The precious metal had been talk of the town last week after tariff war with China and addition of Mexico heated up as all were pointing towards slowdown in the U.S. GDP and developing economies. The thrust of tariff war and expectation of rate cut by Federal Reserve had acted as a catalyst to furnace the precious metal prices making it to hit a high of 33,040 levels. Non-Farm Payrolls data that measures the change in the number of people employed during the prior month, excluding workers in the farming industry were 75,000 much below than Wall Street expectations made the gold more lucrative.
Next Week, we are expecting a continuation of bullish momentum as the precious metal has given a breakout of ‘Rounded Bottom’ pattern, which is a trend following pattern by a ‘Breakaway Gap’, which signals the strength of the buyers in the counter. The yellow metal is expected to find resistance at 33,787 levels. RSI is hinting for more upside showing no signs of divergence and overbought scenario.
MCX Crude Oil
MCX Crude Oil remained flat last week on account of short coverings by market participants pushed the crude prices higher. Major portion of last week remained in the grip of bears as the addition of Mexico in tariff war was enough to turn the sight of market participants from tightening supply of OPEC club to increased risk of lower growth and demand. The vowed of slapping 5% tariffs on all imports from Mexico has further added the downside risks and pressured the oil prices making it to low of 3,523 levels. Energy Information Administration’s reported the Crude oil’s stockpiles improved by 6.771 million barrels that also pressured the crude prices. On Friday, the black gold bounced back after formation of ‘Bullish Divergence on intraday charts.
Next week, we are expecting more volatility to take place in the counter as the black gold has formed ‘Dragonfly Doji’ candle stick pattern on weekly chart, which signals for indecisiveness in the sentiments of the market participants with bullish bias but warns for major rally on either side. A break of 3,522 levels could drag the crude prices to a psychological support of 3,000 levels while a break of 3,788 levels could fade away some clouds of volatility. MACD has given a bearish crossover.
MCX Natural Gas
MCX Natural Gas has remained in the grip of bears last week after breaking its strong support that was placed at 170.78 levels. Energy Information Administration reported that the mean total supply of natural gas remained similar as stated in the previous report week, averaging 94.2 Billions of Cubic Feet/d. Dry natural gas production decreased by 1% compared with the previous report week. The greenback consumption for natural gas rose 4% as their consumption by power sector inclined by 10% while residential and commercial sector’s consumption fall 11%.
Next Week, we are not expecting any bullish reversal or bounce back even though the counter has formed a ‘Bullish Harami’ candle stick pattern on daily scale. The counter is expected to witness more downside once it will trade below 160 levels and find supports near 156.25 and 150.06 levels. RSI is hinting for more downside showing no signs of divergence. MACD has given a bearish crossover.