​Gold and natural gas prices rise while oil drops

​​Gold attempting to break through the April-to-July downtrend line

Gold is rallying for its fifth straight session whilst trying to overcome the four-month downtrend line at $1,770 per troy ounce, as a negative US growth domestic product (GDP) data last week pushed the US economy into a technical recession, led the US dollar to slide and prompted markets to scale back hawkish expectations from the Federal Reserve (Fed).

Last week’s data showed that the US economy contracted for a second straight quarter, the definition of a technical recession, raising expectations that the Fed may need to slow down the pace of interest rate hikes.

Despite the current rally, gold prices declined for a fourth straight month in July and by over 15% from their March peak, due to an appreciating dollar and rising US bond yields.

The May low at $1,786 may be reached next but together with the mid-June low at $1,807 is likely to act as resistance.

Minor support is to be seen between the 8 and 13 July highs at $1,752 to $1,745.

Natural gas futures recover from Monday’s low

The sell-ff in natural gas futures from last Tuesday’s high at $9.41, made close to the late May and June highs at $9.43 to $9.53 on the back of Gazprom reducing the flow of gas through the Nord Stream 1 pipeline to 20% in late July, seems to have ended at Tuesday’s $7.76 low below which meanders the 55-day simple moving average (SMA) at $7.59.

Another up leg may be in the making with last Wednesday’s low at $8.35 and the $8.50 region representing possible upside targets for this week.

Brent crude oil slips further on darkening outlook

Brent crude oil has tumbled as weak manufacturing data in Japan, Europe and the US highlighted the darkening global economic outlook.

The ISM manufacturing PMI softened in July, weighed down by declining output and new orders in Japanese and European markets with month-on-month construction spending coming in at a worse than expected -1.1% versus a forecast of 0.3% and a revised June figure of 0.1%.

On the supply side, traders await the OPEC+ meeting on Wednesday with the organisation expected to stick to its policy of modest supply increases, keeping global supply tight.

Since last Friday’s $106.36 high the price of Brent slid by around 7%, so far to $98.20, before trading back around the minor psychological $100 mark.

Below $98.20, Monday’s low and the 200-day SMA can be spotted at $97.24 to $97.17. Failure there would leave the door open for the July trough at $92.75 to be revisited.

Minor resistance comes in at the 28 July low at $100.94 and also at the 29 July low at $101.54.