Gold and Brent rally while natural gas is giving back recent gains
The short-term outlook on gold and Brent crude oil remains bullish while that of natural gas is pointing lower.
Gold rallies towards April-to-July downtrend line
Gold rallies for the third straight session to its highest level in three weeks and is fast approaching its four-month downtrend line at $1,775, as a negative US GDP data pushed the US economy into a technical recession and prompted markets to scale back hawkish expectations from the Federal Reserve (Fed).
The US economy contracted for a second straight quarter, the definition of a technical recession, raising expectations that the Fed may need to slow down the pace of interest rate hikes.
Despite the current rally, gold prices are still set to decline for the fourth straight month, having faced constant pressure since mid-March from a rallying dollar and US bond yields.
For further upside in the price of the precious metal to be seen, a rise and daily chart close above the downtrend at $1,775 needs to ensue in which case the May low at $1,786 may be reached next.
Minor support can be found between the 8 and 13 July highs at $1,752 to $1,745.
Natural gas futures come off their July peak
Natural gas futures have rallied by over 65% from their 5 July three-month low at $5.33 by spiking to Tuesday’s high at $9.41, perilously close to the late May and June highs at $9.43 to $9.53, before snapping back and slipping through its steep one-month uptrend line.
The spike in the price of natural gas came as Russia announced it would reduce the flow of gas through the Nord Stream 1 pipeline to 20% from Wednesday onwards.
Short-term a further slide towards the late May and early June lows as well as the 16 June high at $8.02 to $7.92 seems to be at hand. Below it meanders the 55-day simple moving average (SMA) at $7.59.
Minor resistance is seen at Wednesday’s $8.35 low.
Brent crude oil attacks downtrend line
Brent crude oil is attempting to overcome its two-month downtrend line at $102.70 and reach the more significant $104.42 to $104.92 resistance area which contains the mid-May and 22 June lows and last week’s high. There it may falter once more.
If not, the 8 July high at $1065.25 would be in focus. Minor support below Monday’s high at $100.78 sits at Wednesday’s low at $98.93.
Further down Monday’s low and the 200-day simple moving average (SMA) can be spotted at $97.17 to $97.08.
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