WTI, gold rally pause as US natural gas resumes its descent
Outlook on WTI, gold and natural gas as US dollar and yields rally.
WTI gives back some of its recent gains
WTI’s up to 8% rally from last week’s low is easing as OPEC did not heed a call by Iran for an oil embargo on Israel and as traders reassess the supply situation. While WTI stays below Wednesday’s $88.59 high, a slip through the one-week support line at $86.36 may ensue in which case the 55-day simple moving average (SMA) and Tuesday’s low at $85.06 to $84.45 would be back in sight. While this support zone holds, the recent uptrend will remain intact. A currently unexpected rise above this week’s $88.59 high would put the minor psychological $90 region back on the plate.
Gold trades in 2 ½ month highs on heightened Middle East tensions
Gold’s over 6% rally since the Middle East flared up, as it once again acts as a flight-to-safety commodity, has so far taken it to Wednesday’s $1,962 per troy ounce high. Above it beckons the key $1,983 to $1,987 resistance area which consists of the June and July peaks. Slips should find support between Friday’s Marabuzo candlestick pattern high and the 200-day simple moving average (SMA) at $1,933 to $1,931. While the precious metal remains above its breached May-to-October downtrend line at $1,920, the gold price remains within a steep uptrend with the psychological $2,000 mark representing a possible upside target.
Natural gas prices come further off their ten-month high
Last week US natural gas futures reached a ten-month high at $3.585 as colder weather forecasts lead to expectations of a surge in winter demand before drifting lower since then. Tuesday’s $3.289 low remains in sight, a fall through which could lead to the $3.056 to $3.050 March and August peaks being revisited in the coming weeks. Minor resistance comes in at Wednesday’s high at $3.432. If bettered, the $3.500 region may be retested. Above the next higher current $3.585 October high lies the 12 January high at $3.742.
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