Natural gas sees worst monthly drop in over three years while oil and gold also slide
The outlook on natural gas, Brent crude oil and gold remains bearish in the short-term.
Gold drops for third consecutive week
The price of Spot Gold continues to come off its 200-day simple moving average (SMA) at $1,845 per troy ounce with the May trough at $1,787 remaining in sight.
The price of the precious metal is on track for its third consecutive lower weekly close, having fallen every single day this week. Below $1,787 lies the January low at $1,854.
Minor resistance can be spotted at the April-to-July downtrend line and at Wednesday’s high at $1,833 and further resistance along the 200-day SMA at $1,845. While remaining below it, the price of gold is considered to be bearish.
Brent crude oil heads for third straight weekly decline
Brent crude oil formed a minor top at $116.16 earlier this week before tumbling back towards its March-to-July uptrend line at $105.90 on concerns that a potential recession will decrease demand.
The recent slide in the price of oil has come as OPEC+ on Thursday agreed to stick to its output strategy, increasing production by 648,000 barrels per day in July and August at a time when Saudi Arabia and the UAE are apparently already very close to near-term capacity.
Below the four-month uptrend line at $105.90 sits the June low at $104.92 which represents another potential downside target.
Potential bounces should encounter minor resistance between the 20 June low at $109.76 and the 55-day SMA at $111.69.
Natural gas posts worst month in three years on oversupply worries
Natural gas futures plunged by around 15% on Thursday to a three-month low at $5.37 as the shutdown of the Freeport LNG's liquefied natural gas (LNG) export plant in Texas allowed utilities to stockpile more fuel than expected.
The US Energy Information Administration (EIA) said Thursday that inventory for the week ending June 24 rose by 82 billion cubic feet, sparking fears of an oversupplied market which led to natural gas futures posting their worst month in more than three years.
Thursday’s intraday low was made marginally below a key support area which consists of the November 2021 and January 2022 highs at $5.51 to $5.43 and which may be revisited today but is likely to hold with yesterday’s low at $5.37.
If not, the early March high at $51.89 would be back in the frame. Resistance sits at the 24 June low at $6.06.
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