Gold has been trading upside as I expected and I see potential for the further upside continuation towards the upside references.    Due to the mid-long term upside trend and the short-term upside momentum, I see potential for the further growth towards the upside reference. Upside objectives are set at the price of $2.047 and $2.078 MACD oscillator is showing bull reading, which is good sign for the upside continuation. Key support is set at the price of $1.935

Are you worried about the current state of the economy? Do you find yourself constantly checking financial news for updates on market fluctuations? In times of economic uncertainty, it's natural to want to protect your investments. One way to do so is by investing in safe-haven assets that can withstand turbulent markets and provide stability during uncertain times. And when it comes to safe-haven investments, gold reigns supreme! In this blog post, we'll explore why gold is a go-to investment for those seeking security amidst global economic instability.   Image Source: https://unsplash.com/photos/iYsrkq5qq0Q   What is economic uncertainty? Economic uncertainty refers to a situation where the future state of the economy is uncertain or unpredictable. It often arises due to various factors such as political instability, market volatility, trade wars, natural disasters, and pandemics. When investors are unsure about how these external factors might impact the economy in the short or long term, there can be a significant decline in confidence which leads to volatile markets. During times of economic uncertainty, people tend to become more cautious with their investments and financial decisions. They may hold onto cash rather than invest it in riskier assets like stocks or property that could be impacted by an economic downturn. For example, buying gold bullion or bonds can be a safer option during such periods. Plus, investors may also be more hesitant to take on debt or increase spending as a result of the uncertainty surrounding the future of the economy.     What are safe haven investments? One key characteristic of safe haven investments is their ability to hold their value or appreciate in times of crisis. Examples include gold, silver, government bonds, and cash. These assets have historically been seen as reliable stores of wealth because they are not tied to the performance of other markets such as stocks or real estate. Another feature that makes these assets attractive is their low correlation with other traditional investment options. This means that even if the stock market experiences a sharp decline, safe havens like gold can continue to rise in price.     Why is gold a safe haven investment? Gold has been considered a safe haven investment for centuries. This precious metal is known to retain its value, even during times of economic uncertainty. Gold's scarcity and durability make it an attractive option for investors who want to protect their wealth. Gold also has the advantage of being a universal currency. It is accepted around the world as a form of payment and retains its purchasing power across borders. As such, gold investments can offer protection against inflation or depreciation in other currencies. Another reason why gold is considered a safe haven investment is because it has a low correlation with other asset classes like stocks and bonds. This means that when other assets suffer losses due to market volatility, gold may remain stable or even appreciate in value.   Image Source: https://unsplash.com/photos/yoWkkoUbG4E     Economic uncertainty can be daunting for investors who are worried about the safety of their investments. Safe haven investments provide a sense of security during times of economic instability and gold has been proven to be one of the most reliable safe havens throughout history. Not only does gold have intrinsic value, but it is also immune to geopolitical tensions and currency fluctuations. Its ability to retain its value over long periods despite market volatility makes it an essential asset in any diversified portfolio.

Oil once again needs to confirm its uptrend   WTI remains within the upward trend formed in early May. However, be prepared for another test of this trend support at $71 and a possible move lower.   The current upward trend in oil has been shaped by signs that the economy continues to outperform expectations, showing resilience despite tighter financial conditions.   On the side of oil buyers, there was a wide range of factors, from increased demand for risky assets to signals from the US president's administration that the strategic fuel reserve would soon begin to be replenished.     Despite all that, in the middle of last week, the rise in the price of a barrel of WTI stalled in the territory above $74.20. The local peak almost coincided with the 50-day moving average. In early May, we have already seen how aggressively the bears defend this trend indicator.    Last Thursday's sell-off brought oil back to test support again, allowing only a slight retracement of the previous local highs.   Among the fundamentals, oil traders should consider the start of the US holiday season, which is already evident in the methodical decline in gasoline inventories over the past three weeks. In addition, commercial crude stocks have fallen by 12.4 million barrels. Crude oil stocks are now 8.4% higher than in the same week a year earlier, but they were above 16% in February. At the same time, an additional 1.6m barrels were sold from the strategic reserve.     Moreover, Friday's data from Baker Hughes showed a new fall in the number of drilling rigs in the USA: from 575 to 570 and Crude plus Gas count from 720 to 711. Thus, producers are still not interested in ramping up production. The answer to this indifference on the part of oil producers is most likely to be found in unfavourable financial conditions due to high-interest rates and the promotion of a green agenda.   Short-term, oil is under pressure from reports that Russia is successfully selling its diesel to Saudi Arabia, and the latter is exporting it to Europe. Meanwhile, offshore oil exports from Russia continue to rise. Saudi Arabia has also joined the IEA in noting that Russia has not cut production by 500,000 BPD, as promised earlier in the spring.   Local negative factors can send oil to a new test of trend support, which is now near $71. A fall below that would be significant evidence of a victory for the bears, potentially triggering a downside momentum towards $68 or even $65.   If oil gets another bout of downside support, it could be followed by a rally to $74.60-75.0.  

Copper plummeted below the key $8,000/t mark as hopes for higher demand in China are dimming. The red metal has now lost all of the gains it made this year. We believe there are more downside risks in the near term Workers on a copper foil production line in Jiangxi Province Copper price gives back 2023 gains Source: LME, ING Research Copper drops below key $8,000/t level The LME copper price has dropped by around 11% this quarter and is now trading near its lowest level since November. The red metal is now back to where it was before China ended Covid-19 restrictions. Copper was one the biggest winners following China’s reopening amid expectations that China’s support for the property market will kickstart demand for industrial metals. The red metal climbed to a seven-month high in January after the end of Covid lockdowns in China, but it has now given back all of its gains. The LME copper price fell from year-to-date high of $9,550.50/t in January to recently trade at a low of $7,944/t on weaker-than-expected China demand, in what is normally a peak construction season, and subdued demand in the US and Europe, with interest rises weighing on economic growth. Copper is also weighed down by a strengthening US dollar, which makes copper more expensive for Chinese buyers. Meanwhile, speculators have been decreasing their bullish LME copper bets – the net-long position is now the least bullish in more than 19 weeks at 38,416, as weekly exchange data on futures and options show.   Net bullish LME bets are at a 19-week low Source: LME, ING Research China rebound hopes fade Hope for higher demand from China has now faded with recent disappointing data showing a mixed picture for the world’s biggest consumer of copper. Although China last month reported annual quarterly GDP growth of 4.5%, ahead of expectations – and much faster than the 2.9% for the fourth quarter of 2022 – there are concerns about whether the pace of growth can be sustained. The recovery in China has been mainly driven by consumer spending while the manufacturing sector has continued to lag. Both National Bureau of Statistics (NBS) and Caixin PMIs dropped below 50 in April, with the total new order index falling to 48.8 from 53.6, according to NBS, and the corresponding export index dropping to 47.6 from 50.4. The weaker-than-expected rebound in the property sector, which contributes heavily to demand for copper, has also hit sentiment. China’s home price growth slowed in April, adding to signs that the property recovery is weakening. New-home prices in 70 cities, excluding state-subsidised housing, rose 0.32% last month from March, when they grew 0.44%, NBS data showed. Chinese imports slump as output hits records China’s copper imports slumped in April – China imported 407,294 tonnes of unwrought copper and copper products in April, the lowest since October. The premium paid for refined metal at the port of Yangshan, which acts a measure of import demand, has been on a downtrend too. It recently stood at $30/t, down from its record highs of $152.50/t in October last year. Imports of copper ore and concentrate in April came to 2.103 million tonnes, up 11.7% on a year ago, driven by higher record domestic production of refined metal. In April, China copper output rose 14.1% year-on-year to 1.059 million tonnes. LME stocks continue to rise LME warehouse inventories of copper have almost doubled in the past month, a sign that supplies are outstripping demand from end users, pressuring the price lower. Stocks of copper in LME warehouses have risen by more than 85% since the middle of April to 96,675 tonnes. Copper stocks have been steadily increasing in LME warehouses for the past few weeks and they now stand at the highest level since October last year. China has now also overtaken Russia as the largest source of copper stored in the LME warehouses. Chinese-origin copper rose to 26,675 tonnes in April, from 15,575 tonnes in March, according to data from the exchange. China is usually a net importer of copper. Rising Chinese origin copper stockpiles suggest Chinese smelters have been selling more metal outside China as domestic demand in the country remains weak. LME stocks nearly double since mid-April Source: LME, ING Research Copper sinks lower into contango Rising copper stocks created a discount for the cash over the three-month contract of $66/t. The spread is in its widest contango in data going back to 1994. Contango, a bearish market structure, is pointing out to healthy spot supply and could indicate prices have a bit further to go on their way down. We remain cautious on the first half of the year outlook for copper, with sluggish demand from China pointing to lower prices. In the near term, copper prices are likely to continue to be dictated by the pace of China’s economic recovery as well as the Fed’s interest rate hiking path. We expect copper prices to remain volatile as the market will continue to react to any policy change from China. We expect prices to average $8,970/t in 2023. In the longer term, copper’s fundamentals as an EV and green energy metal will support higher prices over the next few years, but for now, the market will remain focused on the disappointing demand picture from China.   Copper is in widest contango since the early 1990s Source: LME, ING Research Read this article on THINK Tags Copper prices China and copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil has managed to hold up relatively well, despite little progress in US debt ceiling talks as well as some more hawkish comments from US Fed officials A US debt ceiling deal inches closer as talks continue Energy - oil edges higher The oil market managed to edge higher yesterday despite there still being little progress in US debt ceiling talks as well as some hawkish comments from Fed officials. A couple of officials suggested that the Fed may still have to hike rates further. Obviously, the more the Fed increases rates, the more likely we are to see a hard landing, which would hit oil demand hard.  For now, we are assuming that 2023 US oil demand will be largely flat year-on-year. Despite the move higher yesterday, sentiment still remains mostly negative in the oil market and this is evident in positioning data which shows that speculators have reduced their net long in ICE Brent significantly in recent weeks. Positioning data shows that there is still a sizeable gross short in ICE Brent, however, these shorts will want to be careful as we approach the next OPEC+ meeting, which is scheduled for 4 June. OPEC+ have surprised the market a couple of times recently, so market participants may be reluctant to carry too much risk into this meeting. The 650Mbbls/d Dangote oil refinery in Nigeria has finally opened after years of delays. While the refiner has said it will start shipping refined products by July or August, it is still unclear how quickly it will be able to ramp up operations. According to reports, there has been little in the way of commercial activity from the refiner, which suggests that any meaningful volumes coming out of the refinery will still be several months away at least. The refinery will be important for both crude and product trade flows when fully operating, potentially meaning reduced crude exports as well as reduced imports of refined products. Metals – Global aluminium output remains flat The latest numbers from the International Aluminium Association (IAI) show that daily global primary aluminium output stood at 187.6kt in April, compared to 187.5kt a month earlier. Total monthly output for the metal remained almost flat year-on-year at 5.63mt in April, although it was down 3.2% MoM.  Cumulative aluminium production over the first four months of the year rose 2% YoY to 22.6mt. Chinese output is estimated to have fallen 3.2% MoM, while remaining flat YoY at 3.3mt in April. Although YTD production is still up 3.3% to 13.3mt.  Production in Western and Central Europe is still under pressure, falling 2.6% MoM and 8.2% YoY to 262kt in April. Read next: Asia Morning Bites - 23.05.2023| FXMAG.COM Agriculture – ISO expects global sugar surplus to shrink In its latest report, the International Sugar Organization (ISO) expects the global sugar surplus to fall to 852kt in 2022/23, down about 79% from its previous estimate. Total sugar output projections were trimmed to 177.4mt for 2022/23, compared to a previous estimate of 180.4mt, due to lower output from the EU, India and Thailand. In contrast, the group expects global consumption to increase to 176.5mt in 2022/23, up by 233kt from its previous estimate. The latest reports from the Joint Coordination Centre showed that Ukraine’s exports under the Black Sea Grain Initiative stood at 118.3kt for the week ending 21 May, down 78% WoW. While the deal has been extended for two months, no inbound vessels were cleared in that week which led to a significant drop in volumes. However, considering the recent extension, we may see a revival in Ukrainian exports in the weeks ahead. The USDA’s weekly export inspection data for the week ending 18 May show that US corn and wheat shipments rose while soybean exports eased over the last week. US weekly inspections of corn for export stood at 1,323.1kt, up from 1,173.8kt in the previous week but lower than the 1,752.5kt reported a year ago. For wheat, export inspections stood at 407.7kt, up from 263.4kt last week and 275.5kt seen for the same period last year. Soybean export inspections stood at 155.1kt, lower than 186.8kt from a week ago and 582.3kt from a year ago. The USDA’s latest crop progress report continues to show that US corn plantings are progressing well with 81% of plantings completed, this is up from 69% at the same stage last year and also above the 5-year average of 75%. Similarly, soybean plantings are advancing quickly with 66% planted as of 21 May, well above the 47% seen at the same stage last year and also above the 5-year average of 52%. Meanwhile, spring wheat plantings are 64% complete, which is above the 48% planted at the same stage last season, but still below the 5-year average of 73% for this time of year. Read this article on THINK Tags USDA Sugar Refined product Grains Federal Reseve Debt ceiling Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The latest positioning data shows that speculators remain bearish towards the oil market. Meanwhile, US producers continue to reduce drilling activity Source: iStockphoto Energy - Specs continue to cut Oil managed its first week of gains since mid-April. ICE Brent settled 1.9% higher over the last week, which has left it trading above US$75/bbl. Despite this, speculators remain negative towards the market with the net speculative long in ICE Brent falling by 6,020 lots over the last reporting week to 106,722 lots as of last Tuesday. This is the smallest position that speculators have held this year. Looking deeper into the data reveals that the move was driven by longs liquidating, while the gross short position is fairly sizeable at 94,880 lots. Meanwhile, ICE gasoil continued to see further short covering over the last week. Speculators bought back 7,059 lots over the last reporting week to leave them with a net short of 20,652 lots. This still leaves speculators holding a large net short in gasoil, which suggests that there is still the risk of a short covering rally. Drilling activity in the US continues to slow. The latest data from Baker Hughes shows that the oil rig count fell by 11 over the last week to 575. This is the lowest count since June 2022 and the rig count has now fallen by 48 from a YTD peak of 623 seen back in January. A slowdown in US drilling activity is a concern for the oil market, which is expected to see a sizeable deficit over the second half of this year. Producers appear to be responding to the weaker price environment, rather than expectations for a tighter market later in the year. The macro picture is also likely making producers a little more hesitant. However, the trend will be good news for OPEC+, as it suggests that they will be able to continue supporting prices without the risk of losing market share to US producers. Metals - China metal output rises Recent data from the Shanghai Futures Exchange (ShFE) shows that weekly inventories for all base metals declined over the last week. Copper weekly stocks fell by 15,872 tonnes to 102,511 tonnes as of Friday. Among other metals, weekly exchange inventories for nickel fell sharply by 48% WoW to a fresh low of 908 tonnes, while aluminium inventories fell 9% WoW, and zinc and lead stocks fell 7.6% and 20.2% WoW respectively as of Friday. The recent numbers from the National Bureau of Statistics (NBS) show that refined copper output in China rose 14% YoY to 1.06mt in April, while zinc and lead output rose 13% YoY to 594kt and 4% YoY to 614kt respectively. The latest trade data from China Customs show that imports of unwrought aluminium and products rose 27% YoY to 223kt in April. This leaves cumulative imports over the first four months of the year at 797.6kt, up 12.6% YoY. On the export side, alumina exports jumped 56.4% YoY to 70kt last month, while YTD exports have risen by 100% YoY to 380kt. This increase is driven largely by stronger flows to Russia. Agriculture – China's corn imports fall The latest trade numbers from China Customs show that corn imports declined significantly by 54.6% YoY to 1.0mt last month, which leaves cumulative imports so far this year at 8.5mt, down 8.4% YoY. While corn imports came under pressure, wheat imports surged 141% YoY to 1.68mt in April, which takes cumulative imports over the first four months of the year to 6.03mt, up 61% YoY. Read next: FX Daily: This could be another good week for the dollar| FXMAG.COM The latest CFTC data shows that money managers reduced their net bearish bets in CBOT corn by 17,658 lots over the last week to 91,985 lots as of 16 May. The move was predominantly driven by an increase in gross longs. Similarly, the speculative net short position in CBOT wheat decreased by 4,137 lots to 112,769 lots over the last reporting week. However, the pressure seen on prices since the reporting week, due to an extension in the Black Sea grain deal, suggests that speculators have likely increased their net shorts in both corn and wheat more recently. Read this article on THINK Tags Speculators Rigs Oil Metals Grains China trade Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Are we seeing some bullish momentum in crude prices? Oil prices are rebounding again today alongside a slight uptick in market sentiment more broadly. Perhaps some of the confidence in Washington that a deal on the debt ceiling isn’t far away, amid “steady progress”, is filtering through to the markets, although default was almost certainly never a realistic possibility in the first place. Crude has gathered a little upward momentum over the last week or so, with prices making higher lows on the way which could be a bullish signal short term. Brent has continued to see resistance around $77-$78 though but a break of this, taking it back into December to March territory, would be encouraging, with $80 then being the next big test. Gold heading for a deeper correction? Gold prices fell again on Thursday but are seeing some support today around a very interesting support level. The yellow metal has been under pressure amid rising US yields and a stronger dollar and now it’s pulled back to $1,960, a big support zone in the second half of March and throughout April, as well as a big resistance point in early February. Read next: US GDP: The GDP number covers an odd quarter which was deceivingly strong over the first couple of months due to weather distortions| FXMAG.COM A significant break below here could be a very bearish signal in the near term, potentially signalling a much deeper correction is on the cards in the coming weeks. Another level of interest is $1,940, with a break of this further confirming that the tide has turned, with the focus then shifting back towards $1,900. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

The bulk of the commodities complex benefitted from the risk-on move across markets yesterday. However, wheat prices came under pressure with an extension to the Black Sea grain deal Energy - Large US crude build It was a risk-on move across markets yesterday with optimism growing that a deal will be made on the US debt ceiling. This saw ICE Brent close more than 2.7% higher on the day. The oil market continues to be driven by external developments, rather than fundamentals. The market ignored a largely bearish EIA inventory report. US commercial crude oil inventories increased by 5.04MMbbls over the week, which was more than the 3.69MMbbls build reported by the API the previous day and also more than the market was expecting. It is also the largest weekly crude build since mid-February. The changes in refined product stocks were also underwhelming, with gasoline inventories falling by just 1.38MMbbls, whilst distillate stocks increased by 80Mbbls. Demand also disappointed. Implied demand fell by 606Mbbls/d over the week. Declines were seen in gasoline, distillates and jet fuel, although for now, the 4-week average for implied gasoline and jet fuel demand is still above seasonal norms. The 4-week average for implied distillates demand has, however, dipped below the 5-year average for this time of year. Read next: Asia Morning Bites - 18.05.2023| FXMAG.COM The European gas market remains under pressure with prompt TTF falling closer towards EUR30/MWh and this is on the back of growing confidence in a comfortable balance. EU gas storage is a little over 64% full at the moment, well above the 41% seen at the same stage last year and above the 5-year average of 46%. The pressure at the front end of the TTF curve is also starting to put a lot more pressure on 2023/24 winter prices. Up until recently these forwards were holding up relatively well given concern over the balance through the 2023/24 winter. However, more recent changes in the forward curve suggest the market is becoming less concerned about the next heating season. Agriculture - Black Sea grain deal extended The Black Sea grain deal was extended yesterday for an additional 2 months, which will help ease some supply concerns in the market. However, given the short extension, the market will have to continue to deal with uncertainty over what happens next. When the Black Sea Grain Initiative was first implemented, the idea was that the deal would run for 120-day periods. An extension to the deal also does not mean that grains will flow freely. Ukraine has said that flows have slowed significantly due to issues around inspections. However, news of the extension still saw CBOT wheat settling 3.4% lower yesterday. Read this article on THINK Tags Ukraine TTF Oil Natural gas Grains EIA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more