Gold, US natural gas and oil prices slip on stronger US dollar

​​Gold hit by stronger US dollar

The gold price has taken a hit from a stronger US dollar and revisited its early September low at $1,689 per troy ounce before stabilising.

Gold remains within a technical downtrend, defined by lower highs and lower lows, and trades around 5.5% lower than at its August peak, having last week dropped to $1,689, close to its $1,681 July low, which represents key support. Failure there could trigger a swift sell-off to the March 2021 lows at $1,678 to $1,677 and the 200-week simple moving average (SMA) at $1,674.

Minor resistance sits at Monday’s $1,707 low and more significant resistance at Tuesday’s peak at $1,726. While it isn’t bettered on a daily chart closing basis, the downtrend remains intact.

US natural gas futures dropped out of bed

US natural gas futures dropped around 5% on Tuesday, hitting a four-week low as soaring output coupled with lower demand forecasts dragged prices down.

The front month contract slid to $7.85 on Tuesday, close to the 55-day SMA at $7.83, a slip through which would push the August low at $7.54 back to the fore.

The sharp drop in the price of natural gas occurred despite the fact that inventories are 11% lower than their five-year norm.

Resistance now sits between the early August high and mid-August low at $8.40 and $8.47.

Brent crude oil weighs on significant support

Brent crude oil is retesting the significant $92.43 to $91.08 July to August support area despite Monday’s OPEC+ output cut by 100,000 barrels a day from October, amounting to roughly 0.1% of global demand, to counter a potential supply boost from Iran and bolster oil prices which have rapidly dropped on fears of an economic slowdown.

Were a fall through and daily chart close below the $91.08 August low to ensue, as seems probable at the moment judging by the technical outlook, OPEC+ may decide on further output cuts to try and keep the price of Brent crude oil above the $90 mark.

A two-year uptrend line comes in at $87.85 and represents important support, having propped up the oil price since 2020.

While the price remains below Monday’s $96.54 high on a daily chart closing basis it remains in a medium-term downtrend. Above $96.54 meanders the 200-day SMA at $99.12 which acts as a proxy as to whether a market is in an up- or downtrend, depending on whether an asset’s price trades above or below it.

In case of Brent crude oil, the fact that it now trades below the 200-day SMA implies that it is in a downtrend.