Lucknow(Coinchapter.com): With the U.S. dollar weakening ahead of Federal Reserve chair Jerome Powell’s speech, the price of most major U.S. commodities increased over the previous day on November 30. Furthermore, investor sentiment was positive after the much-expected ease in policy restrictions in China amid fewer reported COVID-19 cases.
Oil
U.S. Western Texas Intermediate (WTI) price rose by 2.9% to $81.2, while spot brent crude rose by 1.25% to $86.
Meanwhile, expected supply restrictions also underpropped oil prices. As per Reuters, U.S. crude oil stocks dropped by 7.9 million barrels in the week ended Nov. 25. It also added that the International Energy Agency expects Russian crude production to be cut by 2 million barrels of oil per day by the end of the first quarter of next year.
The formation of a double bottom is worth looking at, as the pattern normally dictates an upward trend in price.
The sweet spot for an upward move would lie around the $91-mark, where the 50-Daily and 20-Daily Simple Moving Averages collide. A breakout could even push the price back to the apex of its horizontal channel, around $99.
However, expect gains to be capped as threats of global recession still loom large. Therefore, one should set their sight around $76.5 support in a downward move. In case of a breakdown, expect some short bets to be made.
Wheat
U.S. wheat futures remained largely mixed as investors awaited the delayed USDA crop production data for market direction.
While the price increased slightly by 0.5% on the general market sentiment, wheat copped a monthly percentage loss as cheap supplies from the Black Sea region kept a lid on U.S. exports.
From a technical angle, it isn’t easy to assess where wheat futures might end up.
The continuation of over a month-long down-channel would likely pressurize prices heading forward. However, bullish investors can expect a minor period of gains once the daily RSI hits oversold territory of the price slips to a strong support region of 740’0.
Natural Gas (Futures)
Unlike the abovementioned commodities, U.S. Natural Gas futures dropped by 1.17% amid fears of less gas demand over the next two weeks.
According to Refinitiv, average U.S. gas demand, including exports, would rise from 116 billion cubic feet per day (bcfd) this week to 127.8 bcfd next week. These forecasts were lower than Refinitiv’s earlier outlook.
From a technical viewpoint, one can expect the price to ease at the lower trendline of a descending channel, around $6.5. A rebound from this area would lead to another leg upwards of $8.2, barring external abnormalities.
An instant rebound from $7.1 is also possible, allowing the daily RSI to complete its course to the overbought territory before heading lower.
Gold
Prices of precious metals are dictated not only by the interplay of supply and demand but also by the state of the U.S. dollar. In theory, a cheaper U.S. dollar makes gold more affordable as a commodity.
Gold futures by 0/5% to $1,772.5. Furthermore, an analyst told Reuters that should Powell take a hawkish stance, the dollar would strengthen, and gold will move lower, probably back to the $1,745 level. However, a dovish stance might push gold to the $1,780 level.
Technically, it was refreshing to see gold break out from a nearly 8-month-long descending wedge during early November. Based on the wedge’s height, gold eyed a 14% ascent from the breakout point. This meant another 10% ascent was on the cards over the next few months.
For this move to materialize, it was important to gain a foothold above the 50% and 61.8% Fibonacci Extensions.
Meanwhile, an unexpected decline would likely be curtailed at a demand region of $1,620-$1,630.
Silver
Silver, which shares a high correlation with gold, rose along with yellow metal. CFDs on silver moved up by nearly 1.5% to $21.7. However, its upside was limited because of an overhanging resistance of $21.4-$22.
Even though its daily RSI was gearing for another leg upwards, the overbought zone was expected to keep a lid on prices.
A support region of $20.4 could aid a brief recovery should the price move south. However, barring this zone, there weren’t many strong historic support levels to rely on above $18.6. Meanwhile, bulls would hope to overturn $22 as quickly to maximize gains.
Should a golden cross materialize, expect further aid bullish sentiment.
Copper
Following gold and silver, copper rose by 2.5% to $3.75.
Copper investors might have been frustrated the last few weeks after an ascending triangle breakout was cut short at the daily 200 simple moving average. However, the price tested the upper trendline again on November 30, suggesting another possible breakout could be formulated soon.
One should keep an eye out for a daily close above $3.8. The projected move would likely result in another 3.6% ascent. However, copper’s ability to continue pushing upwards on the chart would depend on whether or not it can overturn the daily 200-SMA, considered the ‘final stand’ for an uptrend.
For the moment, an RSI rebound from 50 is a healthy sign that points to an active bullish sentiment among traders. However, the same can quickly change if the price weakens below $3.54. A close below the lower trendline could even threaten a breakdown to new lows if bulls fail to uphold the price.
