Softer dollar gives gold, oil and natural gas prices room to rally
Commodities have been bolstered in the wake of the Fed decision, as the dollar retreats from a pre-meeting high.
Gold rebound continues
Gold prices have rallied over the past three days, but having recouped most of Monday’s losses the price still needs to break above the last lower high from last week.
Already a move towards $1900 has been knocked back, with sellers no doubt looking to build on this intraday high to push the price back towards $1860 and then lower.
It will take a move above $1900 and then on above last Friday’s high at $1920 to break the downtrend that has prevailed since mid-April.
Below $1860 the price looks towards $1854 and then down to the 200-day simple moving average (SMA) at $1835.
WTI climbs back to April high
Talk of a European ban on Russian oil imports yesterday helped oil prices, and then a softer US dollar in the wake of the Federal Open Market Committee (FOMC) decision.
Prices have now moved back to the mid-April high for WTI, at $107.68, so a breakout above here provides fresh bullish impetus, fortified by the high stochastic readings that denote strong forward momentum.
Further gains would target $110.70, and then on to $114.83, with a longer-term target up towards the February highs at $126.
For the time being sellers seem to have a hard time ahead of them, giving the weakening of the dollar, but a reversal below $102 would break trendline support from the April low and bring $95 and then $92 back into view.
Natural gas soars
Once again natural gas has outpaced oil in terms of its gains, rallying to its highest level since 2008.
The short-term pullback in the second half of April provided enough of a drop to tempt buyers back in, with the price finding support near 6500 and mounting a fresh rally in the subsequent weeks.
The price has now returned to trendline resistance from the 2012 low, which it tested back in 2018.
Given talk of European moves to ban Russian gas imports as well as those for oil, it appears this has room to move higher over the medium-term, potentially bringing 9050 into view.
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