2023 Commodities Forecast by Solidecn.com



Cryptocurrencies are on watch as potentially another collapse is brewing on the markets. Concerns are mounting over the financial condition of Silvergate Bank, a bank that specializes in cryptocurrency transactions. Silvergate warned in a filing on Wednesday that recent losses that the bank has experienced may leave it with less capital than it needs. Company also said that it failed to meet the deadline to submit its annual report to the US Securities and Exchange Commission.

Reaction was quick with hedge funds, partners and investors pulling out from the Bank, leading to a collapse in its share price. Cryptocurrency companies, like for example Coinbase, stop accepting and initiating payments to or from Silvergate. However, some companies, like for example BitStamp, warned that they cannot be held responsible for any funds deposited at Silvergate accounts, signaling to clients that they decide to use Silvergate accounts at their own risk.


Whole situation is putting pressure on cryptocurrencies with major coins dropping 3-7% today. Taking a look at the BITCOIN chart at the D1 interval, we can see that the coin is testing a major support zone today. The $22,450 area is marked with previous price reactions as well as the lower limit of a local market geometry. A break below would, at least in theory, hint at a short-term trend reversal. In such a scenario, declines could deepen with sellers targeting the next support zone in-line - $21,200 area marked with previous price reactions and 100-period Exponential Moving Average (green line).​


ETHEREUM price fell over 6.0% on Friday and broke below psychological support at $1600, which coincides with 38.2% Fibonacci retracement of the upward wave started in June 2022. Currently buyers attempt to halt declines around local support at $1550, which is marked with previous price reactions. However, should break lower occur. sell-off may deepen towards recent lows at $1460.



The Fed released its semi-annual monetary policy report today, and next week Powell will testify before Congress. His statement may provide some hints regarding future rate hike path and measures which may be taken during the March meeting. Highlights of the report:

Further hikes are needed
  • Financial conditions have tightened significantly since June
  • Service inflation excluding the housing sector remains elevated, further dynamics will depend on the labor market
  • Bringing inflation back to 2% likely requires period of below-trend growth, some softening of labor market conditions​
  • Inflation abroad remains high, which has an impact on domestic prices​
  • The labor market will remain strong for now​

Today's report did not cause any major market moves, as next week's Powell semiannual testimonies is much more important. EURUSD rebounded slightly and the US100 remains at session highs.​

BTCUSD: probable bankruptcy of Silvergate Bank – the driver of the decline in crypto assets

According to most experts, the pressure on the digital assets sector was exerted by reports of the probable bankruptcy of Silvergate Bank, which actively worked with cryptocurrency firms. Last Friday, representatives of the main company Silvergate Capital Corp. announced the delay in the publication of the annual financial report for the U.S. Securities and Exchange Commission (SEC). It was also stated that the reasons for extending the audit were, in particular, accounting for losses on bonds issued at the beginning of this year. These statements aroused suspicions in the cryptocurrency community that due to a number of negative events in the market, Silvergate's capitalization could have suffered greatly, and the bank is now financially insolvent. Against this background, many digital companies hastened to distance themselves from Silvergate, stating a minimal degree of cooperation or even a break in relations. This was done, for example, by Coinbase, Paxos, Galaxy Digital, Bitstamp, Bakkt, Gemini, Tether and a number of other companies.

New financial problems of a large company associated with the cryptocurrency sector increase investors' distrust of the industry and cause a decline in prices. In addition, monetary factors may exert additional pressure on the market this week. Thus, the head of the US Fed Jerome Powell will address Congress with a semi-annual report on the activities of the regulator, and February employment data will also be published. In the event that they turn out to be strong again, officials get another argument in favor of extending the cycle of interest rate increases.


Technically, the price is trying to resume serious growth, but for this the quotes will need to break above the resistance zone of 23000 - 23500 (Fibo retracement 23.6%, the middle line of the Bollinger Bands, the Murray level [7/8]). In this case, the growth targets will be 25000 (Murray level [8/8]) and 26562.5 (Murray level [+1/8]). The key for the "bears" is the level of 21875 (Murray level [6/8]), with its breakdown, the decline will continue to the level of 20312.5 (the Murray level [5/8]).

Resistance levels: 23500, 25000, 26562.5 | Support levels: 21875, 20312.5​


French CAC40 index is trading 0.4% higher on Monday around fresh all-time high, boosted by gains in luxury stocks such as LVMH (MC.FR) , Kering (KER.FR) and Hermes (RMS.FR) as traders digested fresh comments from ECB chief economist Lane, who pointed out that rates should raise not only in March but also in May. On the data front, S&P Global France Construction PMI dropped to 45.2 in February from 48.4 in January, which was a ninth straight monthly decline of the French construction sector. Upward move is rather limited as markets brace themselves for tomorrow’s highly-anticipated FED Chair Powell's testimony and the February NFP data on Friday.


From a technical point of view, the FRA40 rose over 30.0% from September lows and is currently testing record high at 7400 pts, however hidden bearish divergence appeared on the Momentum indicator, which indicates that the recent upward rally may be losing steam. If sellers manage to regain control, downward impulse may be launched towards support at 6515 pts which coincides with 23.6% Fibonacci retracement of the upward wave launched in March 2020.​


Gold price retested the breached neckline of the inverted head and shoulders’ pattern and keeps its stability above it, to start providing positive trades in attempt to move away from this level that represents key support at 1843.70, to keep the bullish trend scenario valid and active for the upcoming period, which targets testing 1878.80 mainly.


Stochastic shows clear positive signals now, while the EMA50 continues to provide the positive support to the price, to get positive motives that we are waiting to assist to push the price to achieve the waited rise. On the other hand, we should note that breaking 1843.70 followed by 1828.70 levels will stop the expected bullish trend and push the price to return to the correctional bearish track again.​


  • US indices finished yesterday's trading significantly lower following a hawkish testimony from Fed Chair Powell. Powell hinted that Fed is ready to accelerate rate hikes if situation requires it​
  • Some banks and institutions are now seeing chance of Fed hiking rates to 6% and holding them there for a longer period of time​
  • 2y-10y and 2y-30y yield curves are the most inverted in over 4 decades with both spreads exceeding -100 bps​
  • S&P 500 dropped 1.53%, Dow Jones moved 1.72% lower and Nasdaq declined 1.25%. Small-cap Russell 2000 traded 1.11% lower​
  • Indices from Asia-Pacific traded mostly lower today. S&P/ASX 200 dropped 0.8%, Kospi plunged 1.3%, Nifty 50 dipped 0.5% and indices from China traded 0.3-2.3% lower. Nikkei was outperformer and managed to finished 0.5% higher​
  • DAX futures point to a slightly lower opening of the European cash session today​
  • RBA Governor Lowe said that rate hike cycle may be paused at the next meeting if incoming data warrants it​
  • OPEC Secretary General Al Ghais said that Russian oil production remains resilient​
  • According to poll conducted by Reuters, majority of economists surveyed expect Bank of Japan to end yield curve control this year​
  • According to Washington Post, US is preparing to lift Covid-19 travel testing restrictions for arrivals from China​
  • API report pointed to a 3.83 million barrel drop in US oil inventories (exp. -0.5 mb)​
  • Cryptocurrencies are pulling back today. Bitcoin and Dogecoin drop around 0.5% each while Ethereum trades flat​
  • Energy commodities trade higher - oil gains 0.4-0.5% while US natural gas prices climb 0.5%​
  • Precious metals trade mixed - silver drops 0.1%, gold trades flat and platinum adds 0.5%​
  • AUD and USD are the best performing major currencies while JPY and CHF lag the most​


GOLD took a hit yesterday on hawkish Powell testimony and plunged around 2%. Precious metal erased most of the gains made over the previous week and is once again trading near the support zone ranging above $1,800 mark.​


Wall Street indices took a hit yesterday after Powell struck a hawkish note during semi-annual hearings before the Senate Banking Committee. Fed Chair hinted that the pace of rate hikes may accelerate back to 50 basis points if economic developments warrant it. Yields and US dollar caught a bid while S&P 500 plunged 1.53% and moved below the 4,000 pts mark. However, an attempt to climb back above this hurdle can be spotted on the S&P 500 futures market today (US500).

Fed Chair Powell is set to appear on Capitol Hill today for the second day of hearings but as text of the speech will remain unchanged from yesterday, this may not be as big of a volatility event as yesterday. However, traders will be offered ADP employment report for February 2023 today at 1:15 pm GMT and it will be a final hint ahead of Friday's NFP report for February. Market expects ADP report to show a jobs gain of 200k, down from +106k signaled by API for January but also significantly below +517k shown by NFP report for January. A point to note is that US CPI report for February will be released on Tuesday next week and those 2 pieces of data (jobs report and inflation data) are likely to be key for the upcoming FOMC decision (March 22, 2023). Currently money markets price in around 40 basis points of tightening for the meeting and strong jobs report compared with still-high inflation could see those move even closer to 50 basis points.


Taking a look at S&P 500 futures chart (US500) at the H1 interval, we can see that the index took a big hit yesterday following Powell's hearings at Congress. Drop was halted at the 3,985 pts short-term support zone and an attempt to launch a recovery move can be spotted today. Index made an attempt at breaking above the 4,000 pts resistance zone, marked with previous price reactions as well as 200-hour moving average (purple line), but bulls were unable to break above. While the first attempt failed, index remains nearby and another attempt cannot be ruled out, especially if ADP data comes in softer than expected.​


Crude oil price faced strong negative pressure yesterday, as it broke 78.90 level and decline to retest the neckline of the inverted head and shoulders’ pattern that forms solid support at 77.40, noticing that the price leaned on the support line that appears on the chart to start providing positive trades that makes us suggest witnessing bullish bias in the upcoming sessions, targeting testing 78.90 areas initially.


Therefore, the bullish trend will be expected for today, supported by stochastic positivity, and breaching the targeted level will push the price to achieve additional gains that reach 80.40, being aware that breaking 77.40 followed by 77.05 levels will stop the expected rise and press on the price to suffer more losses on the intraday basis.​


he German leading index is facing an important decision.

W1 chart
  • The DAX / DE30 reached a new high for the year this week at 15,718 points. However, the break above resistance at 15,698 points was not sustainable. The index was set back slightly, so that it currently has a small weekly loss.​

D1 chart
  • Today's setback was seen as a buying opportunity - this is shown by the lower shadow. The recovery attempt is not yet convincing. However, the DAX / DE30 can hold at a high level, so that a second test of the above-mentioned hurdle is possible.​


European indices launched today's trading little changed after Fed and US Treasury stepped in to limit contagion risk from SVB collapse. However, issues may not be over as SVB is not the only bank with problems. Signature Bank has been shut down by regulators over the weekend due to systemic risk concerns. Meanwhile, another US bank may be facing collapse - First Republic Bank. This bank is trading 60% lower in US premarket session right now and it has dented moods on the markets following European cash session open.


German DAX slumped around 200 points during the first hour of the cash trading session. Index erased all of the overnight gains, dropped to the lowest level since March 2, 2023 and is now attempting to break below the 15,230 pts support zone at press time.​


Gold price tested 1878.80 level and rebounds bullishly from there now, reinforcing the expectations of continuing the bullish trend for the rest of the day, which targets 1928.60 followed by 1960 levels as next main stations.


Therefore, the positive scenario will remain active for the upcoming period, supported by the EMA50 that carries the price from below, reminding you that holding above 1878.80 represents key condition to achieve the waited targets.​


CPI inflation data from the United States for February was released today at 12:30 pm GMT and came in-line with market expectations. Headline CPI decelerated from 6.4 to 6.0% YoY (exp. 6.0% YoY) while core gauge moved from 5.6 to 5.5% YoY (exp. 5.5% YoY). Reaction of the FX and equity markets was fairly muted - after initial volatile up and down swings, indices moved slightly higher and USD weakened. However, scale of the moves on USD and stock markets is relatively small. Much more action can be seen on the cryptocurrency market with Bitcoin testing $26,000 mark following the release.


Taking a look at BITCOIN chart at D1 interval, we can see that the cryptocurrency is trading higher for the third day in a row and, just as it was the case yesterday and on Sunday, the move is quite big. Bitcoin trades almost 9% higher on the day and makes a break above $26,000 mark for the first time in 9 months! Other cryptocurrencies are also trading higher with Ethereum adding 5% and Dogecoin trading over 4% higher.​


On Tuesday, the market could see a drop in risk aversion

The recent panic in the stock market, which was linked to the problems of the banking sector in the USA, has been halted​
  • The main stock indices from the Old Continent ended the session sharply higher​
  • The DAX gained 1.83%, while the French CAC40 added 1.86% and London's FTSE closed 1.17% higher. Poland's WIG20 ended the session slightly above the benchmark +0.11%​
  • DE30 quotations reached key short-term resistance at 15280 points​
  • Today's CPI inflation data from the US was in line with expectations and showed that prices rose by 0.4% in February after accelerating by 0.5% in January. In contrast, annualised CPI was 6.0% in February, the smallest annual price increase since September 2021. (previously 6.4%). The underlying CPI was also in line with expectations.​
  • Wall Street's major stock indices traded higher. The Nasdaq is up 1.5% at the time of preparing this commentary with the S&P500 and Dow Jones adding 1.05% and 0.45% respectively.​
  • Apple halts bonus payments, Meta Platforms announces job cuts​
  • Tuesday saw massive declines in crude oil. OPEC raised its forecast for crude demand growth in CHINA, but left the forecast unchanged when it came to global demand, explaining this by concerns about global economic growth. OIL.WTI quotes are losing more than 5%, with OIL down 4.5% and falling below the $77 per barrel level.​
  • In the forex market today, we are seeing an outflow into commodity currencies, including the Canadian dollar, the New Zealand dollar and the Australian dollar. The Japanese yen is performing poorly. The EURUSD pair maintains bullish momentum and struggles to break out above the resistance level near 1.0750 on a sustained basis.​
  • Tuesday brought a continuation of the increases in the cryptocurrency market. Bitcoin's quotations broke out with momentum above the USD 25,000 level, which is an important resistance in the medium term. Etherum's price, on the other hand, jumped above $1,750.​
  • At 08:40 pm GMT, we will learn API data on oil stocks, and at 09:20 pm GMT, Bowman from the Fed will speak​


OIL.WTI quotes have overcome an internal trendline, which could herald an attack on the December minimum at $70 per barrel.​


Cryptocurrencies are enjoying another day of strong gains with BITCOIN rallying over-7% and looking towards the $27,000 mark. The most popular coin took out a local high from Tuesday today and reached a fresh 9-month high. While cryptocurrencies performed poorly between mid-February and early-March, the digital asset market took a U-turn this week. Actions of US authorities aimed at stemming contagion risk from collapse of tech- and crypto-related banks, triggered a rally on cryptocurrencies market. Bitcoin is currently trading over 35% above a local low reached as recently as a week ago on March 10, 2023. Solid gains have been all across the cryptocurrency market this week.


A number of cryptocurrencies rallied over-20% over the past week! Taking a look at the BITCOIN chart at D1 interval, we can see that the coin has not only fully recovered from the February 21 - March 10 sell-off but has even jumped noticeably above mid-Friday's peak in the $25,000 area. Coin is closing in on a $27,000 mark. Near-term potential resistance levels to watch are marked with lower and upper limits of a short-term trading range from May and June 2022 at $29,000 and $31,500, respectively.​


Concerns over the condition of the banking sector triggered a sell-off on the global stock markets this week and now investors hope that FED will ease its hawkish rhetoric at a meeting scheduled for next week.. We will get to know what Fed's response is the coming Wednesday at 6:00 pm GMT. However, rate decisions from the Bank of England and Swiss National Bank will also draw attention, and so will flash PMIs for September from Europe and US. Be sure to watch US500, DE30 and GBPCHF next week!


FOMC rate decision is a key event of the week. The market anticipates the Fed will hike rates by just 25 basis points, in light of easing inflationary pressures and the recent banking turmoil. However, some expect that the central bank can reverse course if the financial system is in distress. We will see whether those expectations are met on Wednesday, 6:00 pm GMT and any deviation away from a 25 bp move could potentially trigger additional volatility on the markets. The meeting will also be closely watched as a new set of economic forecasts will be provided.


While central banks will draw the most attention next week, release of flash PMI indices for March may also trigger a jump in volatility. German manufacturing and services indices are expected to rise slightly compared to February releases and weaker-than-expected print could provide some fuel for DE30 bulls. As usual, focus in Europe will be primarily on releases from France (Friday, 8:15 am GMT) and Germany (8:30 am GMT).​


Precious metals gain amid increase in risk-aversion and pullback in US yields

Strong upward move launched on the gold market on March 8, 2023 is continuing at the beginning of a new week. Risk-off moods can be spotted on the financial markets at the beginning of a new week and it is providing support for safe haven assets, like for example gold. UBS will buy troubled Swiss lender, Credit Suisse, in a government-brokered deal. However, this failed to ease market concerns as the deal will include write down of Credit Suisse's AT1 bonds and this may turn out to be a hit to banks and other institutions with exposure to Credit Suisse. Apart from that, Fed and 5 other central banks (ECB, BoJ, BoE, BoC and SNB) will switch from weekly to daily USD swap auctions in order to boost USD liquidity. US yields pulled back providing even more support for precious metals.


As a result of those market moves, gold is trading over 1% higher on the day. Gold price climbed above $2,000 per ounce this morning, reaching the highest level since March 2022.​
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