Below are Outlook on Silver and Natural Gas By Mr. Abhishek Bansal, Founder Chairman, Abans Group
Strength in the Dollar is likely to keep Silver prices under pressure -
Silver prices settled mixed on Tuesday, and are trading with losses today, due to strength in the Dollar Index. Bullion prices are likely to remain under pressure, as President Biden has said that he is open to negotiating his $1.9 trillion pandemic relief package. A lower stimulus is negative for precious metals demand. However, Silver is likely to find support from better-than-expected US economic data.
On Tuesday, the IMF raised its 2021 global growth outlook to 5.5%, from a 5.2% projection in October, citing the rollout of Covid vaccines and more fiscal stimulus.
Silver prices are likely to remain under pressure, on the back of the worsening covid pandemic situation. The overall number of global coronavirus cases has topped 100.03 million, while the deaths have surged to more than 2.14 million, according to the Johns Hopkins University.
Silver prices are likely to face stiff resistance near $26.36. Meanwhile, key support levels are seen around $23.88-$22.18 levels.
NG prices are up while above $2.414 -
Natural gas found support from a change in the weather forecast for the next two-three weeks. The Commodity Weather Group has said that the US West Coast would see below-normal temperatures for the next two weeks, and cold air will descend into the upper Midwest from February 5-9. Also, the Central U.S. and South should be less warm, than previously expected from January 31-February 4.
Increasing gas exports and domestic demand, along with rising electricity production in the US, are providing support to the gas prices. As per Bloomberg data, gas flows to US LNG export terminals on Tuesday rose +24% y/y, to 11.1 bcf, and domestic Natural Gas in the US, on Tuesday, rose +2.0% y/y, to 93.7 bcf. US electricity output in the week ended January 16, rose +6.3% y/y, to 79,427 GWh (gigawatt hours) however, cumulative US electricity output in the 52-week period ending January 16, was down -2.5% y/y, at 3,933,619 GWh.
A drop in production is also supportive of gas prices. As per Bloomberg data, production on Tuesday was down -3.4% y/y, to 90.543 bcf/d.
On the inventory front, US Natural Gas inventories, as per an EIA report, for the week of January 15, fell -187 bcf, to a 7-month low of 3,009 bcf, against market expectations of -169 bcf. However, Natural Gas Inventories are up +2.1% y/y and are +7.0% above the 5-year average.
Natural gas February month expiry contract prices are likely to find support at $ 2.41, while key resistance is seen around $2.93-$3.06 levels.
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