Brent crude oil and gold rally on falling US dollar and US natural gas prices
Outlook on Brent crude oil, gold and US natural gas as US dollar sees steepest 4-day loss since July 2020 amid weaker than expected US ISM manufacturing data.
Brent crude oil probes resistance on OPEC+ supply cut rumours
Brent crude oil’s recovery from its $82.55 September low is grappling with the breached 2-year uptrend line which, because of inverse polarity, now acts as a resistance line as rumours abound that OPEC+ will cut output by more than 1 million barrels per day (bpd) at its meeting in Vienna on Wednesday.
This coupled with a weaker US dollar having witnessed its steepest 4-day loss since July 2020, helped the price of Brent crude oil recover by over 7% from its late September low.
Good resistance sits between the July, August lows and the 21 September high at $91.08 to $92.53. Further up the mid-September high, 55-day simple moving average (SMA) and five-month downtrend line can be spotted at $94.42 to $95.19.
Slips should find support near the early September low at $86.99 with further minor support being found at the 30 September trough at $84.93.
Gold surges to 3-week high
The gold price’s 5% rally off its September 2 ½ year $1,616 per troy ounce low on a rapidly depreciating US dollar has taken it to above its $1,681 to $1,689 resistance zone which entails the July and early September lows.
In doing so it has left its August-to-October downtrend channel and is seen heading towards the 55-day SMA and 12 September high at $1,723 to $1,735. Any short-term retracement is likely to find initial support in the $1,689 to $1,681 zone.
Further down lies Monday’s low at $1,660.
US natural gas futures slip to 2 ½ month low
US natural gas futures dropped around 4% on Monday, hitting a 2 ½ month low as the US ISM Manufacturing PMI unexpectedly fell to 50.9 in September, its lowest growth in factory activity since the 2020 Covid-19 pandemic as companies adjust to potential future lower demand.
On Monday the front month contract slid by over 6% to $6.370 on weak demand, to below the 200-day SMA at $6.623, another daily chart close below which would push the July low at $5.330 back to the fore.
On the way down minor support can be spotted at $5.955, the 12 July low. Resistance above the 200-day SMA comes in between the 27 and 29 September highs at $7.147 to $7.236.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
Live prices on most popular markets
- Forex
- Shares
- Indices
