upside barrier and the August bottom at $1167.10 as the minimum downside target.

Later today, investors will get the opportunity to react to a slew of U.S. economic data including Final Manufacturing PMI, Construction Spending and Total Vehicle Sales. The major report is the ISM Manufacturing PMI. It is expected to come in at 60.1, slightly below the previously reported 61.3.

Federal Open Market Committee Member Bostic is also scheduled to speak. Recently, Raphael Bostic of the Atlanta Fed expressed worries about the potential for an inverted yield curve – short term rates higher than long-term rates – which could be a signal for an upcoming downturn as the inversion has preceded recessions in recent history.

Oil Price Fundamental Daily Forecast – Speculative Buyers Continue to Bet on Supply Shortage

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading slightly higher early Monday as speculators continue to bet that the U.S. sanctions against Iran, which are expected to begin next month, will lead to a supply shortage.

Leading the rally is the Brent crude oil because it will be directly impacted by the sanctions which kick in November 4. WTI futures are being supported by Friday’s rig count report, which showed a drop last week and stagnant growth for the quarter. Furthermore, it points to a slowdown in U.S. crude production.

In other news, hedge funds increased their bullish wagers on U.S. crude in the week to September 25, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday, increasing futures and options positions in New York and London by 3,728 contracts to 346,566 during the period.

There was also a report that China’s Sinopec said its halving loadings of Iranian crude oil this month. China is the biggest buyer of Iranian oil.

Additionally, U.S. President Trump called Saudi Arabia’s King Salman on Saturday, discussing ways to maintain sufficient supply once Iran’s exports are hit by sanctions.

At 0707 GMT, November WTI crude oil is trading $73.37, up $0.12 or +0.16% and December Brent crude oil is at $82.98, up $0.25 or +0.31%.

Forecast

The news is so bullish that ANZ bank is saying that “the market is eyeing oil prices at $100 per barrel”. They should’ve said bullish speculators because this is who has to buy with both hands in order drive Brent to this level.

Sure it’s possible especially because we still don’t know about compliance with the Trump administration’s order of zero exports from Iran. For example, if Chinese refiners do comply with U.S. sanctions more fully than expected, and India and Japan, then the market balance is likely to tighten even more aggressively.

Furthermore, I’m sure the Saudis would like to appease Trump, but where does he think they’ll get the oil? With November 4 coming up quickly and the market getting ready to lose about 1.5 million barrels per day, traders are going to find out rather quickly how much oil the Saudi’s can produce above their recent 10.5 million bpd output.

If you’re looking at only the supply side then $100 Brent is possible, however, there are also demand issues. Asia’s emerging markets could slowdown oil purchases if the dollar continues to rise. Inflationary pressures could also stunt demand growth.

Reports over the week-end point toward economic slowdown in China and Japan, blamed mostly on trade issues. Growth in China’s manufacturing sectors is already showing weakness. Business confidence in Japan is also falling.

Look for strength in the crude oil markets over the near-term, but it’s a little early to chase the market higher, no matter how aggressive the speculators get. Look for value on pullbacks.

Crude Oil Price Update – Starts Today’s Session in Window of Time for Closing Price Reversal Top

November West Texas Intermediate crude oil futures settled higher on Friday, recovering from three days of sideways action. The rally is being driven higher by increasing momentum. Speculators and professional traders are increasing bets that the sanctions on Iran will cause a supply shortage. Although Russia and Saudi Arabia are planning to provide some support through increased production, the 1.4 million barrels per day is not expected to be enough to replace the 2.1 million barrels per day that Iran was expected to provide.

WTI Crude Oil
Daily November WTI Crude Oil

Daily Swing Chart Technical Analysis

The current chart pattern isn’t very complicated because we’re not dealing with resistance at this time, only support. Furthermore, the more is being driven by momentum.

The main trend is up according to the daily swing chart. The main trend will change to down on a trade through $67.79.

The minor trend is also up. A move through $71.47 will change the minor trend to down. This will also signal a shift in momentum to the downside.

Today’s session is 10 days up from the last main bottom. This puts the market in the window of time for a potentially bearish closing price reversal top.

Daily Swing Chart Technical Forecast

Since momentum is driving the price action, the direction of the November WTI crude oil futures contract on Monday is likely to be determined by trader reaction to Friday’s high at $73.73. Three things can happen today.

First, the buying can be strong enough to take out $73.73 and continue the rally. Secondly, the buying may be weak and the selling strong enough to prevent the market from breaking out over $73.73. Thirdly, buyers could take out $73.73 then the market could turn lower for the session. This would set up a possible closing price reversal top. Although this chart pattern does not indicate a change in trend is taking place, it will be a sign that the selling is greater than the buying at current price levels.

If formed and confirmed, this chart pattern could lead to a 2 to 3 day correction.

Gold Price Futures (GC) Technical Analysis – Needs to Clear Wall of Resistance at $1200.00 to $1205.90 to Sustain Short-Covering Rally

December Comex Gold futures closed higher on Friday, reversing earlier weakness which drove the market to nearly a 6-week low. Short-covering and profit-taking helped drive prices higher, but the catalyst behind the move was a strong rally in silver. Despite expectations of rising interest rates and a firmer U.S. Dollar, which are keeping a lid on prices, gold traders may start paying more attention to the price action in silver. So keep that in mind this week.

Comex Gold
Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, Friday’s closing price reversal bottom may be an early sign that momentum may be getting ready to shift to the upside. A trade through $1198.00 will confirm the reversal bottom. If buyers come in on the confirmation then look for a possible 2 to 3 day counter-trend rally.

The main trend changes to up on a trade through $1215.80. A move through $1184.30 will negate the closing price reversal bottom and signal a resumption of the downtrend with $1167.10 the next major target.

The main range is $1167.10 to $1220.70. Its retracement zone at $1193.90 to $1187.50 is a key area to watch. Based on Friday’s close, it begins today’s session as support.

The short-term range is $1215.80 to $1184.30. Its retracement zone at $1200.00 to $1203.70 is the first upside target. The second target is a longer-term retracement zone at $1205.90 to $1215.10.

Daily Swing Chart Technical Forecast

Based on Friday’s close at $1196.20 and the price action, the direction of the December Comex Gold futures contract on Monday is likely to be determined by trader reaction to the 50% level at $1193.90.

A sustained move over $1193.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a labored rally with potential targets coming in at $1200.00, $1203.70 and $1205.90.

The rally will pick up strength over $1205.90 with $1215.10 the next likely target.

A sustained move under $1193.90 will signal the presence of sellers. This could lead to an extension of the selling into $1187.50. If this price fails then look for a test of $1184.30. This price is a potential trigger point for an acceleration to the downside with $1167.10 the next major target.

 

Natural Gas Price Fundamental Weekly Forecast – Suppressed Demand Likely to Keep Lid on Prices

Early in the week, natural gas traders were content with pushing prices lower in accordance with normal seasonal pressure. This plan was working until the release of the bullish weekly government storage report on Thursday.

Also weighing on prices early in the week was a change in the weather forecast for the first week of October. Prices were driven higher the previous week on the notion that below average temperatures would drive up demand. However, prices retreated when the forecast changed to more seasonal temperatures.

With the government report out of the way, traders are likely to revert back to the weather reports at the start of the new week for guidance.

For the week, November Natural Gas futures settled at $3.008, up $0.034 or +1.14%.

Weekly Government Data

Natural gas futures soared on Thursday following the release of a bullish storage report by the U.S. Energy Information Administration (EIA). For the first time this week, investors set aside concerns over the weather when the surprise government data was released. The response by traders may have been a snapshot of what is to follow this winter when the heating season begins with a supply deficit.

On Thursday, the EIA announced a 41 Bcf injection for the week-ended September 21. This was much lower than the 61 Bcf injection forecast for the week by a consensus of analysts. The figure was also well below the five-year average of 81 Bcf.

The figure was also the lowest injection over the past five weeks and wiped out all of the bearish momentum created by a series of September injections.

Current national gas stocks sit at 2.768 Tcf, down 18.3% from the five-year average of 3.389 Tcf for the same time period, according to EIA data.

Forecast

Last week’s spike in prices may have been a one-and-done event. This week investors are going to key in on the weather until Thursday’s EIA data is released. The weather will determine if the storage deficit widens or tightens.

According to NatGasWeather.com for the period up to and including October 4, “High pressure will dominate the West and Southeast with highs of 80s and 90s, although becoming wet over the Southwest from tropical moisture. A cool front extends from the east-central U.S. to the South with heavy showers. A stronger cool front will push across the Midwest the next few days with lows of 30s and 40s, locally 20s. Much of the U.S. will return above normal this week with highs of 80s to lower 90s over the southern U.S. and 60s to lower 80s across the northern U.S. Cooler exceptions will be near the Canadian border. Overall, demand will be moderate, then low this week.”

Additionally, the National Weather Service calls for a likelihood of temperatures below seasonal norms in the North and the West, while higher-than-average temperatures are expected across the rest of the U.S. over the next six to 10 days.

In order to sustain the rally at this time of year, demand is going to have to outstrip production which is at a record high. This could be difficult because much of the recent demand has been driven by volatility in temperatures offsetting movements in heating and cooling demand.

While we may not see a return to Thursday’s high at $3.111 for several weeks, the natural gas market should continue to be underpinned by the supply/demand fundamentals. Given the bullish outlook for prices the rest of the year, I feel there is no need to chase prices higher. The opportunities to get long the market will come on periodic pullbacks in the market. Currently, the best support or value zone is $2.929 to $2.886.

Price of Gold Fundamental Weekly Forecast – Fundamentals Bearish, but Strong Silver Could Lead to Counter-Trend Rally

Gold futures finished lower last week as a stronger U.S. Dollar helped make the dollar-denominated asset a less-attractive investment. Several factors helped pressure gold and boost the dollar including expectations of higher interest rates, strong U.S. economic data and a weaker Euro.

Gold hit a fresh six-week low late in the week, but a strong performance in silver, coupled with profit-taking in the U.S. Dollar ahead of the week-end, helped the market recover nearly half of the week’s loss.

For the week, December Comex Gold futures settled at $1196.20, down $5.10 or -0.42%.

U.S. Federal Reserve’s Influence

Last week, the Fed played a role in driving the dollar higher and gold lower. The Fed raised its benchmark interest rate by 25 basis points to a range of 2%-2.25% last week. This move was widely expected and fully-priced into the gold market for weeks. However, Fed policymakers also strongly hinted that the central bank would raise rates again in December, three times in 2019 and once more in 2020. This news pressure gold.

Fed Chair Jerome Powell also said the economy is strong enough that aggressive stimulus is no longer necessary. This confidence was shown by the Fed ending its description of its policy as “accommodative”.

Powell also said the rate hike reflected the Fed’s confidence in the U.S. economy, describing it as a “particularly bright moment”. Powell also warned that a permanent shift to a “more protectionist world” would hurt the U.S. and global economies, but added that for now, he expects the overall economic impact to remain relatively modest. “We don’t see it in the numbers,” he said at a press conference in Washington after the meeting.

Fed officials now expect the U.S. economy to grow by 3.1% this year, faster than the 2.8% forecast in March, according to the projections released after the meeting. Their predictions for inflation remained unchanged at around 2%.

U.S. Economic Data

Final US. GDP rose 4.2% during the second quarter. Core Durable Goods Orders came in at 0.1%. Durable Goods Orders rose 4.5%. The Core PCE Price Index was flat, but Personal Spending rose 0.3%. The Conference Board’s Consumer Confidence hit an 18-year high at 138.4. University of Michigan’s Consumer Sentiment, however, came in slightly below expectations at 100.1.

Weak Euro equals Weak Gold

Helping the U.S. Dollar climb to a two-week high against a basket of currencies was a weaker Euro. Concerns about the Italian budget weighed on the single currency. The EUR/USD fell below $1.16 for the first time in two weeks after Italy’s government agreed on a budget seen by some investors as defying Brussels. Political wrangling over the budget in heavily indebted Italy put a lid on the Euro’s recent rally.

Forecast

Although the direction of gold prices will be primarily influenced by the U.S. Dollar. Traders should also pay attention to the price action in the silver market.

Silver futures surged to their highest level since August 30 on Friday. Its divergence from gold is making the metal an attractive asset. Gold, for example, hit its lowest level since August 17, while buyers were moving silver sharply higher. At this time, gold is being led higher by silver, which means the “tail is wagging the dog.”

Silver is being supported because it is relatively cheap. Additionally, it could be attracting buyers due to inflationary expectations and industrial demand during the current economic expansion. As of Friday’s close, the gold-silver ratio is about 85:1. This makes it a more attractive asset relative to gold. This may be just enough to bring in the buyers. Now that the news is out there, look for heightened volatility.

Economic news that could influence the U.S. Dollar and gold prices next week are U.S. ISM Manufacturing PMI, ISM Non-Manufacturing PMI, and the Balance of Trade.

Additionally, investors will get the opportunity to react to the September Non-Farm Payrolls report. The headline number is expected to show the economy added 185K jobs last month. Average Hourly Earnings are expected to have risen 0.3% and the Unemployment Rate is expected to dip to 3.8%.

The dollar will continue to be influenced by Treasury yields and worries over Italy. We’re going to approach the market early in the week as if a stronger dollar will make gold weak. However, we’ll quickly shift to an upside bias if another rally in silver takes control of the gold market and drags prices higher.

Oil Price Fundamental Weekly Forecast – Anticipated Shortfall Expected to Continue to Drive Prices Higher

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished higher last week with the latter outperforming by nearly two-percent. All week, the markets were underpinned by worries about a supply shortage. Traders were mostly concerned about the impact of the Iranian sanctions on global supply and whether Saudi Arabia and Russia can produce enough crude oil to offset the expected shortfall.

For the week, November WTI crude oil futures settled at $73.25, up $2.47 or +3.49% and December Brent crude oil closed at $82.73, up $4.49 or +5.43%.

Key Issue

Shortly after the U.S. announced the sanctions on Iran, the market estimated a reduction of between 500,000 and 2 million barrels per day of crude oil. A little after that, Saudi Arabia and Russia announced they would increase output by about 1.4 million barrels per day. This is currently where we stand with speculative buyers being driven by the notion that the increased production will fall short of the lost output.

At its meeting in Algeria last week-end, OPEC and its allies discussed increasing production by another 500,000 barrels per day, but this idea was rejected because Saudi Arabia is worried it might need to limit output next year to balance global supply and demand as the United States pumps more crude.

Factors That Could Limit Gains

Although the price action last week was primarily to the upside, some news did limit the rally. According to the U.S. Energy Information Administration, domestic crude supplies rose by 1.9 million barrels for the week-ended September 21. The EIA had reported declines in each of the previous five weeks. Traders were looking for a draw of about 2.2 million barrels.

Gasoline stockpiles rose 1.5 million barrels for the week, while distillate stockpiles fell by 2.2 million barrels, according to the EIA. Traders expected an increase of 256,200 in gasoline and 667,000 barrels in distillates.

The rally in WTI crude was also slowed by comments from the White House. President Trump reiterated calls on OPEC to pump more oil and stop raising prices. Additionally, Washington’s special envoy for Iran, Brian Hook, told a news conference at the United Nations General Assembly, “We will ensure prior to the reimposition of our sanctions that we have a well-supplied oil market.

Forecast

At its peak in May, Iran exported 2.71 million bpd, nearly 3 percent of daily global crude consumption. If this is taken off the market and the Saudi’s and Russian produce 1.4 million bpd as forecast then there will be a shortfall. ANZ said in a note on Friday that major suppliers were unlikely to offset losses due to the sanctions estimated at 1.5 bpd.

This is the narrative that is expected to continue to drive prices higher this week.

Additionally, drillers cut three oil rigs in the week to September 28, General Electric’s Baker Hughes energy services said on Friday. Furthermore, new drilling has stalled in the third quarter with the fewest additions in a quarter since 2017 due to pipeline constraints in the nation’s largest oilfield.

The news at the start of the week is bullish and prices are expected to continue to rise. This is, of course, unless Washington’s special envoy for Iran, Brian Hook, finds the oil he needs to keep the market well-supplied.

Gold Price Futures (GC) Technical Analysis – Closed on Bullish Side of Long-Term Downtrending Gann Angle

Gold futures spiked to nearly a six-week low last week, but the market was able to recover most of the loss on Friday. The market was pressured by a strong U.S. Dollar which made dollar-denominated gold a less attractive investment. The catalyst behind the strength in the dollar was another quarter-point rate hike by the Fed and expectations of another rate hike in December, and perhaps as many as three more in 2019. Strong U.S. economic data also pressured gold prices, led by 4.2% Gross Domestic Product growth.

For the week, December Comex Gold settled at $1196.20, down $5.10 or -0.42%.

Comex Gold
Weekly December Comex Gold

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $1167.10 will signal a resumption of the downtrend. The market is in no position to change the main trend to up.

The market has been trading inside the $1167.10 to $1221.40 range for six weeks. This is a breakout range. The trend won’t change to up on a move through $1221.40, but we could see a strong rally due to aggressive short-covering.

The short-term range is $1167.10 to $1221.40. Its 50% level or pivot is $1194.30. This price is controlling the near-term direction of the market.

On the upside, the first major resistance is a retracement zone at $1250.00 to $1277.20.

Weekly Technical Forecast

Based on last week’s close at $1196.20, the direction of the December Comex Gold futures contract this week is likely to be determined by trader reaction to the pivot at $1194.30. The close was also on the bullish side of a long-term downtrending Gann angle at $1188.10. This is important because this angle has been guiding the market lower for 24 weeks, or since the $1388.10 main top the week-ending April 13.

Bullish Scenario

A sustained move over $1194.30 will indicate the presence of buyers. The first upside target is a longer-term uptrending Gann angle at $1209.20.

Overtaking $1209.20 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into $1221.40. Taking out this level with conviction could trigger a rally into $1250.00, followed by $1277.20.

Bearish Scenario

A sustained move under $1209.20 will signal the presence of sellers. Crossing to the weak side of the downtrending Gann angle at $1188.10 will indicate the selling is getting stronger. This could trigger a further break into another long-term uptrending Gann angle at $1185.60.

The daily chart opens up to the downside under $1185.60 with targets coming in at $1167.10 and $1162.00.

Crude Oil Price Update – Has Room to Stretch to $75.60, but Needs to Hold $70.86 for Longer-Term Bullish Trend

U.S. West Texas Intermediate crude oil futures settled sharply higher last week, continuing the breakout to the upside on long-term charts, which began the week before. Fundamentally, investors are concerned about a potential supply shortage.

With sanctions against Iran set to begin on November 4, the global supply is about to take a hit and traders aren’t sure that extra production promised by Saudi Arabia and Russia will be enough to fill in the supply gap.

For the week, November WTI crude oil closed at $73.25, up $2.47 or +3.49%.

WTI Crude Oil
Weekly November WTI Crude Oil

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. The next major top is $81.34. Due to the prolonged move in terms of price and time, the market remains vulnerable to a closing price reversal top. However, this won’t be enough to change the main trend to down. If it does occur, it will be designed to alleviate some of the upside pressure. The trend will change to down on a move through $62.48, or over $10.00 away.

The first major support is the long-term Fibonacci level at $70.86. The second major support is the long-term 50% level at $65.15. Holding above $70.86 will help sustained the strong upside bias.

Weekly Technical Forecast

Based on the recent price action, the direction of the November WTI crude oil futures contract for the week is likely to be determined by trader reaction to the Fibonacci level at $70.86.

Bullish Scenario

A sustained move over $70.86 will indicate the presence of buyers. Taking out last week’s high at $73.73 and sustaining the rally will indicate the buying is getting stronger. If this generates enough upside momentum then look for the rally to possibly extend into a long-term downtrending Gann angle at $75.60.

We could see sellers show up on the first test of $75.60. This will likely be profit-takers. However, overtaking the angle could trigger an acceleration to the upside since the weekly chart indicates there is plenty of room to the upside with $81.34 the next major upside target.

Bearish Scenario

Taking out last week’s high at $73.73 then breaking back under last week’s close at $73.25 will be the first sign of sellers. This move will indicate the selling is greater than the buying at current price levels, but won’t necessarily indicate the trend is getting ready to turn down. It will also signal a shift in momentum.

A break back under the Fibonacci level at $70.86 will indicate some serious selling is taking place. This could lead to a break into an uptrending Gann angle at $70.69. This is only a minor angle, but nonetheless, a test of it could bring in new buyers. However, if it fails then look out to the downside.

Silver Weekly Price Forecast – Silver markets continue to find support

The Silver markets have rallied during the week, showing signs of strength, and we are closing towards the top of the range for the week which of course is a very bullish sign. We have broken above an inverted hammer from a couple of weeks ago, which is a bullish sign, and now we have $15 in our targets. I think that if we can break above that level, it’s likely that we will then go to the $15.50 level, and then eventually the $16 level. Overall, this is a historically cheap levels that we have seen a lot of buying at, and I think that will continue to be looked at as a value buying opportunity. I recognize that we will probably have the occasional pullback, but at this point silver has become cheap enough that larger money is starting to come in and pick it up.

I believe that the easiest way to deal with the turnaround is to buy silver in its physical form as it allows you to ride out the volatility. CFD markets allow granular position sizing, and that of course helps as well. Remember, the futures market is $25 a tick, which is only one half of a cent. Because of that, it can be very difficult to hang onto for the longer-term trade. However, if you have the correct account size, this could be an excellent buying opportunity. If we break down below the $14 level, that would be very negative indeed.

SILVER Video 01.10.18

Crude Oil Weekly Price Forecast – crude oil markets break out

WTI Crude Oil

The WTI Crude Oil market has broken above the $71 level during the week, showing signs of strength. We gapped higher at the beginning of the week on Monday, and simply went sideways with an upward proclivity, showing even more bullish pressure on Friday as we made even higher highs. I think that short-term pullbacks are opportunities to go long, and I have no interest in shorting this market. It looks likely that we will now go looking towards the $75 level, as we have firmly ensconced ourselves into a nice uptrend.

Brent

Brent markets or even more bullish than the WTI Crude Oil market as we have sliced through the $80 level. Not only did we slice through that crucial round number, but we have broken above the tops of three consecutive shooting stars, which of course is an extraordinarily bullish sign. I believe that the $85 level above will be a target, just as the $80 level underneath will be massive support now. I’d be looking for pullbacks to get involved to the long side, but with the bullish candle that we have formed for this past week there can be very little doubt as to what the attitude of the market is and where people are looking for it to go, which of course is simply higher.

If we did break down below the $80 level, that would be extraordinarily negative, but even then I think there’s plenty of support at the $75 level underneath.

WTI Video 01.10.18

Natural Gas Weekly Price Forecast – market flashes a very bearish signal

Natural gas markets initially shot higher during the week, and even reached as high as the $3.10 region before turning around. Friday was negative, and as a result we ended up forming a bit of a shooting star. After the absolutely astonishing run during the previous week, it makes sense that we would be a little bit exhausted. However, if we can break down below the $2.95 level, then it’s likely that we go back to the bottom of the overall consolidation range that I have clearly marked on this chart. I think that could send this down to the $2.75 level over time, but I would not expect a huge red candle like we got in the opposite direction recently. At this point, I do realize that we are starting to get close to the relatively bullish time of year, but I would also point out that we never got that massive breakout last year.

This market is very sensitive to short-term weather conditions, so that of course will cause some issues, but as I stated in the preamble, “price doesn’t lie.” This candlestick is extraordinarily bearish, and I suspect that if we break down we just simply returned to the bottom. Ultimately though, if we break above the top of the shooting star that is a very bullish sign and could send this market as high as $3.20, followed by $3.40 after that. I believe that this weekly candle stick could be crucial that is going to be formed over the next five sessions.

NATGAS Video 01.10.18

Gold Weekly Price Forecast – Gold markets bounced in the week

Gold markets initially fell during the week but by the time we got towards the end of the week, buyers came in and started to push this market back towards the $1200 level. We have a couple of shooting stars just before, and that of course is very bearish. This tells me that a break above the $1215 level, essentially both shooting stars, would be an extraordinarily bullish sign. At that point, the market should then go to the $1250 level. The alternate scenario of course would be a break down below the recent lows.

At this point, the market looks likely to go back and forth and chop around. It will be difficult for longer-term traders, but if we can get above the $1215 level, I think longer-term buyers will come in and push this market much higher. It won’t necessarily be the easiest trade to take, and it of course will be influenced by the US dollar overall so you should pay attention to it. This is a market that has been beaten down rather significantly, so it’s obvious to me that a bit of value hunting makes quite a bit of sense. However, if we break down below the recent low, I think we could drop down to the $1150 level, and then possibly even the $1000 level. That would probably be accompanied by some type of flight to safety in the form of US treasuries or the US dollar, and probably due to some type of news catalyst.

Gold Outlook Video 01.10.18

Silver Price Forecast – Silver skyrockets for Friday session

Silver markets gapped lower to kick off the day on Friday, but then turned around to explode to the upside as silver buyers came in on value. We are now above the $14.50 level, which of course is a major hurdle, and now it looks likely that we are going to run towards the $15 level above. That’s an area that has a certain amount psychological importance, so I would expect a short-term pullback from there. However, looking at the weekly chart I think there’s a real chance that we continue to go above there. I believe that it’s only a matter of time before buyers will pick up these dips based upon value, now that we have seen this massive surgeon volume and movement.

At this point, if we break above the $15 level and if we can stay there, adding to a long position might be the way that a lot of larger players continue to go forward. I would be a buyer of dips and think that it’s only a matter of time before we enter a nice long uptrend. At this point, the $14 level looks as if it has held yet again, and that the longer-term “smart money” has seen this area as important. That doesn’t mean that it’s good to be an easy ride higher, but it certainly looks likely that there will be continued interest in picking up silver, as the fear of missing out certainly is starting to grip the market. Silver is always volatile, so don’t be surprised when we pulled back sharply.

SILVER Video 01.10.18

Crude Oil Price Forecast – crude oil markets explode to the upside

WTI Crude Oil

The WTI Crude Oil market rallied significantly during the day on Friday, taking off to the upside as the Americans came on board. Looking at this chart, it now looks as if the $72 level is massive support, and of course the $71 level is as it was the scene of a massive gap higher. In general, I believe that the market will probably go looking towards the $75 level, an area that makes a lot of sense from a psychological standpoint. Beyond that, if you go back far enough you can see that it is an area that has attracted a lot of momentum.

Brent

Brent markets took off to the upside as well, reaching towards the $83 level. We have seen the market break above the $82 level, which of course is a bullish sign as it had been the top of the consolidation range for the week. Friday certainly put an exclamation point on the bullishness, as we have attacked the $83 level. I think that short-term pullbacks should be a nice buying opportunity, and therefore I think that value hunters will come back into the marketplace. If the US dollar gets hammered, and it was selling off on Friday, that should help crude oil as well. Don’t forget, the Iranian sanctions go into effect in a few weeks, and that will tighten a lot of global supply, of course driving up the price of the underlying commodity. Expect volatility, but certainly with an upward slant.

Crude Oil Inventories Video 01.10.18

Natural Gas Price Forecast – Natural Gas falls to close out the week

Natural gas markets fell during the day on Friday, drifting down below the $3.00 level. The important $2.95 level underneath continues to offer potential support, but I think that if we break down below that level, it could change a lot as far as the outlook is concerned. This is because the weekly candle is now a massive shooting star, which of course is a very bearish sign. That could lead to a reclamation of the consolidation area, meaning that we could go as low as $2.70 underneath. That being said, keep in mind that we are starting to head towards colder months in the United States so there could be the seasonality effect of higher pricing coming. However, we may have gotten ahead of ourselves and therefore may need to make one more round trip in the consolidation zone.

The alternate scenario of course is that we turn around and rally towards the $3.05 level. Overall, I think we are looking at either consolidation in this small range or return to the $2.70 level. If we break down below the $2.95 level, that’s a clear signal for me. It certainly looks as if we are going to try it, and today could be a crucial day when it comes to what happens in the natural gas markets going forward. We know that natural gas does sell off rather rapidly, as it is a little bit more thinly traded than other markets such as crude oil or gold. Momentum could be on your side, if we get that break down. Otherwise, expect back and forth trading.

NATGAS Video 01.10.18

Gold Price Forecast – Gold markets rally on Friday

Gold markets rallied significantly during the trading session on Friday, gaining over seven dollars by the time I recorded this. The market reached towards the $1195 level, which is the beginning of the “$1200 zone.” I think the $1200 area is going to continue to be important, so I would expect a significant amount of resistance and that region. It’s interesting to look at the shooting stars on the weekly chart just above, as it shows significant resistance but this week is turning out to be extraordinarily bullish. Further making this a bit confusing is the fact that silver has exploded to the upside as well, and looks much more bullish than gold, something that there isn’t typically much difference between.

I think that the $1185 level continues to be supportive, and we are at historically supported levels, so I think it’s possible that buying on the dips could continue to work, but I think we have a significant fight ahead of us at the $1200 region. The market has a lot of noise between there and $1215 level, so ultimately it’s a scenario where we will get a lot of back and forth short-term action, and I would pay attention to the US dollar overall, as it will certainly have a lot to do with where gold goes.

Looking at this chart, I recognize that we are still basically in a downtrend, but it certainly looks as if we are trying to find our way back up. I would not be selling this market, at least not quite yet. Again, pay attention to the dollar it will lead the way.

Gold Analysis Video 01.10.18