Gold, oil and natural gas prices look fragile after Tuesday’s sharp sell-offs
The outlook on gold, oil and natural gas remains fragile after Tuesday’s US dollar-induced sharp falls.
Gold targets December low after US dollar-induced sell-off
On Tuesday gold dropped out of its last couple of months’ trading range by slipping through the May and early July lows at $1,787 to $1,785 to a seven-month low on recession fears and US dollar flight-to-safety strength with investors selling commodities across the board, even gold.
The October and December 2021 lows at $1,754 to $1,746 are thus in focus, a slide through which would engage the September low at $1,722.
Minor resistance, which previously acted as support, can now be seen at $1,785 to $1,787 with further minor resistance being spotted at the $1,806 mid-June low.
WTI remains fragile after Tuesday’s 9% drop
West Texas Intermediate (WTI) crude oil’s around 9% slide from its $109.65 Tuesday high took it close to its $95.12 late April low as recession fears and thus lower demand provoked the sharp sell-off to below the minor psychological $100 per barrel mark.
The fall through and daily chart close below the three-month uptrend line and June low put the late April low at $95.12 on the map, a drop below which would eye the mid-March and April key support zone as well as the 200-day simple moving average (SMA) at $92.69 to $92.45.
Since previous support creates resistance, because of inverse polarity, this can now be found between the June low and breached uptrend line at $101.22 to $102.90 as well as at the $103.39 1 July low.
Natural gas recovers to its 200-day SMA after slide
Natural gas futures plunged by another 5% on Tuesday, following last Thursday’s sharp 15% fall to marginally below last week’s $5.37 low, as concerns about a potential recession rattled commodity markets and pushed these down to $5.33 before recovering later in the day on bargain hunting.
The 200-day SMA at $5.65, around which it held on Monday, is currently acting as resistance with further resistance coming in at the past three days’ highs at $5.86 to $5.94 as well as at the 24 June low at $6.06.
Key support remains to be seen between the November 2021 and January 2022 highs at $5.51 to $5.43 and last as well as this week’s lows at $5.37 to $5.33.
If slipped through, the early March high at $5.19 would be next in line.
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