Gold Price Futures (GC) Technical Analysis – Straddling Key Pivot at $1194.30 for Five Weeks

Gold futures settled slightly higher last week but well off its highs. The market also posted an inside move, which tends to indicate investor indecision and impending volatility. Controlling the price action was the easing of tensions over the trade dispute between the U.S. and China, increased demand for risky assets and expectations of another rate hike by the U.S. Federal Reserve.

For the week, December Comex Gold settled at $1201.30, up $0.20 or +0.02%.

Comex Gold
Weekly December Comex Gold

Weekly Swing Chart Technical Analysis

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

The minor trend is also down. The minor trend will change to up on a trade through $1278.20. This will also signal a shift in momentum.

Gold has been trading inside the range formed the week-ending August 17 for 5 weeks. The top end of the range is $1221.40. The bottom of the range is $1167.10. Given the prolonged sideways price action, traders should look for a volatile breakout over $1221.40, or a volatile breakdown under $1167.10. A breakout to the upside will not signal a change in trend.

The short-term range is $1167.10 to $1221.40. Its 50% level or pivot is $1194.30. This zone is essentially controlling the near-term direction of the market. It has been acting like support for 5 weeks.

The intermediate range is $1278.20 to $1167.10. Its 50% level at $1222.70 is the first upside target. It has been acting like resistance. However, it is also the trigger point for a potential breakout to the upside.

Another intermediate range is $1325.40 to $1167.10. It 50% level or pivot at $1246.30 is the next upside target.

The main range is $1388.10 to $1167.10. Its retracement zone at $1277.60 to $1303.70 is the primary upside target.

Weekly Swing Chart Technical Forecast

Based on Friday’s close at $1201.30 and the recent price action, the direction of the December Comex Gold futures contract is likely to be determined by trader reaction to the short-term pivot at $1194.30.

A sustained move over $1194.30 will indicate the presence of buyers. The first upside targets are $1221.40 and $1222.70. Look for an acceleration to the upside if $1222.70 is taken out with conviction. This move could create the upside momentum needed to challenge the next target level at $1246.30.

A sustained move under $1194.30 will signal the presence of sellers. The daily chart is wide open under this level with the next two targets $1167.10 and $1162.00. The latter is also the trigger point for an acceleration to the downside.

Natural Gas Price Fundamental Weekly Forecast – Rangebound Unless Colder Weather Arrives Earlier Than Expected

Natural gas futures finished sharply higher last week, helped by strong physical prices, signs of early heating demand and below-average stockpiles. A short squeeze in Appalachia due to seasonal maintenance also helped prices surge.

Helping to limit gains was a report that showed overnight Global Forecast data (GFS) “wasn’t quite as cold” for a series of weather systems expected to arrive into the northern United States late this month into the first few days of October, according to NatGasWeather.com.

For the week, November Natural Gas futures settled at $2.974, up $0.233 or +8.11%.

In other news, U.S. natural gas in storage increased by 86 Bcf to 2.722 Tcf for the week-ended September 14, U.S. Energy Information Administration data showed Thursday. The build was slightly more than the estimate calling for an 83-Bcf addition.

The injection was just below the 87-Bcf build reported during the corresponding week in 2017 but more than the five-year average addition of 76 Bcf, according to EIA data. It was only the second time in the last month the injection was more than average.

As a result, stocks were 672, or 20%, less than the year-ago level or 3.394 Tcf and 586 Bcf, or 18%, less than the five-year average of 3.308 Tcf.

At 2.722 Tcf, total working gas is below the five-year historical range and sits 196 Bcf lower than the five-year minimum.

Forecast

With the start of fall last week, weather will once again become a key issue driving the price action. NatGasWeather says over the short-run, the current weather pattern was “still notably colder than normal with strong early season demand for heating.”

“Recent weather data has been milder/warmer October 4-8 as high pressure returns across much of the country with national demand easing back to light levels.

If this pattern held over the week-end then prices should remain south of the psychological $3.000 level. However if “stronger demand trends over the weekend,” it, “could give reason to take $3.000 out on the Sunday/Monday open,” NatGasWeather.com said.

Additionally, this week’s EIA storage report could prove “quite important since it will come in under the five-year average” and potentially push the year-on-five-year average deficit back above 600 Bcf, a deficit “likely to only marginally improve in the following weeks, if at all.”

Looking ahead to Thursday’s storage report, traders are looking for a 63.4 Bcf injection for the week-ending September 21, which would come in below the five-year average 81 Bcf build and close to the 64 Bcf build recorded a year ago.

Looking even further into the future, “over the past five years, storage levels have peaked on the week-ending November 9 at 3.8 Tcf. That would allow for eight more injections before the flip to net withdrawals begin. An early forecast for at least the next three weeks show no significant reduction in the deficit,” according to S&P Global Platts Analytics.

“Storage is now expected to peak at 3.26 Tcf before the switch to withdrawals in early November,” according to the latest forecast by Platts. “If so, it would be the lowest level to start the heating season since 2003, when stocks peaked at 3.18 Tcf.” However, high gas production may hold prices in a range until the heating season actually starts.

What this means is that we’ve likely seen the low, but we’re not likely to breakout over $3.000 unless the cold weather comes earlier than anticipated.

Brent and WTI: Where Differences Lie

We have gathered the most important information about Brent and WTI you need to know to make a profit on them.

Let’s start with the basics. There are plenty of oil grades and varieties in the world. However, just three oil marks became oil benchmarks. They are Brent, WTI, and Dubai Crude. We will talk about Brent and WTI. They are the most frequently used as they are ideal for refining into gasoline.

Why were these benchmarks created?

It happened at the end of the 1980s when the OPEC (the organization of the world’s largest oil exporters) refused to regulate prices making them dependent on traders’ sentiment. To set an appropriate price, exporters needed an orienting point. Brent and WTI were created for that purpose. So, nowadays, each oil producer sets a price for oil as its production depends on how much it corresponds to the benchmark.

If you think that Brent or WTI means just one of the oil grades, you are wrong! They are a common name for different grades that have common characteristics.

Let’s take a closer look at these characteristics

  • The first one is a location.

Brent is a standard for European and Asian markets. This benchmark consists of more than 15 oil grades produced on the Norwegian and Scottish shelf blocks of Brent, Ekofisk, Oseberg, and Forties.

WTI is a mark for the Western Hemisphere. It is sourced from US oil fields, primarily in Texas, Louisiana, and North Dakota.

  • The second characteristic is a chemical formula.

Firstly, it’s worth saying that there are no absolutely similar oil grades. Even grades that are included in Brent or WTI have a different structure.

Brent is the low-sulfur oil of a light type. WTI is a denser oil grade. The quality of WTI is higher than Brent’s one.

Why do Brent and WTI have different prices?

Since the middle of 80s WTI and Brent had traded at almost the same price. There were times when WTI was more expensive than Brent. However, currently, WTI has a lower price than Brent.

Mostly, prices depend on a cost of production and delivery.

Brent is produced near the sea, so transportation costs are significantly lower. Conversely, WTI is produced in landlocked areas. As a result, there are infrastructure problems that make it harder to bring surging North American production to the market and as a result, transportation costs become bigger.

Another important factor to take into consideration is geopolitical trouble. Middle East tensions weigh oil the most, especially Brent. Tensions lead to a decline in supply. You should remember that when the supply of any asset declines, prices go up. West Texas Intermediate is less affected because it is based in landlocked areas in the United States.

A price of WTI is formed by crude oil inventories. As soon as the number increases, WTI goes down. If the number of inventories declines, WTI rises. Here you should remember about a supply issue again.

So as you can see, the major benchmarks are affected by different factors. However, their trends are mostly similar. If Brent goes up, the WTI will go up as well with a high probability.

Making a conclusion, we can say that Brent and WTI will remain reliable oil benchmarks. If you want to trade in the oil market, choose one of them. However, choosing one of the benchmarks remember factors that affect their prices. By that, you will be able to forecast the future price more accurate and your trading will be profitable.

This article was written by Daria Bobrova, a senior analyst at FBS

Price of Gold Fundamental Weekly Forecast – Dollar Could Strengthen, Gold Weaken After China Cancels Trade Meeting

Gold futures closes marginally higher last week, but remained inside the previous week’s range. This technical chart pattern tends to indicate investor indecision and impending volatility. Creating the indecision is uncertainty over the U.S. Dollar’s expected response to the escalating trade dispute between the United States and China. The only certainty at this time is next week’s widely expected Fed interest rate hike.

Last week, December Comex Gold futures settled at $1201.30, up $0.20 or +0.02%.

Driving the price action in gold last week was the U.S. Dollar. For most of the week, gold was underpinned by a weaker U.S. Dollar. On Friday, however, gold managed to give back all of its weekly gains when the dollar rebounded to the upside. Driving the U.S. Dollar’s price action was the investor response to fresh tariffs by the U.S. and China.

To recap last week’s key events, the Trump administration announced it would impose a 10 percent tariff on $200 billion worth of Chinese imports. This was actually bearish news for the dollar because the market had priced in a 25 percent tariff. However, the full amount will be applied on January 1 if a new trade deal isn’t made.

China retaliated by announcing levies targeting over 5,000 American products worth $60 billion. The new tariffs are scheduled to go into effect next week. Investors sold the dollar on this news because some thought that China would target the supply chain by preventing the export of strategic minerals and key components for U.S. electronic products.

Essentially, it was the unwinding of long U.S. Dollar hedges that drove gold prices higher. The easing of tensions over the U.S.-China trade dispute encouraged investors to sell the dollar and buy gold.

Forecast

The trade dispute and the dollar will continue to drive the price action in gold this week. However, this week, the dollar could strengthen and gold could weaken. This is because China called off the trade talks with the United States and said it wouldn’t meet with high level negotiators until after the November mid-term elections.

Also contributing to the movement in gold will be the outcome of this week’s two-day Federal Open Market Committee meeting which culminates with the Fed’s interest rate and monetary policy decision on Wednesday, September 26.

Although the Fed is widely expected to raise its benchmark interest rate during the meeting, gold traders will be primarily focused on the direction the Fed will chart ahead. Traders essentially want to know how aggressive the Fed will be in increasing rates in the future.

The 25-basis point increase to the federal funds rate is already priced into the market. The hike will push the funds target to 2 percent to 2.25 percent, where it last was more than 10 years ago.

Since the rate hike has already been factored into the dollar and gold prices, traders will be paying more attention to any information that shows how much more monetary tightening will be necessary to keep the economy (and inflation) healthy.

Gold could be supported if the Fed appears to be too “dovish” in its assessment of the need for additional rate hikes. In other words if it drops the word “accommodative” from its monetary policy statement.

Oil Price Fundamental Weekly Forecast – Outcome of OPEC Meeting Will Dictate Direction This Week

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished higher last week with U.S. crude posting the biggest gains. Both futures contracts also challenged key technical levels on the monthly chart which indicated the longer-term uptrend was getting stronger.

The rally was primarily supported by concerns over supply due to the looming sanctions on Iran which are expected to begin in November. Also underpinning the market was another bullish U.S. government inventories report. The upside, however, was limited somewhat later in the week by expectations that increased production from Saudi Arabia and its allies would take care of any supply short-falls.

For the week, November WTI crude oil settled at $70.78, up $2.01 or +2.92% and December Brent crude oil finished at $78.24, up $0.63 or +0.81%.

Bloomberg reported last week, citing unnamed Saudi sources, that the kingdom was currently comfortable with prices above $80 per barrel, at least for short-term. Bloomberg also said that while Saudi Arabia had no desire to push prices higher than $80, it may no longer be possible to avoid it. This news helped spike prices higher.

The news raised the ire of President Trump who called on OPEC to “get prices down now!” ahead of Sunday’s meeting of major oil exporters.

At this meeting in Algeria, OPEC members were unlikely to push for an agreement to raise crude output, however, this line of thinking changed on Friday when Reuters reported, citing an unnamed source, that the 15-nation OPEC cartel and a group of producers led by Russia would be discussing a potential increase of 500,000 barrels a day.

In other news, the U.S. Energy Information Administration reported last Wednesday that U.S. crude supplies fell by 2.1 million barrels for the week-ended September 14. Analysts were looking for a fall of 3 million barrels.

Gasoline stockpiles declined by 1.7 million barrels for the week, while distillate stockpiles climbed by 800,000 barrels, according to the EIA. Traders were looking for gasoline inventories to decline by 1.6 million barrels and for distillates inventories to drop by 282,000 barrels.

On Friday, energy services firm Baker Hughes reported that U.S. energy companies cut oil rigs for a second week in three as new drilling stalled in the nation’s oil fields. Additionally, production was forecast to grow at the slowest pace in nearly two years due to pipeline constraints.

Drillers cut one oil rig in the week to September 21, bringing the total count down to 866. This is still higher than a year ago when 744 rigs were active.

Forecast

The direction of WTI and Brent crude oil this week is likely to be determined by the outcome of the OPEC meeting in Algiers on September 23. At this meeting, OPEC producers and other non-OPEC producers are expected to discuss how to best distribute planned increases to offset the loss of Iranian output, estimated at 1.4 million barrels a day. However, if the reports from late last week are true, this figure may rise as high as 1.9 million barrels.

If the output figure come in at the high end of the range then look for weakness in the market this week. However, don’t expect a change in the trend. Conditions are still fragile and the market susceptible to any supply disruption. We only expect to see a mild correction in prices.

Crude Oil Price Update – Could Open Lower if OPEC Decides to Increase Production

U.S. West Texas Intermediate crude oil futures posted a wild outside move on Friday before settling higher but near the middle of the range. Prices surged to a new high for the year as investors shrugged off President Trump’s tweets calling for OPEC to do something about rising prices. The rally was fueled by the notion that this weekend’s strategic meeting in Algiers would end without any major changes being made. Prices retreated after the surge following a report that OPEC is expected to discuss a 500,000 barrel per day increase in production.

November WTI Crude Oil settled at $70.78, up $0.46 or 0.65%.

WTI Crude Oil
Daily November WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $71.80 will signal a resumption of the uptrend. A move through $67.79 will change the main trend to down.

The minor trend is also up. A trade through $69.98 will change the minor trend to down. This will also shift momentum to the downside.

The contract’s retracement zone is $65.15 to $71.80. After spending several months inside this zone, crude oil is attempting to breakout to the upside. If successful, this would represent a major long-term bullish move.

The short-term range is $67.79 to $71.80. Its 50% level at $69.79 is the first support.

The intermediate range is $66.67 to $71.80. Its retracement zone at $69.23 to $68.63 is the next support zone.

The main range is $63.69 to $71.80. Its retracement zone at $67.75 to $66.79 is the third potential support zone.

Even if there is a short-term correction, the market should continue to attract buyers because of the series of retracement zone support levels.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $70.78, the direction of the November WTI Crude Oil futures contract is likely to be determined by trader reaction to the contract’s Fibonacci level at $70.86.

A sustained move over $70.86 will indicate the presence of buyers. If this move can generate enough upside momentum then look for buyers to make a run at taking out $71.80.

A sustained move under $70.86 will signal the presence of sellers. This could lead to a sell-off into the layers of support at $69.79, $69.23 and $68.63.

The key support area is the price cluster at $67.79 to $67.75.

Since the trend is up, buyers could come in on a test of any of these support levels. However, strong downside momentum could prevent any meaningful rallies.

Look for weakness early Monday if OPEC decides to increase production. The amount they are expected to discuss is 500,000 barrels. This won’t be enough to destroy the trend, but should be enough to limit gains.

Gold Price Futures (GC) Technical Analysis – Downside Momentum Could Drive Market into $1193.90 to $1187.50

Gold posted a wicked two-sided trade on Friday before closing lower. The market opened firm amid weakness in the U.S. Dollar, but that move quickly failed and the market plunged on renewed concerns about an escalation of the trade war between the United States and China. Traders may have also been responding to expectations of higher interest rates with the U.S. Federal Reserve widely expected to raise its benchmark interest rate by 25 basis points on Wednesday, September 26.

December Comex Gold settled at $1201.30, down $10.00 or -0.83%.

Comex Gold
Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down when sellers took out the last swing bottom at $1197.50 on Friday. The new main top is $1215.80. A trade through this level will change the main trend to up.

The main range is $1244.70 to $1167.10. Its retracement zone at $1205.90 to $1215.10 is resistance. This zone has rejected rallies numerous times since late August.

The short-term range is $1167.10 to $1220.70. Its retracement zone at $1193.90 to $1187.50 is the next downside target. It has been providing support since late August.

Daily Swing Chart Technical Forecast

Based on the close at $1201.30 and Friday’s price action, the direction of the December Comex Gold futures contract is likely to be determined by trader reaction to the short-term 50% level at $1193.90.

Despite the change in trend to down, a sustained move over $1193.90 is likely to indicate the presence of buyers. If this move creates enough upside momentum then look for a test of the 50% level at $1205.90. The rally could extend if this level is taken out with targets coming in at $1215.10, $1215.80 and $1218.00.

Taking out $1193.90 will signal the presence of sellers. Taking out $1192.70 will reaffirm the downtrend. This could trigger a further break into a main bottom at $1189.50, followed by the Fibonacci level at $1187.50.

The daily chart opens up to the downside under $1187.50. The chart indicates there is room to run with the main bottom at $1167.10 the next major target. Selling volume is going to have to increase substantially, however, in order to trigger an acceleration to the downside.

The catalyst behind early weakness on Monday could be the news that China cancelled its upcoming trade talks with the United States. This could lead to a “risk off” scenario which would make the U.S. Dollar a more attractive investment while putting pressure on dollar-denominated gold.

Silver Weekly Price Forecast – Silver markets looking for support

Silver markets rally during the week, bouncing from the $14 level. That’s an area that has been important more than once, so it’s not surprising that we have seen the market show a bit of buying pressure in that area. Friday was absolutely volatile, and I think that shows at the very least just how important this area is. However, by the end of the week we formed a green candle in that’s a good sign. Perhaps we could bounce towards the $15 level, which of course is a major round number and of its own right. The $14 level has been massive in the past, so I think it makes sense that we would bounce from here. However, longer-term traders are going to be better off buying physical silver more than anything else.

The alternate scenario of course is that we get a break down below the $14 level, especially on a daily close. If we have that happen, then the market probably goes looking towards an even longer term support level at the $12 level. This is all about the US dollar, and if it strengthens that continues to put bearish pressure on silver. I would also point out that the Gold markets have formed a couple of shooting stars in a row, so we are starting to get a bit of a divergence between these two markets, something that means there’s a lot of confusion out there.

SILVER Video 24.09.18

Crude Oil Weekly Forecast – crude oil markets continue to push higher

WTI Crude Oil

WTI Crude Oil markets rally during the week, breaking above the $71.15 level. The numbers were somewhat bullish in the inventory during the week, but most importantly we are starting to see global tensions rise, and of course the sanctions against the Iranians will tighten supply. However, the same time we have major issues coming into the possibility of a global trade war, which should drop to man. That being said, we are starting to trade the November contract in the futures market, which of course is the month that the Iranian sanctions kick in. Because of this, I fully anticipate that we are going to see this market continue to go higher, but not without the occasional pullback.

Brent

Brent markets were a little bit different in the sense that they have formed a shooting star for the third week in a row. This $80 level just above is a major resistance, and I think if we can clear that area this market will skyrocket. I suspect a pullback could be coming in the short term, but longer-term I fully anticipate that this market will continue to go higher. Quite frankly, market participants continue to buy the dips and I think that continues to be the case, especially now that the Iranians are going to be taken off line essentially. The one thing that has been weighing upon crude oil lately has been the surging US dollar, so if that turns around we could see petroleum markets accelerate to the upside rather quickly.

WTI Video 24.09.18

Natural Gas Weekly Price Forecast – natural gas markets rally towards resistance during the week

Natural gas markets have exploded to the upside with a very long green candle. We broke above the shooting star from the previous week, showing signs of very bullish pressure, and it is of course the colder time of year where we could see a break out, but last year we didn’t see that. It’ll be interesting to see what happens next, but I think the “redline” is somewhere near the $3.10 level. If we break above there, then the market will be free to go much higher, but that would obviously be driven by whether more than anything else. Pay attention to the weather forecast for the northeastern part of the United States, as it will drive a lot of the demand going forward.

As we are starting to see the markets focus on the winter months, there is going to be a natural proclivity to go long natural gas, but demand will fluctuate wildly. It’s interesting that the last inventory number was a little more bearish than anticipated, so it’s possible that the markets will turn right back around. However, I’m not willing to play against this candlestick, unless of course we were to focus on shorter-term charts. It’s difficult for a longer-term trader to get involved in this market, but if you focus on the daily chart, you should see plenty of opportunities between the two well defined boundaries. Again though, if we break above the $3.10 level, we could go much higher, perhaps as high as the $3.40 level.

NATGAS Video 24.09.18

Gold Weekly Price Forecast – Gold markets struggle during the week again

At this point, it’s a bit difficult to suggest that it’s going to be easy to trade this market from the long term, but we do have a couple of very crucial levels that we can pay attention to. If we can break above the $1225 level, then I think that the market could break out to the upside, perhaps reaching towards the $1250 level. If we can break above there, the market then could go to the $1300 level. The alternate scenario, I think that the market will reach down to the $1175 level. That’s an area of major support, so a break down below that level sends this market much lower, probably as low as $1100 rather quickly.

It’s likely that the easier trade is to take a break out to the upside, at least for the longer-term trader. Otherwise, we will probably see a lot of short term consolidation between these couple of levels, and that is a situation where it’s easier for the shorter term trader to go back and forth. However, looking at these longer-term charts does suggest that this area is crucial, as I have an ellipse drawn at a major gap higher back in January 2016. We have fill that gap previously, and now that we are back here informing shooting stars, I must admit that’s a rather ominous sign, but until we get some type of confirmation, longer-term traders should be patient.

Price of Gold Video 24.09.18

Silver Price Forecast – Silver markets volatile and skittish on Friday

Silver markets broke down during the day on Friday, reaching down to the $14.20 level before turning around to show signs of life again. That’s a very unhappy looking chart from what I can see, and that tells me that although we are continuing to show signs of strength, there’s also a lot of confusion this market. All you have to do is look at the Gold markets and realize that they are flashing much more negativity than the silver market. Because of this, I think there’s a lot of uncertainty, but I think that given enough time it’s likely that these markets will simply follow the US dollar. The Silver markets tend to be very volatile and a little less easy to navigate at times than the gold market. Because of this, I tend to buy silver in its physical form more than anything else. However, if you have the ability to trade the CFD market, just keep your position size small regardless of what happens as you could have gotten slapped around during the day rather quickly.

Ultimately, this is a market that is going to move drastically based upon the value of the greenback, and the easiest way to pay attention to it is using the EUR/USD pair as a proxy as it is the largest dollar-denominated currency pair. It should move in roughly the same manner.

SILVER Video 24.09.18

Crude Oil Price Forecast – crude oil markets all over the place on Friday

WTI Crude Oil

This is a market that was slapped around in a couple of different ways during the day on Friday, and the $70 level offering support is a good sign, but at the same time it looks as if the $71.50 level is offering significant resistance. Overall, I think that the market does want to go higher but the US dollar strengthening based upon the noise and the United Kingdom has put more bearish pressure on this. Overall, I think that the market will be paying attention to quadruple witching during the session as well, so quite frankly I would pay more attention to the longer-term trend of going higher.

Brent

Brent markets initially peaked at the $80 figure to turn around and fall towards the $78.50 level as well. In general, the market has been going sideways for some time, but with the Iranian sanctions coming, it’s likely that we are going to see a lot of volatility in this market, but I also believe there will be an uptrend overall, as the shrinking supply should only add more upward pressure. However, the US dollar is the counterbalance, so pay attention to that. The $77.50 level underneath will be supported as well, but at this point I think that oil traders have decided that they want to go higher. If we break above the $80 level, it’s likely that we will then go to the $82.50 level next. Expect volatility regardless of what happens, so be very cautious about your position size going into this next couple of days.

Crude Oil Inventories Video 24.09.18

Gold Price Forecast – Gold markets get hammered on US dollar strength

Gold markets got absolutely hammered during the day on Friday, reaching down to the $1200 level, an area that has been supported in the past. We wiped out a lot of order flow in both directions over the session, and now it looks as if markets are essentially freaking out over the comments of Teresa May suggesting that the Brexit might be a “no deal Brexit.” Ultimately, this market is well supported between the $1200 level and $1195 level underneath. This is an area that should continue to be massive in its implications, so if we were to break down below the band of support here, that would be extraordinarily negative.

At this point, I suspect that the market is probably going to go back and forth, and as a result range bound trading will probably work out quite nicely. However, longer-term charts look a bit ominous, as we are testing a major support level. If we do break down, it could be the next big “flush” in the precious metals area. If the market breaks down, it’s likely that the selling could be rather ferocious, and you can see that the hourly hammer with the bottom at the $1195 level would be an excellent sign that we are starting to find buyers. If we can break down below that level, I suspect that the momentum will pick up rather drastically. Pay attention to the currency markets, it’s all about the US dollar right now.

Gold Price Video 24.09.18

Gold Price Prediction – Prices Reverse Forming a Reversal Day

Gold prices reversed course forming an outside reversal day, which points to a short-term rejection of higher prices. Prices attempted  to break out but seller came in pushing the yellow metal lower.  A weaker than expected EU PMI report for September reversed the upward momentum in the Euro and allowed the dollar to gain traction. With Italy again in the crosshairs, the volatility of peripheral yields moved out versus the bund which also benefited the dollar. A stronger dollar is generally bad for gold prices as the are quoted in US currency and a stronger dollar means gold need to stay lower

Technical

Gold prices attempted to test resistance but failed near the 50-day moving average at 1,206. Prices were rejected and formed an outside reversal day which is a higher high a lower low and a lower close during an uptrend. This is an ominous sign and could allow prices to head back to support near the September lows at 1,187. Prices slipped through the 20-day moving average which is short term support near 1,200. Volatility remains subdued as the Bollinger band width, the difference between the Bollinger high and the Bollinger low, prints at the lowest level seen since June of 2018. Positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a declining trajectory which points to consolidation.

European Flash PMI Reading Where Softer than Expected

The European Union reported on an unexpected weakness in its initially composite PMI readings. Manufacturing was softer than expected and despite an uptick in services, the composites declined.

The composite PMI composite drop to 54.2 from 54.5 in August which is the lowest the composite reading has been since May. The Manufacturing flash PMI declined by 53.3 from 54.6 and which was offset by a rise in the services PMI which increased to 54.7 from 54.4.  Expectations were for the headline to increase to 54.6.

Gold Price Futures (GC) Technical Analysis – September 21, 2018 Forecast

Gold futures are trading lower shortly before the regular session opening after buyers failed to bite on an attempted breakout over key retracement zone resistance. The market was supported earlier by a weaker U.S. Dollar, but rising U.S. Treasury yields and expectations of a Fed rate hike next week helped limit gains.

At 1157 GMT, December Comex Gold futures are trading $1208.90, down $2.30 or -0.20%.

Comex Gold
Daily December Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1218.00 will reaffirm the uptrend. This is followed closely by another main top at $1220.70.

A trade through $1197.50 will change the main trend to down. This is followed by additional bottoms at $1192.70 and $1189.50.

The main range is $1244.70 to $1167.10. Its retracement zone at $1205.90 to $1215.10 is currently being tested. This zone is controlling the near-term direction of the gold market. Earlier in the session, traders rejected a rally to $1215.80, which was essentially a test of the Fibonacci level at $1215.10.

The short-term range is $1167.10 to $1220.70. Its retracement zone at $1193.90 to $1187.60 is support.

Daily Technical Forecast

Based on the early price action, the direction of the December Comex Gold market the rest of the session is likely to be determined by trader reaction to the Fibonacci level at $1215.10.

A sustained move under $1215.10 will indicate the presence of sellers. If this move can generate enough downside momentum then look for the selling to possibly extend into the main 50% level at $1205.90.

Taking out $1205.90 will indicate the selling is getting stronger. This could drive the market into a downtrending Gann angle at $1201.70. Crossing to the weak side of this angle will likely drive the market into the main bottom at $1197.50, followed by the short-term 50% level at $1193.90.

A sustained move over $1215.10 will signal the presence of buyers. The first target is the uptrending Gann angle at $1217.10. Overtaking this angle will put the market in a position to challenge the main tops at $1218.00 and $1220.70. Taking out these tops will indicate the buying is getting stronger with the next target angle coming in at $1223.20. This is another trigger point for an acceleration to the upside.

Basically, we’re looking for an upside bias to develop on a sustained move over $1215.10 and for a downside bias to develop on a sustained move under $1205.90.

Crude Oil Price Update – Trade Through $70.03 Confirms Closing Price Reversal Top

U.S. West Texas Intermediate Crude Oil futures are trading higher shortly before the cash market opening on Friday. Traders appear to be shrugging off a series of tweets by President Trump on Thursday criticizing OPEC policy and calling for the cartel and its allies to address the issue of rising prices. Continuing to underpin prices are concerns over a supply shortage due to the looming sanctions on Iran.

WTI Crude Oil
Daily November WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top may be signaling a shift in momentum.

A trade through $71.35 will negate the closing price reversal top and signal a resumption of the uptrend. A move through yesterday’s low at $70.03 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.

The short-term range is $67.79 to $71.35. Its retracement zone at $69.57 to $69.15 is the first downside target. The main range is $66.67 to $71.35. Its retracement zone at $69.01 to $68.46 is the second downside target.

The combination of the two retracement zones creates a support cluster at $69.15 to $69.01. This is the best downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

Daily Technical Forecast

Based on the early price action, the direction of the November WTI Crude Oil market the rest of the session is likely to be determined by trader reaction to the steep uptrending Gann angle at $70.29.

A sustained move over $70.29 will indicate the presence of buyers. If this move creates enough upside momentum then look for a drive toward $71.35. Taking out this level will signal a resumption of the uptrend.

A sustained move under $70.29 will signal the presence of sellers. The daily chart is wide open under this angle with the next target the short-term 50% level at $69.57.

If $69.57 fails as support, we could see an acceleration into a cluster of potential support prices at $69.17, $69.15, $69.04 and $69.01. Since the main trend is up, look for buyers to show up on a test of $69.17 to $69.01.

Natural Gas Price Fundamental Daily Forecast – Shorts Forced to Cover Despite Bigger-Than-Expected Storage Build

Natural gas futures are trading lower early Friday after surging nearly 3 percent higher the previous session despite a bigger-than-expected storage build. Traders are attributing the solid gains to aggressive counter-trend speculative buying and massive short-covering. The move essentially caught weak short-sellers by surprise, encouraging them to pay anything for production.

At 0947 GMT, November Natural Gas is trading $2.944, down $0.020 or -0.67%.

According to the U.S. Energy Information Administration, U.S. Natural Gas in storage increased by 86 Bcf to 2.722 for the week-ended September 14. The build was slightly more than the consensus estimate for an 83 Bcf build.

The injection was also below the 87 Bcf build reported during the corresponding week in 2017 but more than the five-year average addition of 76 Bcf, according to EIA data. Additionally, it is only the second time in the last month the injection was more than average.

As a result, stocks were 672 Bcf, or 20%, less than the year-ago level of 3.394 Tcf and 586 Bcf, or 18%, less than the five-year average of 3.308 Tcf.

The injection was also more than the 69-Bcf build reported the week-ending September 7 as population-weighted temperatures across the Lower 48 dropped by 6 degrees and significantly dampened demand for gas-fired power generations, particularly across the Midwest and Northeast.

At 2.722 Tcf, total working gas is below the five-year historical range and sits 196 Bcf lower than the five-year minimum.

Forecast

The market opens today’s session on the strong side of a retracement zone at $2.911 to $2.880. This area is now support. If buyers can continue to build on this week’s upside momentum then we could see a drive into the next main top at $3.013. This is another potential trigger point for an acceleration into the next pair of tops at $3.032 and $3.064.

Looking ahead, according to S&P Global Platts Analytics, “Over the past five years, storage levels have peaked on the week-ending November 9 at 3.8 Tcf. That would allow for eight more injections before the flip to net withdrawals begin. An early forecast for at least the next three weeks show no significant reduction in the deficit.”

“Storage is now expected to peak at 3.26 Tcf before the switch to withdrawals in early November,” according to the latest forecast by Platts Analytics. “If so, it would be the lowest level to start the heating season since 2003, when stocks peaked at 3.18 Tcf. However, high gas production has kept prices from rising despite the large storage deficit.”

Platts Analytics expects a build of 52 Bcf for the week in progress, which would expand the storage deficit to the five-year average by 29.

Price of Gold Fundamental Daily Forecast – Underpinned by Weaker Dollar, Gains Limited by Rising Treasury Yields

Gold is trading higher shortly before the cash market opening on Friday as the U.S. Dollar continues to weaken on dampened fears of a full-blown U.S.-China trade war. Gold is currently trading at the upper end of a key technical retracement zone, putting the precious metal in a position to post its first weekly gain in four weeks.

At 0913 GMT, December Comex Gold is trading $1213.40, up $2.10 or +0.17%.

Underpinning gold this week is the weaker U.S. Dollar. The greenback is under pressure because of the unwinding of long hedges placed in anticipation of a full-blown trade war between the U.S. and China. However, events earlier in the week suggest that the tone between the two major economic powers may be weakening.

Investors had been buying the dollar believing that the United States has less to lose from the dispute. But the dollar has weakened this week. Investor capital has been leaving the greenback and flowing back into the emerging market currencies. This has helped prop-up dollar-denominated gold.

Forecast

Based on the early price action, the direction of the December Comex Gold futures contract is likely to be determined by trader reaction to a technical level at $1215.10. Even if this level is overcome, investors still have to deal with a pair of tops at $1218.00 and $1220.70.

Despite the sharp break in the U.S. Dollar against a basket of currencies, gold buyers have been tentative because of rising U.S. Treasury yields and expectations of a Fed rate hike next week. These events could keep a lid on gold prices.

Furthermore, the selling in the dollar can’t go on forever due to diminished concerns over an escalation of the trade dispute. Keep in mind that the trade dispute is an on-going event and we could see an uptick in trade tensions at any time. This would send investors back into the dollar. Furthermore, U.S. tariffs could actually improve the U.S. trade balance, which would further strengthen the dollar.

Gold is in an uptrend on the daily chart. However, traders still face a mountain of resistance at $1215.10, $1218.00 and $1220.70. If the sellers continue to block the buyers, or if the buying volume dries up, gold could easily retreat into a short-term support level at $1205.90. The selling pressure could increase if this level is taken out convincingly.

Precious Metals Continue To Gain Ground on Weak US Greenback in Broad Market.

Gold prices edged up on Friday to a one-week high as the dollar weakened on receding fears of a full-blown Sino-U.S. trade war, keeping the yellow metal on track for its first weekly gain in more four weeks. China’s measured response to new US tariffs earlier this week triggered hopes that a further escalation of trade war could be avoided. Spot Gold XAUUSD clocked an eight-day high of $1,211.05 earlier today and is currently trading at $1208.22 an ounce up by 0.10% on the day, while US Gold Futures GCcv1 are trading at $1212.80 an ounce up 0.12% on the day. New U.S. and Chinese tariffs on each other’s goods were set at lower rates this week than previously expected, rising hopes that hostilities between the world’s two largest economies may be easing.

Investors Focus on OPEC Summit This Weekend Before Placing Further Bets

Investors have been buying the dollar believing that the United States has less to lose from the dispute. But the dollar has weakened this week, with investor flows being diverted away from the greenback to its peers such as emerging market currencies as trade war concerns have ebbed. The dollar index is hovering near a 10-week low against a basket of major currencies while Investors await next week’s Federal Reserve meeting, where the U.S. central bank is widely expected to raise benchmark interest rates. Due to other external uncertainties including and not limited to trade tensions and a U.S. mid-term election within two months, it is possible that investors will be prepared to give the Fed more time for assessment of 2019 rate hike outlook. Meanwhile Spot Silver XAGUSD is trading at $14.41 up 0.63% on the day.

Crude oil futures were stable to slightly lower during mid-morning trade in Asia Friday as market participants adopted a wait-and-watch approach ahead of OPEC’s meeting in Algiers over the weekend to discuss future production policy. US President Donald Trump’s tweet on reducing oil prices also weighed on sentiment. OPEC and its partners will meet in Algiers this weekend to discuss production policy measures to offset any loss of Iranian crude barrels as a result of US sanctions that snap back in November. Iranian oil minister Bijan Zanganeh on Thursday said he would veto any OPEC deal that imperils Tehran’s oil market share, complicating the organization’s talks with Russia and other partners to institutionalize their supply management accord beyond this year. Sunday’s Algiers summit, the first formal meeting of the monitoring committee since OPEC, Russia and nine other non-OPEC partners on June 23 agreed to raise their collective production by 1 million b/d. Spot Crude WTIUSD is trading at $71.14/b up 0.82% on the day.