My view on Silver

 $22 is a very strong support zone for silver. It has been since December of 2022. Prior to Dec it acted as a resistance. See the resistance in the month of November 2022. 

After March 2023, silver has not gone below 22. This price has acted as a strong support in June, August and twice in September. 

Silver's performance in the next quarter of Oct-Nov-Dec will be interesting. 

Will silver trade below $22 depends on a lot of factors - one being macro economics and the second being the international foreign policies which add risk factors to the economy. 

Is Government Shutdown a reaility or Republicans and Democrats will find a technical loophole to circumvent it?

Will China surpass the economic downturn?

We may not have answers to many of these quesions now. However, these are the major factors which will unerpin the price of Silver in coming days in my opinion. 

My view on Natural Gas

There is a major price shift in Natural Gas. 

In the first week of September, we saw price trading in the range of 2900 (high) to 2650 (low).

We see the price shift to a high of 3000 near Sep 18th while taking a new support at 2800. 

Recently, the price is now trading in a range of 2800 (low) and 3000 (high). 

There is a new immediate support formation at level 2900 since Mon 25th. 

My observation on Crude Oil

 The crude oil price dropped sharply two consecutive days.

It may make sense with the rise in Imports.

Will the price reach 50 Days Moving Average or will it move up since it reached 20 Day moving average. 

We would only know this on Monday. 

Commentaries on Crude Oil

 

The Daily rig counts have decreased

 

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Russia suffering fuel crunch due to combination of factors.

Russia has temporarily banned exports of gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect in order to stabilize the domestic market, the government said on Thursday.

"Temporary restrictions will help saturate the fuel market, which in turn will reduce prices for consumers," the government said in a statement.

The ban is indefinite and further actions will depend on the saturation of the market, according to Russian First Deputy Energy Minister Pavel Sorokin.

"We expect that the market will feel the effect quickly enough. But then it will depend on the saturation of the market and the results," Sorokin said.

The government statement added: "Previously, to stabilise the situation on the fuel market, the government raised the mandatory supply volumes of motor gasoline and diesel fuel to the commodity exchange.

"Daily monitoring of fuel purchases for the needs of agricultural producers with prompt adjustment of volumes has also been set up."

rs focused on a tighter supply outlook after Moscow issued a temporary ban on fuel exports while remaining wary of further rate hikes that could dampen demand.

UPDATE:

The Russian government has approved some changes to its fuel export ban, lifting the restrictions for fuel used as bunkering for some vessels as well as diesel with high content of sulphur, a government document showed on Monday.

It also lifted restrictions on the export of fuel already accepted for export by the Russian Railways and Transneft (TRNF_p.MM) before the initial ban had been announced last week.

 

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"Crude oil prices have started the week on the front foot, as the market continues to digest Russia's temporary ban on diesel and gasoline exports, into an already tight market, offset with the Fed's hawkish message that rates will stay higher for longer," IG Markets analyst Tony Sycamore said.

China's manufacturing sector is expected to return to expansion mode in September, with the purchasing manufacturing index forecast to rise above 50 for the first time since March, Goldman Sachs analysts said.

Expectations of better economic data this week from China, the world's largest crude importer, also lifted sentiment. However, analysts flagged that oil prices face technical resistance at November 2022 highs that were hit last week.

 

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Tropical Storm Phillipe may do landfall by next week. 

Commentaries on Natural Gas and Crude Oil

 

On the U.S. East Coast, the National Hurricane Center projected Tropical Cyclone 16 would strengthen into a tropical storm later Thursday before slamming into coastal North Carolina, Virginia and Maryland over the weekend.

Analysts noted that tropical storms on the East Coast generally reduce gas demand by knocking out power to homes and businesses.

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Commentaries on Crude Oil

Fed chair J Powell decides to keep the interest rates unchanged. However, there is growing consensus of one more hike this year.

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U.S. Crude oil inventory dropped. 

So, did the crude oil imports. 

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Bank of America, Citigroup and Goldman Sachs are now all predicting US$100 Brent crude prices before 2024, as is Chevron CEO Mike Wirth, according to a Bloomberg report.

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"We're chewing on this right now," said Andrew Botterill of Deloitte Canada, in an interview Wednesday in Calgary, where hundreds of oil and gas executives from around the globe are gathered this week for the 24th World Petroleum Congress.

Botterill said he's currently working on Deloitte's upcoming oil price forecast report and considering whether to revise his own earlier projections higher. "I can absolutely see it ($100 oil) ... I absolutely think we will have moments," Botterill said. "I can list a lot more reasons why oil will move up right now than down."

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Traders locked in profits following a 10% gain in prices since the start of the month, ANZ Bank said.

Despite the small inventory draw, concerns remain that ongoing US inventory declines could cause storage facilities to reach their operational minimum, according to ANZ Bank.

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Job data are coming strong week on week. Shows that economy is resilient. 

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U.S. Philadelphia Fed Manufacturing Data fell sharply. 

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"Crude oil traders focus on consolidation has been strengthened by the higher-for-longer message signalled by the FOMC dot plot, but while it may raise some demand concerns for 2024, the short-term outlook points to continued tightness. For now, the stronger dollar and reduced risk appetite may see Brent trade lower towards 90.60 and WTI towards 87.50," Saxo Bank noted.

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Crude oil prices could spike to above $100 per barrel in the run up to winter, Bjoern Jesch, global chief investment officer at DWS Group told Reuters.

"When you ask me about risk scenarios, there is high momentum in energy prices and what I do see as the risk, is that moving more to the colder months, probably there is an escalation," Jesch, who oversees investments at the DWS Group.

"I do see definitely a risk of spiking energy prices maybe over $100 for a short period of time." The speed of the recent gains also gave cause for concern said Madeleine Ronner, portfolio manager at DWS, leaving economies little time to adjust, especially in a scenario where the momentum was supply driven, as it is now.

"If it's a slow increase, it's much better, but if it happens as fast as it happens now, that's more problematic," Ronner said.

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Market Commentary on Crude Oil

 Oil prices fell nearly $1 on Wednesday ahead of the U.S. Federal Reserve's interest rate decision.

"The oil rally is taking a little break as every trader awaits a pivotal Fed decision that might tilt the scales of whether the U.S. economy has a soft or hard landing," said Edward Moya, senior market analyst at data and analytics firm OANDA.

Moya added that the oil market is still "very tight" and will remain so over the short-term.

"Unless Wall Street grows nervous that the Fed will kill the economy, the crude demand outlook should (only) gradually soften, but the oil market will easily have a supply deficit throughout winter."

"We have nudged up our 12-month ahead Brent forecast from $93 a barrel to $100 a barrel as we now expect modestly sharper inventory draws. The key reason is that significantly lower OPEC supply and higher demand more than offset significantly higher US supply," said Goldman Sachs analysts in a Wednesday note.

"Overall, we believe that OPEC will be able to sustain Brent in an $80-$105 range in 2024 by leveraging robust Asia-centric global demand growth and by exercising its pricing power assertively."

Russia's government is considering imposing export duties on all types of oil products of $250 per metric ton - much higher than current fees - from Oct. 1 until June 2024 to tackle fuel shortages, sources told Reuters on Tuesday.

Prices fell despite a bigger-than-expected draw in U.S. oil stockpiles.

Market players are expecting that the Fed would keep interest rates on hold.

Given the fundamentals and positive sentiment, we could see ICE Brent above US$100/bbl soon but won't sustain long due to growing political pressure.

Also, the Saudis and the OPEC group will probably not want to push the market too high, given the demand destruction risks.

My Analysis on Crude Oil Mini

Crude oil Inventories showed increment.

Cushing Crude oil Inventories

Weekly U.S. Baker Hughes Oil Rig Count showed a slight increment

U.S. Baker Hughes Total Rig Count also showed a slight increment. 

Forward curve is declining, indicating the forward month futures are trading below the current month trade. This Backwardation is seen positive to the price. 

Chinese buyers have booked only 14 million barrels for November delivery, a Singapore-based trader estimated, down from 22 million barrels in June, the highest in 2-1/2 years.

“The size of the domestic crude stock is enough to service a thirsty refinery sector, more than enough to service a stalled economy and large enough to weather any more additions to this (oil price) rally without having to resort to panic spot buying,” said John Evans from oil broker PVM.

“The buying frenzy that we saw earlier this year has cooled down,” he said.

My Analysis on Silver Micro

Silver Micro on MCX 

Silver broke the June support, but could not close below the June month's low price supported by strong buy rally from Shanghai Gold Exchange.

Why did Silver break the support?

Strong Jobs data. 

Followed by, better than expected Retail Sales Data

Convincing investors and traders, the economy is not as bad as anticipated. 

The strong Producers Price Index due to rising crude oil prices

The effects is now seen in CPI data

Means the fight for inflation is not over yet. The Fed will act to suppress the inflation by rising Interest rate, which then makes Dollar stronger. 

This led the silver to break the support.

Then, Why did Silver rise?

As per the article posted on Friday on Kitco -

The overall message among global central banks is that interest rate hikes are coming to an end and that is bullish for gold,” said Edward Moya, senior market analyst at OANDA. "Gold might not be ready to break out, but there are risks that central banks break something, which continues to support the precious metal.

That being said, we saw a strong buying in Shanghai Gold Exchange.

One being the start of Mid-Autumn Festival.

Ray Jia, senior analyst at WGC China, said despite challenges, an improved outlook for China's economy could provide some support for local gold demand. Also, various jewelry fairs and industry events may spur both manufacturers' and retailers' replenishing demand. Furthermore, given the upcoming National Day holiday and Mid-Autumn Festival, retailers' inventory restocking is likely to continue.

While, The Dollar strength weakened the Silver and Gold price, The Chinese festival brought in the needed support to keep the Silver and Gold retain the price level. 

Will it continue to do so post U.S. Interest rate decision, is a question is something that we need to watch.

That's all for today. 

My Analysis on Silver Micro

Silver Micro on MCX

Silver is now trading in the range 70000 - 72000 which has previously acted as a support zone. 

This is the zone where the Bears have struggled to pull down the silver price further. 

It's an important zone where the Bulls have taken control over the price and has given the upside move. 

The question is, what will boost Bulls confidence to take the price upwards. 

To find an answer, we may have to look at the events that occurred in the past, which pushed the price upwards. 

U.S. Jobless Claims 4-Week Average

Period taken for analysis is from Mid June - Mid July. 

We see, the Average value is changing its trend from downward slope to upward slope. 

Period taken for analysis is Mid July to Mid August.

A similar trend is seen where average 4-week Jobless claims has now changed the trend. In August it begins to rise over forecasted value. 

The impact of both the cases seen is that the silver price pivots and starts rising. 

Jobless claims 4-week Average is a good indicator to know when the price of Silver could pivot.

The recent data published, shows that 4-week average has not yet pivoted. It is still declining.

Which may be a sign that currently price is still on a consolidation phase and will hold till further confirmation till Sep 14th. 

Till then, bye. 

 

Hello

I am starting this page to write my observations on Crude oil, Natural gas, Silver. 

Sometimes, I may even write about currency pairs or economics in general.

See you soon.