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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Trade on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
