OIL BOUNCES AS PRECIOUS METALS CONTINUE THEIR BULLISH TREND

Oil bounces along the seafloor bottom overnight as precious metals continue their bullish unwind from earlier in the week, ignoring an emotional U.K. election.

Crude Oil

Both Brent and WTI closed almost unchanged overnight despite both attempting a failed dead cat bounce in the New York session leaving the crude contracts down some 5.0% for the week. Following the king hit from the Crude Inventories number Thursday morning (Singapore time), both contracts have a suspiciously consolidative look about them before more downside as we run into the week’s end.

The Baker Hughes Rig Count this evening is unlikely to provide much respite either, and oil will probably have to rely on a weaker U.S. dollar or some headline-driven volatility to pick itself up off the floor.

Brent spot trades at 47.45 in early Asia with resistance at 48.50 and then 50.00. Support is very near at 47.40 with the next level below this the May liquidation low at 46.30.

WTI spot trades at 45.30 with resistance at 46.50 and then 48.20. Support again is very near at 45.00 with a break potentially targeting its May low of 43.50.

Precious Metals

Gold clung on to its uptrend overnight by the skin of its teeth, just managing to hold recent trend line support, this morning at 1274.30. A flat stock market in the U.S. and no new bombshells from ex-FBI Director Comey in Congress seems to have unwound some of the safe haven premia from gold in the last 24 hours.

Looking at gold’s price action, the gold price may well have had a significant amount of uncertainty built into it over the week which was given a further boost by a weaker U.S. Dollar initially. Traders may also have taken fright by the failure of gold to breach its April high of 1296.00 this week leaving a technically significant double top now at this level on the charts.

Ahead of the weekend, it would not be surprising to see Asia hedge some weekend risk and for buying to emerge in the session. However, gold may take its cue from Silver as it did yesterday, with the later breaking critical support at 17.5000 overnight which also took out it’s 100 and 200-day moving averages. If silver continues to drop to its next support near 17.2000, this may be the straw that breaks gold’s back.

This morning Gold trades at 1279.50 with resistance at 1289.00 followed by 1296.00 and then 1300.00, implying the yellow metal has a lot of wood to chop from a technical standpoint. Support is nearby at the 1274.30 level as mentioned above followed by 1270.00 with a break of this level implying a possible move to 1259.00.

To know our latest recommendation or crude oil tips and gold tips along with stop loss and target price visit www.mmfsolutions.sg

Crude Oil tips, gold tips, crude oil signals,  gold signals, commodity tips, Commodity recommendations .....

GOLD UP-TREND KEPT MOVING

Key Points:

- Gold technical strategy: Long-term mixed, Intermediate-term bullish, short-term mixed.

- Gold prices continued in a bullish manner until resistance showed around the prior April-high.

Gold prices were relatively overbought at the time, and with RSI on the hourly chart already having shown a case of divergence, traders would likely want to wait before pressing the bullish approach.

But the up-trend just kept moving until, eventually, price action encountered the prior April-high, at which point bears began to take over. This totals over $80 of gains for Gold prices from the ‘Comey low’, which printed just as news that former FBI Director James Comey was fired, around market close on May 9th. Perhaps more interesting than just the raw movement is the speed with which an aggressive down-trend turned into an aggressive up-trend with a minimum of congestion or gyration near the lows. This was a clean reversal, as if a light switch were flipped to turn the trend from bear to bull in the blink of an eye (or a news report).

But as prices continued to run-higher yesterday, resistance began to show off of the April high around $1,295. Also in this area is a projected trend-line from the previous bullish move in mid-April; the projection of which runs into current resistance.

Collectively, the past six weeks of price action in Gold have produced a V-shaped reversal, with the Comey low serving as the fulcrum point of the reversal; with price action running into a potential double-top formation off of the April-high.

After Mr. Comey’s opening statement was released ahead of tomorrow’s testimony, Gold was offered lower off of that resistance at $1,295, and so far we’ve seen price action follow-thru. However, to confirm that a double top is, in fact, in place, we need to first make sure that what we’re seeing is a near-term top. Traders would likely want to let bears punch through the prior swing-low at $1,277 to prove bearish continuation potential of this recent move off of resistance, at which point the door will be opened for bearish continuation strategies.

Current Gold Status:

Currently, Gold is trading at 1,284.50, down -0.21%, having posted a daily high at 1,287.55 and low at 1,283.73.

To know our latest recommendation or gold trading signals along with stop loss and target price visitwww.mmfsolutions.sg

Gold tips, gold trading tips, gold trading signals, gold signals, gold trading picks, commodity tips, gold trading recommendations .....

GOLD APPEARS 7-MONTH HIGH

Gold prices retreated from the 7-month high of $1296 in Asia in what appears to be a chart driven move. The metal was last seen trading around $ 1292/Oz levels. 

Bearish RSI divergence on intraday charts

The hourly chart confirmed a bullish price RSI divergence during the overnight trade. The 4-hour RSI is overbought as well. The overbought conditions on smaller time frames could be behind the pullback in the yellow metal from a 7 - month high of $1296. 

Low bond yields, geopolitical risks support gold

Euro zone government bond yields hit multi-week lows on Tuesday. German Bund yields fell to their lowest level in nearly six weeks at 0.262%. The US 10-year yield hit a fresh 7-month low of 2.13%.  The drop in the yields is usually positive for gold. 

Meanwhile, geopolitical risks - diplomatic rift between Qatar and several Arab states, including Saudi Arabia and former FBI chief James Comey's testimony before the US Congress on Thursday - and UK election uncertainty could keep the metal well bid. 

Gold Technical Levels

A daily close above $1300 (zero figure) would open up upside towards $1321.50 (Apr 2013 low) and $1337.34 (Nov 2016 high). On the downside, breach of support at $1279.58 (previous day's low) would expose $1269.50 (May 26 high) and $1259.24 (June 2 low).

To know our latest recommendation or gold signals along with stop loss and target price visitwww.mmfsolutions.sg

Gold tips, gold trading tips, gold trading signals, gold signals, gold trading picks, commodity tips, gold trading recommendations .....

OIL MARKET INVENTORY DECLINE HAS BEEN SLOW

Oil market inventory decline has been slow, but is set to accelerate in 3Q as Shale oil is recovering fast, but still see risks of a longer-term supply crunch with the lack of new projects elsewhere.

Key Considerations:

“Updating price assumptions: We continue to believe current crude prices are unsustainable, and have concerns over the lack of conventional non-OPEC supply beyond the next couple of years. 

However, the weakness in recent prices coupled with the scale of growth in US activity has prompted us to update our crude price assumptions for the first time since January 2016. Our new assumptions are for average Brent prices of USD56/b in 2017 (vs USD60/b), rising to USD65/b in 2018 and USD70/b in 2019, vs our previous expectation of a return to USD75/b by 2018.”

“Look for bigger inventory declines in 2H: So far in 2017, despite good supply restraint from OPEC, evidence of a tightening market has been scant. Inventories have fallen more in harder-to-track areas such as floating storage, and the  high-profile US data has not yet shown a decisive downwards trend. Global demand seasonality is set to add roughly 1.5mbd in 2H17 vs 1H17, while OPEC has now resolved to maintain its cuts through to end-1Q18. In combination, we think this points to a market tightening of c.0.8mbd in 2H, which could remove a material proportion of the global inventory excess by end-year.”

“2018-19 – balanced, with little spare capacity: If OPEC unwinds its cuts in 2Q18, the market looks broadly balanced, with demand growth offset by more OPEC supply, growth in US tight oil and the last of the conventional non-OPEC supply growth from the last spending peak. However, this does not necessarily mean a weak market. At that point, we believe OPEC spare capacity would be extremely limited apart from a potential recovery in supply from the likes of Libya and Nigeria, leaving the global system highly vulnerable to any other unexpected events.”

“Longer term – a tale of two cycles: OPEC’s late-2014 strategy was aimed at allowing prices to fall low enough to re-set global investment and push out higher cost output. The pace of the recovery in US short-cycle shale activity suggests that in that area at least, the impact of OPEC’s actions has been only temporary. The impact on the rest of non-OPEC supply could ultimately be more significant and longer-lasting, from a combination of mature field declines and a dramatic fall in new project sanctions. These effects will take some while to have an impact on global supply/demand balances due to the long-cycle nature of most major projects, but we expect a significant market tightening – and higher prices – towards the end of the decade.”

To know our latest recommendation or crude oil trading tips along with stop loss and target price visit www.mmfsolutions.sg

Crude Oil tips, crude oil trading tips, crude oil signals, crude oil trading signals, commodity tips, Commodity recommendations .....

BIGGER OIL PRODUCTION CUTS TO CONSIDER IN JULY

Oil markets were subdued on Monday, with Brent struggling to maintain US$50 per barrel as efforts led by Opec to tighten the market were undermined by persistently rising US production.

Brent crude oil futures briefly rose above US$50 per barrel in early trading, but had dipped back to US$49.94 by 0040 GMT.

US West Texas Intermediate futures were at US$47.69 a barrel, weighed down by ongoing climbs in US production.

Investors continue to doubt the ability of Opec to rebalance the oil market, with crude oil prices remaining under pressure amid further signs of rising US oil production.

Saudi's OilMin

The OPEC’s monitoring committee meets in Russia in July

Key Considerations:

Further cuts to oil production output could be needed

OPEC and producers would assess the situation in July

"We have to see the market and it is considered that by the end of June, in July we will see that the action they have taken has a big impact

"If for some reason they need to do more, they will consider doing more including ... bigger cuts."

"Nothing is off the table but today nothing is on the table either.

Current Crude Oil Status:

Currently, Crude Oil is trading at 48.12, up +0.97%, having posted a daily high at 48.12 and low at 47.66.

To know our latest recommendation or crude oil trading tips along with stop loss and target price visit www.mmfsolutions.sg

Crude Oil tips, crude oil trading tips, crude oil signals, crude oil trading signals, commodity tips, Commodity recommendations .....

WTI SOLD OFF, SUFFERING THE OPEC MEETINGS

WTI has been suffering the OPEC meetings of late and subsequent announcements in a typical buy the rumour sell the fact speculative trade. 

The U.S. Energy Information Administration reported today that domestic crude supplies fell by 6.4 million barrels for the week ended May 26. Inventories have now fallen each week for about two months. This was not as big as a result as yesterday's with the American Petroleum Institute reported that crude supplies fell 8.7 million barrels last week, while sme expectations were a fall of just 3.2 million barrels.

The dollar has also been volatile and there has been a direct correlation at times as can be expected. For today, oil prices climbed initially on the back of the U.S. government data that revealed supplies of crude oil have now fallen for eight weeks in a row. However, the last hourly stick took the price down below the $48 handle again (a key support level) after highs of $48.94 spot and bears eye the next key technical support at $47.80.  

The DXY continues to weigh on the price of oil today, holding above the psychological 97 handle with highs of 97.32 for the day so far, up +0.30%. However, stocks are performing strongly t the moment which should offer some stability to risk in general and to oil. 

To know our latest recommendation or crude oil tips along with stop loss and target price visit www.mmfsolutions.sg

Crude Oil tips, crude oil trading tips, crude oil signals, crude oil trading signals, commodity tips, Commodity recommendations .....

GOLD PRICES RETREATED FROM THE 5-WEEK HIGH

Gold prices retreated from the 5-week high of $1274.09 as the dollar sell-off came to a halt near critical support, although the subsequent recovery has been anything but encouraging.

The USD bears ran out of steam as the Dollar Index (DXY) closed-in on the critical support level of 96.80. Consequently, the yellow metal failed to hold on to the 5-week high of $1274.09 levels.

Eyes US ISM manufacturing data

The traders would want to see if the manufacturing sector added jobs in April. Moreover, the ISM non-manufacturing employment sub index, which is a more reliable advance indicator of job growth, will be released next week.

A strong ISM manufacturing employment sub index would help dollar index post a sharp rebound from the support of 96.80.

Rate hike odds at 91.2%

The US dollar may regain bid tone as we near the June Fed rate decision, given the 25 basis point rate hike looks pretty much a done deal. Thus, in a bigger scheme of things, gold may find it difficult to revisit $1300 levels ahead of the June Fed.

Gold Levels To Consider

The metal was last seen trading around $1268/Oz levels. A break above $1274.09 (previous day’s high) would open doors for $1288.32 (Apr 21 high) and $1295 (Apr 17 high). On the downside, break below $1266.58 (5-DMA) could yield a pullback to $$1261 (10-DMA) and $1256.82 (50-DMA).

Take note of the bullish crossover between 100-DMA and 200-DMA. The daily RSI is flat lined above 50.00 levels, while the MACD bars are no longer gaining altitude, signaling loss of bullish momentum.

To know our latest recommendation or gold trading signals along with stop loss and target price visit www.mmfsolutions.sg

Gold tips, gold trading tips, gold trading signals, gold signals, gold trading picks, commodity tips, gold trading recommendations .....