#trading commodities

[priyashareindia9]

Price Determination in the Commodities Market, Priya Rathod

Welcome to the fascinating world of commodities trading! The commodities market is a dynamic and complex environment that is impacted by a w

Welcome to the fascinating world of commodities trading! The commodities market is a dynamic and complex environment that is impacted by a wide range of factors, such as supply and demand, geopolitical events, and weather patterns. Commodities range from coffee to gold, from soybeans to oil, and everything in between. The process of price determination, which is central to this market, is something that traders, investors, and producers must comprehend to make wise decisions about trading commodities. In this article, we will talk about the Price determination of a commodity. How is the price of a commodity determined? And what factors determine that price?

[gomarkets10-blog]

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[gomarkets01-blog]

Learn About Commodities Trading, Commodity Trading?

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[marketsandyou]

Commodities Weekly Outlook

Gold prices rose to one-week highs on Friday, boosted by the weaker dollar which fell amid persistent fears over prospects for further U.S. interest rate hikes this year.

Gold for August delivery closed up 0.71% at $1,258.31 on the Comex division of the New York Mercantile Exchange, after rising as high as $1,260.00 earlier.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.37% at 96.98 late Friday, posting its largest one day decline in three weeks.

Gold and the dollar typically move in opposite directions, which means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise.

The precious metal is also highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.

Silver gained 1.13%% to $16.69 a troy ounce late Friday. While copper rose 1% to $2.624 a pound, platinum added 0.9% to $929.25 and palladium fell 3.1% to $853.23 an ounce.

Investors will be closely watching remarks this week by Fed Chair Janet Yellen on Tuesday for fresh indications on the timing of further rate hikes and signals on plans to trim the Fed’s balance sheet.

Market watchers will also be awaiting Friday’s euro zone inflation data and speeches by central bank heads at the ECB’s forum on central banking.

[marketservicesaustralia]

COMMODITIES

Gold (1251) If 1249 holds on a closing basis then sideways consolidation within 1249-1280 continues though the same is not our proffered view. Thus we need to keep a close watch on the price action in Dollar Index (97.22) which could give some cue on further Gold direction. 

We will remain bearish while it is trading below 1280 levels and a close below 1249 could open up 1230 levels as well.

Silver (16.86) It is trading below 17 levels, thus a possibility of a sideways movement between 16.50-16.91 levels can’t be ruled out.

Copper (2.57) We were mentioning for last few weeks that 2.44 levels could be an area of strong support for copper, which might open higher levels for the scrip itself. 

Today the commodity is trading above its crucial resistance of 2.55 and a close above 2.62 could open up 2.70 levels as well.

Brent (54.09) and WTI (50.80) had moved higher in line with our short term expectation. Brent is trading above its crucial resistance of 53.50, which could be a positive sign for the bulls, but WTI is still below 51.20 levels. 

If they will manage to hold these levels on a closing basis then we could see 56.20 in Brent and 52.51 in WTI within few trading sessions. 

Brent has to hold 53 levels throughout this week to sustain the bullish momentum. The only concern is the short term overbought condition and the outcome of this week's U.S crude oil inventories.

[marketservicesaustralia]

GOLD

GOLD - The commodity continues to hold on to its downside pressure on correction. On the downside, support comes in at the 1,260.00 level where a break will turn attention to the 1,250.00 level. 

Further down, a cut through here will open the door for a move lower towards the 1,240.00 level. Below here if seen could trigger further downside pressure targeting the 1,230.00 level. 

Conversely, resistance resides at the 1,270.00 level where a break will aim at the 1,280.00 level. A turn above there will expose the 1,290.00 level. Further out, resistance stands at the 1,300.00 level. All in all, GOLD looks to weaken further.

[marketservicesaustralia]

COMMODITIES

Gold (1266) Immediate supports are poised at 1260 and 1239 respectively. Buyers will take every dip as a further opportunity for buying while it is trading above 1239. 1285 could be a level where the price action has to be checked to assess the chances of further bounce to 1305 to 1330 levels.

Silver (17.43) is Oversold on the near-term charts and it is hovering around its crucial resistance at 17.45.A close above that could open up 17.80 levels as well. Immediate support is at 17.02 levels.

Copper (2.57) had failed to close above 2.62 levels. A close below 2.55 could open up 2.48 and 2.45 levels respectively. The bias would remain bearish while it is trading below 2.62-67 levels.

Brent (51.69) and WTI (49.42) have been well supported due to decrease (-3.6M) in U.S crude oil inventory and near term Oversold condition. In a major downtrend like this, the bounces are generally seen as fresh shorting opportunities by the big money with the speculators excited with the fast movement. 

While we have been expecting a bounce from 51.69 to53.80 in Brent and 49.42 to 51.50 in WTI , we prefer to wait for higher levels to create fresh short positions.