WTI, gold bounce off support while natural gas continues to rise
Outlook on WTI, gold and natural gas ahead of Wednesday’s Fed’s rate decision.
WTI bounces off support ahead of FOMC meeting
WTI, which fell by over 9% from last week’s high, found support marginally above its late May $67.12 low on hopes for stronger demand from top importer China after its central bank lowered a short-term lending rate. Lower-than-expected US headline inflation also helped prop up the oil price as it supported bets for a pause in the Federal Reserve’s (Fed) interest rate hikes. A rise above Tuesday’s $69.95 high could lead to the April-to-June downtrend line at $72.34 being reached. Only a currently unexpected fall and slip through the $67.54 to $67.12 key support zone would void the short-term bullish outlook and put the May trough at $63.77 on the map.
Gold continues to range trade in low volatility with a bearish bias
On Tuesday the gold price revisited last week’s high at $1,973 per troy ounce before selling off again towards the lower end of its sideways trading range as US inflation came in softer than expected. The precious metal is currently trying to remain above its May-to-June support line at $1,940. As long as it stays above it and last week’s low at $1,939, further range trading is on the cards. If, however, $1,939 were to be slipped through, the May low at $1,933 would be in focus, together with the psychological $1,900 mark. Only a rise above $1,973 would push the early June high at $1,983 and the 55-day simple moving average (SMA) at $1,988 to the fore.
Natural Gas
Natural gas prices are heading back up again on concerns Europe will need to ship more gas to replenish its stocks. The front month natural gas futures price is approaching last week’s high at $2.415, a rise above which could lead to the April peak at $2.572 being reached over the coming weeks. Short-term upside pressure is expected to be maintained while Monday’s low at $2.247 underpins on a daily chart closing basis.
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