Brent, natural gas and gold remain bid ahead of FOMC rate decision

​​Gold stays sidelined

Gold continues to trade around its September 2021 $1,722 per troy ounce low ahead of Wednesday’s US Federal Reserve (Fed) interest rate decision with a 75-basis point (bps) rise on the cards.

Following the Bank of Canada’s (BoC) 100bps hike and the European Central Bank’s (ECB) 50bps rise, instead of the widely anticipated 25bps, the Fed may also surprise market participants with a 100bps hike.

For further upside in the price of the precious metal to be seen, a rise and daily chart close above last week’s high at $1,739 would need to ensue, in which case the 8 July high at $1,752 would be in focus. Much further up lies the May trough at $1,786.

Slips should find support around the mid-July low at $1,698 below which lies key support between the August 2021 low at $1,684, last week’s low at $1,681 and the June 2020 and March 2021 lows at $1,678 to $1,671.

In line with several other commodities gold is still trading well below pre-Russian invasion of Ukraine levels as the US dollar has reached multi-decade highs on safe-haven flows.

Natural gas spike falters below $9.53 June peak

Natural gas futures have so far rallied by over 65% from their 5 July three-month low at $5.33 by spiking to Tuesday’s high at $9.43, perilously close to the late May and June highs at $9.43 to $9.53, before snapping back towards its steep one-month uptrend line at $8.54.

The spike in the price of natural gas came as Russia announced it would reduce the flow of gas through the Nord Stream 1 pipeline to 20% from Wednesday onwards.

Above the June peak at $9.53 sits the minor psychological $10 mark. Minor support below the one-month support line at $8.54 can be spotted at the 16 June high at $8.

Brent crude oil range trades around the $100 mark

Brent crude oil continues to be supported by the 200-day simple moving average (SMA) at $96.90 whilst being capped by the June-to-July downtrend line at $103.10 and thus evolves in a tight trading range.

Short-term, the oil price looks bid while it stays above this week’s low and the 200-day SMA at $97.17 to $96.90 but would need to exceed Tuesday’s high at $102.66 to not only retest the downtrend at $103.10 but also reach the more significant $104.42 to $104.92 resistance area which consists of the mid-May and 22 June lows and last week’s high.

Should an intraday bearish reversal take place and a fall through the 200-day SMA at $96.90 occur, the July low at $92.75 would be back in the picture.