Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Precious Metals & Energy - Weekly Review and Calendar Ahead

CommoditiesAug 01, 2021 06:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com -- Gold settled up for the week and month as a Federal Reserve standing resolute against any immediate talk of stimulus tapering or rate hike restored some shine to the yellow metal.

Yet, none of the precious metals had a month to really crow about in July.

As we move deeper into the third quarter, the question that really begs asking is what the prospects are for the top four in the precious space - gold, silver, palladium and platinum - and which of these could stand out in August.

Sunil Kumar Dixit of Kolkata, India-based SK Dixit Charting breaks it down for Investing.com readers, saying gold probably has the most attractive fundamentals of the lot, despite its spotty performance in the past nine months.

Front-month gold on New York’s Comex settled down $18.60, or 1%, at $1,817.20 an ounce. For the week, it rose 1%.

More importantly, for July, it finished up almost 3%, after June's 7% plunge that turned out to be its worst month since Nov 2016.

The June tumble aside, gold had a decent couple of months, rising almost 8% in May and 3% in April. Even so, year-to-date, gold is down more than 4%.

Dixit says the good thing for gold is the spot monthly chart has taken support at the Middle Bollinger Band at $1,770, and around the 20-month Exponential Moving Average of $1,740.

The stochastic Relative Strength Index reading of 16/15 with a golden crossover also indicates enough room for continuation of the upside momentum, he said.

“As long as gold holds above $1,770 and $1,740, traders can look for pricing in the $1,870-$1,916 range,” Dixit added.

Ed Moya, head of research for the Americas at New York’s OANDA, also has a positive view on gold despite its uneven performance.

“Bullion bulls are probably feeling pretty optimistic,” said Moya. “Gold appears to be close to triggering technical buying following the aftermath of the Fed, persistent delta variant concerns, and depressed global bond yields.”

After two weeks of anemic action, gold longs got a break on Wednesday when Federal Reserve Chair Jerome Powell said the central bank wasn’t ready to think of raising U.S. interest rates as it was still focused on buying assets to support an economy recovering from the coronavirus pandemic.

Powell also refused to go near any talk of when the Fed might consider tapering the combined $120 billion the Fed was plonking each month into Treasury bonds and agency mortgage‑backed securities. His mantra: It isn’t time.

Getting toward the Fed’s twin mandates of maximum employment for Americans and sustainable inflation were the goals, he reasoned.

U.S. jobless claims stood at 400,000 and above for a second week in a row, according to Labor Department data on Thursday that suggested a continued challenge for the fragile labor market recovery amid the coronavirus pandemic.

The Personal Consumption Expenditure Index, the Fed’s preferred gauge for inflation, rose by 3.5% year-on-year in June - its most in 30 years - when stripped of volatile food and energy prices.

Since January, gold has been on a tough ride that began in August last year - when it came off record highs above $2,000 and meandered for a few months before stumbling into a systemic decay from November, when the first breakthroughs in Covid-19 vaccine efficiencies were announced. At one point, gold raked a near 11-month bottom at under $1,674.

After appearing to break that dark spell with a bounce back to $1,905 in May, gold saw a new round of short-selling that took it back and forth between $1,700 and $1,800.

Gold is currently consolidating between the 50- and -100 day simple moving averages. If it clears $1,850 next week, it might be able to make a run toward $1,900.

The risk, however, is U.S. jobs showing a bigger-than-expected gain for July in the Labor Department’s monthly nonfarm payroll report due next week. If that overshoots forecasts, it could complicate the Fed’s aim of keeping the stimulus on for the foreseeable future and rates lower for longer. Gold might be caught in treacherous waters again if the job numbers surprise.

Among other precious metals:

Silver

“Silver has been reluctant to post any bullish signature on its monthly chart,” said Dixit. “The entire month's price behavior for July displayed sideways’ hesitation with a bearish summary.”

Dixit said the stochastic Relative Strength Index negativity with a reading of 70/65 gives enough room for downside move in spot silver to test the middle Bollinger Band at $22.50, from where it could possibly stage a recovery toward the bullish $30 perch.

Palladium

“For the third month in a row, palladium failed to hold to marginal gains and closed down in a bad mood,” Dixit noted of the autocatalyst metal for gasoline

Accordingly, spot palladium’s stochastic Relative Strength Index gives a negative crossover and a reading of 40/23 strengthens the case for a further correction of $400 to the region of $2,450-$2,250, he added.

Platinum

“Platinum continued to close bearish with an inverted hammer formation which gives further 100 points downside to $955,” said Dixit of the autocatalyst cousin to palladium used in diesel engines. “The month-long price behavior shows bias to move lower and test horizontal and static support areas of $975-$955.”

Spot platinum’s stochastic Relative Strength Index parameters of 60/79 reinforced  negative extensions that weighed on platinum, said Dixit.

However, the Middle Bollinger Band coinciding with $975 “could give platinum a soft floor to stage a bounce”, he added.

Oil Market & Price Roundup

Oil had its best week in five on Friday after outsized U.S. draws in everything, from crude to gasoline and diesel, helped bulls put the market back on a positive track.

New York-traded West Texas Intermediate crude and London’s Brent also posted modest gains for July, extending oil’s positive run to a fourth straight month.

WTI settled up 33 cents, or 0.5%, at $73.95 per barrel on Friday. The benchmark for U.S. oil was up 2.1% for the Monday-Friday stretch, marking its best week in five. It also showed a gain of 0.7% for July.

Brent, the global benchmark for oil, settled up 31 cents, or 0.4%, at $75.41 on the day. For the week, Brent rose 1.8%. For July, Brent showed a 1.1% gain. That was its best in six weeks.

After a soft start to the week, oil’s upside was restored by data from the Energy Information Administration showing a crude inventory drop of 4.089 million barrels during the week to July 23, compared with analysts' expectations for a draw of 2.928 million barrels.

The big drawdowns in crude came as refiners focused on pushing out as much gasoline as they could this summer to meet projected demand for the peak U.S. driving season.

According to the EIA, refiners operated at 91.1 percent of capacity for the week to July 23, not far from highs seen during the pre-pandemic summer of 2019.

Gasoline stockpiles on their own fell by 2.25 million barrels for the week to July 23, against a forecast 1.24 million.

The outlier for the week, however, was diesel-heavy distillates, which drew down by 3.1 million barrels, more than quadruple the forecast decline of 700,000. The outsized draw shows that demand for trucking and other commercial vehicle fuel was as strong as the consumption of gasoline.

Oil prices were held back earlier in the week after a new surge in Covid cases from the Delta variant of the virus posed headwinds for the market.

While investor risk appetite in oil has grown in recent days, allowing bulls to regain control of the market, the emergence of new Covid threats in the U.S. and elsewhere make the path forward more challenging compared with earlier in the year when crude prices rose almost without stop week after week.

Energy Markets Calendar Ahead

Monday, Aug 2

Cushing inventory data from surveyor Genscape

Tuesday, Aug 3

American Petroleum Institute weekly report on oil stockpiles.

Wednesday, Aug 4

EIA weekly report on crude stockpiles

EIA weekly report on gasoline stockpiles

EIA weekly report on distillates inventories

Thursday, Aug 5

EIA weekly report on natural gas storage

Friday, Aug 6

Baker Hughes weekly survey on U.S. oil rigs

Disclaimer: Barani Krishnan does not hold a position in the commodities and securities he writes about.

 

Precious Metals & Energy - Weekly Review and Calendar Ahead
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (11)
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 01, 2021 10:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
At the time to writing he did not but he could be by now
Dave Jones
Dave Jones Aug 01, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why don't you own gold Barani?
Barani Krishnan
Barani Krishnan Aug 01, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I don't trade for two simple reasons: It helps me sleep at night and not have any bias in my writing. Forget trade; even if I were to invest in gold, I'd have a bias because my money is there and I want it to appreciate over time. Without any commitment to any asset, I'm free to express myself without self-interest. Hope that explains.
Titus Pullo
TitusPullo13thhh Aug 01, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Barani Krishnan that’s a great answer sir!
Barani Krishnan
Barani Krishnan Aug 01, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks. It's true.
Tyrone Jackson
Tyrone Jackson Aug 01, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
But you should still have a few ounces stashed away. We would not hold that against you sir.
CHADWICK RICHINGTON
CHADWICK RICHINGTON Aug 01, 2021 9:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold will skyrocket
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 01, 2021 9:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
paradoxically, money will evaporate in both gold and stocks. crypto currencies will be the same. very soon a negative taper will come, that is fed will sell bonds than buying. paradoxical conundrum
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 01, 2021 9:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold will never again go above 1965. Between 1800 and 1965, so much selling will come that will prevent gold from going any higher. the shifting of gold money into stocks is what causes gold selling thinking stocks are better than gold. but over time both stocks and gold will go down gold is likely to be sold off all the way down to 640. good luck
Kelly Mayer
Kelly Mayer Aug 01, 2021 8:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm just worried about the WHO's report on 200 million cases and mortality rates increased in 2 weeks from now, as well as the market correction that is due... also, fall/flu season coming. And the infection rates on the vaccinated. This... looks bad... really bad
Titus Pullo
TitusPullo13thhh Aug 01, 2021 8:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No it doesn’t the media is just blowing this out of proportion. You want clues to whats going to happen look to India and the UK. India was supposed to be a catastrophe, huge population with crazy density which made it impossible to socially distance, non exisiting health care system, low vaccine rates, yes they had an awful few months, but then things got better and stabilized. UK developed health care system, high vaccine rates, they are fine and fully open. Don’t believe the hype and look at the evidence.
Kelly Mayer
Kelly Mayer Aug 01, 2021 8:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Titus Pullo I get what you are saying, but i have witnessed in the last 15 months the most amazing MSM propaganda machine doing to the market whatever they please... The blowing out of proportions is the new normal, and that is what is scaring me... That, and the Indonesian scenario, which is driving cases and mortality numbers up... Does not mean its a legit scenario, but its the one they are presenting in the West and the one that is going to drive the markets...
cha Dara
cha Dara Aug 01, 2021 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
❤❤❤
Kithmih Luxury Life
Kithmih Luxury Life Aug 01, 2021 8:17AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold will reach 1850 in next week ?
Ibeyaima Brahmacharimayum
Ibeyaima Brahmacharimayum Aug 01, 2021 8:08AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thankfull
Jamaal Zaada
Jamaal Zaada Aug 01, 2021 8:08AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what I can do for you my boss
Ibeyaima Brahmacharimayum
Ibeyaima Brahmacharimayum Aug 01, 2021 8:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thank
Sib Che
Sib Che Aug 01, 2021 8:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Long Run Gold will hit all time high when US stock crashes very soon. Maybe in few yrs time will hit to 4000usd to 6000usd
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email