As the stock market saying goes, "the trend is your friend". It indicates that market trends tend to persist according to the so-called momentum strategy. Therefore, let us take a look at the three strongest trends of the past week in the financial markets. We will try to understand the reasons behind these stock market movements in order to explore the possibility of their continuation.
Table of contents:
Silver (XAGUSD)
The break through of the USD 2 000 level in the gold price may have triggered a rally in the silver price. It rose by 5.2% last week, with both bullions showing a long-term high level of dependence on each other. According to data from The Silver Institute, demand for silver in 2023 has fallen by 6% relative to last year, while supply has risen by 2% over the period. The price of an ounce of the metal is currently ahead of key resistance at US$25.
Source: Conotoxia MT5, XAGUSD, Daily
NATGAS (XNGUSD)
It appears that this year's winter may be warmer than previously expected, which is now triggering a continuation of the sell-off in natural gas prices, whose price fell 6.1% last week, facing the previously hard-to-beat US$2.8 level.
Source: Conotoxia MT5, XNGUSD, Daily
According to S&P Global, we are currently at a point of equilibrium between gas production and consumption. The latest forecast from the US Energy Information Administration (EIA) predicts an average price of $3.25/MMBTU for this commodity next year.
Source: S&P Global
Crude oil (XTIUSD)
Oil prices continue to fall, this time by a further 3.7% over the past week, already a 21% loss from this year's peaks. Although OPEC's reports on demand and production figures point to a growing shortage of the commodity, the price falls continue. As early as this Thursday (30.11), OPEC+, the largest oil cartel (responsible for as much as 32.6% of global production), will meet. At this meeting, a decision may be taken to further reduce production, which could be an important factor in reversing the downward trend in crude oil prices.
Source: Conotoxia MT5, XTIUSD, Daily
Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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