Lumber and Brent crude oil prices rally while gold rise pauses
Lumber up 25%, oil remains bid but gold rally stalls.
Brent crude oil continues to bounce off significant support
Brent crude oil’s recovery from its April 2020 to September 2022 uptrend line has taken a short-term breather after its three-day winning streak as traders await US inflation data that could influence the Federal Reserve’s (Fed) tightening plans and the trajectory of global growth.
A weaker US dollar and signs of ongoing supply tightness in physical markets recently helped the price of Brent crude oil rally by around 8% with the 5 September high at $96.66 being targeted in the near-term.
Key resistance comes in between the 55- and 200-day simple moving averages (SMA) and the four-month downtrend line at $98.71 to $99.75.
Slips should find support between the early August to early September lows at $92.35 to $91.08.
Gold down after hitting a two-week high
The gold price stalled at $1,735 per troy ounce on Monday after reaching a two-week high.
Despite its recent bounce gold remains within a medium-term downtrend, defined by lower highs and lower lows, and still trades around 4.5% lower than at its August peak.
Minor support below the 29 August low at $1,721 comes in between Monday’s low and the breached one-month downtrend line at 1,712 to 1,707.
Only a rise above Monday’s high at $1,735 would engage the 55-day SMA at $1,746.
Lumber rallies by 25% on US rail strike fears
The price of lumber, which declined by over 65% from its March one-year high at $1,340 per thousand-feet boards, gapped higher yesterday and rose by 25% from its $460 early September low as a potential US rail strike threatens to cripple transportation.
US freight railroads and labour unions are trying to resolve a dispute over pay and conditions ahead of a planned walkout on 17 September which could have serious implications on shipments of grains, fertilizer, and energy at a time when the world increasingly turns to the US for food supplies.
Lumber, which makes up the US’s fifth largest top freight after corn, wheat and soybeans and its derivatives, is rapidly heading back up towards its $634 early August high, above which the late May and July highs can be spotted at $714 to $744.
The late August $522 high and lower end of yesterday’s large price gap at $516 may act as support, should an accord between US railroads and unions be reached and the rail strike be called off.
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