Gold remains bid, WTI rallies and US natural gas stabilises ahead of US CPI report
Outlook on gold, WTI and US natural gas futures ahead of US inflation release.
Gold in eight-month highs ahead of US inflation data
The price of gold has risen to eight-month highs and is now trading above its $1,877 per troy ounce June peak and may reach the March 2022 lows at $1,891 to $1,896 ahead of the publication of US inflation data at 1.30pm UK time.
Further up lies the late April 2022 high at $1,919. The whole $1,877 to $1,919 area may act as strong resistance, however, ahead of a possible medium-term upside target at around the $2,000 mark.
Minor support below Wednesday’s $1,868 low remains to be seen at the 4 January high at $1,865 with more significant support coming in along the November to January uptrend line at $1,849. While above it, the medium-term uptrend remains valid.
WTI recovers amid China growth hopes
WTI surged higher by more than 4% on demand optimism as the world’s largest oil importer, China is reopening its economy, leading to higher oil consumption.
According to TradingEconomics, concerns about the impact of sanctions on Russian supply also led to higher oil prices, as the European Union restrictions with regards to Russian fuel product sales are due to take effect in February.
The November-to-January downtrend line at $79.56 and the 55-day simple moving average (SMA) at $79.91 are thus back in the frame but may cap. If not, key resistance between the December and early January highs at $81.18 to $83.30 would be in focus. As long as it caps, the price of oil remains in a bearish trend, though.
Were a rise and daily chart close above the $83.30 December peak to be seen, however, a bullish trend reversal could push the price of WTI all the way back to the October and November highs as well as the 200-day SMA at $92.70 to $92.62.
Minor support sits at Monday’s $76.89 high and further minor support at the $76.12 September low.
US natural gas futures trade in 1 ½ year lows
US natural gas futures so far slid to 1 ½ year lows of around $3.30/MMBtu on clement weather forecasts and as the Freeport LNG export plant in Texas, forced to shut down in June 2022 due to a fire, is expected to re-open in the weeks to come and should be fully operational again by March 2023.
It would add additional supply at a time of relatively high inventories, potentially pushing prices lower still. US natural gas prices have fallen by around 55% from their $8.096 late November high and may soon reach the May 2021 high at $3.187.
Short-term the front month contract is trying to stabilise and is seen heading back up towards its February 2022 low at $3.875, above which sits the minor psychological $4.000 mark.
Further minor resistance can be spotted at the December-to-January price gap at $4.231 to $4.348.
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