The inability to continue rallying higher after reaching multi-year high is questioning the value-investing in precious metal as it is failing to attract more buyers after major central banks of New Zealand and Australia restricted themselves from cutting rates further with an adaptation of ‘Keep an eye’ approach and peace proposal from China to continue to import agricultural goods from U.S. after the greenback government will hinge for easing export restrictions on giant Chinese telecom Huawei along with delay in tariffs round to be implemented from October.
The seven-day negative closing spell in MCX Gold was the ‘talk of the town’ this week as the trade talks between Sino-U.S. are easing after the two largest economies are expected to close a trade deal in October. Better than expected Job openings data, Core CPI numbers and Retail sales also hammered down the precious metal prices. The only circumstance that could make the precious metal again precious would be re-escalation of tariff war.
On daily scale, MCX Gold has witnessed a steep fall after breaching the ‘Rising Channel’ on daily scale that signals for a consolidated positive move followed by a downside move. RSI is closed near 44 levels but expected to find support near 40 levels. DMI’s have been converged with ADX at 36.32 levels. Next week, we are expecting a slippage below 37,500 levels could trigger sellers to a downside of 37,000 levels.
MCX Crude Oil
An upbeat tone was set in the early sessions this week led by conviction from Prince Abdulaziz to not alter the supply of oil production, currently running at 1.2 million barrels per day and extended de-escalation of tariff war between Sino-U.S. after the tentative meet in October to close a permanent deal on tariff stipulations that pushed the prices to 4,231 levels. So, things were going fine, investors were equipped with enough liquidity to channelize in crude oil on take away prices as a bounce back was expected after an attempted rally above 4,175 levels but lesser than expected fall in crude oil inventories reported by Energy Information Administration failed to impress the markets to gain traction but shifted lower.
As per the Energy Information Administration, crude oil inventories fall by 6.912 million barrels from the previous week. The greenback government reported that the U.S. stockpiles now stand at 425.644 million barrels on Sep 06.
MCX Crude oil extended its losses after U.S President Donald Trump eased sanctions on Iran that may lift the supply further. So invitation to more oil in the market which is going to neutralize the OPEC-led-attempt of supply cuts to curb the falling prices has acted as a catalyst to push prices more lower.
On daily scale, the black gold is forming a classic ‘Bearish Megaphone’ pattern that signals for downside after slipping below lower portion that is placed at 3,824 levels. The counter failed to close above 200 days Moving Average. RSI is trading back and forth in a range of 40-60 levels. –DMI is converged above +DMI.