Brent crude oil, US natural gas and gold bounce on sliding US dollar
Outlook on Brent crude oil, gold and US natural gas amid a sliding US dollar.
Brent crude oil bounces off $80 region
Brent crude oil has bounced off a near one-year low close to the $80 mark after consultancy firm Eurasia Group suggested that weaker Chinese demand could spur OPEC+ to cut output.
Since the beginning of November, the price of oil has nearly dropped by 20% as China remains mired in tough Covid-19 restrictions and as the risks of a global recession are mounting with the US Federal Reserve (Fed) nonetheless sticking to its tightening path.
The current bounce off yesterday’s low at $80.81, a level last traded in January, has taken the price of Brent crude oil out of its November downtrend channel towards Friday’s high at $86.88, above which lurks the $87.99 mid-October low.
While the next higher $89.30 22 November high isn’t overcome, Brent remains in a downtrend since a series of lower highs and lower lows can be seen.
Minor support sits between the late September trough and the 21 November low at $82.55 to $82.32 and more significant support at Monday’s $80.81 low.
Gold steadies above key support zone
Gold’s recovery from last week petered out at Monday’s $1,763 per troy ounce high with the precious metal slipping back towards its $1,735 to $1,727 key support area amid a short-term recovery in the US dollar.
With the greenback slipping back again early on Tuesday, the price of gold is heading back up towards its recent high at $1,763. Further up the November peak can be spotted at $1,786 and the 200-day simple moving average (SMA) at $1,797.
Failure at Monday’s $1,740 low would put the $1,735 to $1,727 support area back on the map.
US natural gas futures oscillate around the 200-day SMA
US natural gas futures have come off last week’s two-month peak at $8.096 and slid to Monday’s low at $6.930 on global recession fears and China’s lockdowns.
On Tuesday morning the front month futures contract traded back above the 200-day SMA at $7.092 and may revisit the $7.323 early November high. Were this not to cap, the minor psychological $8.000 mark may be back in focus.
On the flipside a drop through Monday’s $6.930 low could lead to a retest of the 55-day SMA at $6.752 taking place. Below it the October-to-November support line can be spotted at $6.355.
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