CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Crude Oil and Silver Analysis: Key Levels to Watch

Article By: ,  Market Analyst
June 3, 2024 4:10 PM

  • Crude Oil drops to three-month lows
  • Silver rebounds from key 2020 levels
  • U.S ISM Manufacturing Indicator drops lower, ISM Services next in sight

The weekend’s OPEC meeting revealed mixed interests and decisions, reflected in the ranging price action on crude oil charts. Besides the agreement to extend the 2-million-barrel per day supply cut until October, the UAE was granted an increase in production by 300,000 barrels per day to compensate for its significant investments in oil projects. However, concerns arise as agreed quotas were previously breached by Russia and Iraq for war funding and economic support.

Leading Economic growth and activity metrics are in sight

The U.S. ISM Manufacturing PMI dropped further below expansion metrics today towards 48.7, adding concerns to overall demand potential. Next in sight are the ISM Services PMI (Wednesday) and Non-Farm Payroll (Friday) to provide further clarity on the growth outlook of the U.S. economy. These metrics can play a leading role in determining oil demand potential and price trends alongside supply policies and inventory measurements. In terms of Silver, a growth outlook combined with easing inflationary levels would favor its demand for industrial purposes. The latest Core PCE figure traced a decline from 0.3% towards 0.2% last Friday, aligning with potential Fed rate cut decisions.

Technical Analysis

Crude Oil Analysis: Daily Time Frame – Logarithmic Scale 

Crude Oil is trending below 75 for the first time in three months, weighed down by negative fundamental momentum. The sideways expanding range of the month of May finally took a dominant direction after breaking below the 75.50 level. Current prices touched down at the 74.30 low, completing the head and shoulders price target. Breaking below 74, the price track can meet with levels 73.30 and 71 respectively, prior to retesting yearly lows. A rebound from the current low can meet resistance levels near the 76 zone.

Silver Analysis: Daily Time Frame – Logarithmic Scale

After reaching the 50% Fibonacci extension from the 2008 low, 2011 high, and 2020 low, silver retraced to the key 30-29 barrier, marked by a $29.78 low. This level is significant, and a bullish rebound could push prices back to $31.50 and $32.50. On the downside, a break below $29.78 could find support near $28.80 in the short term and $26 in a more extreme scenario.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024