WTI and gold trade in low volatility while wheat slips back
Outlook on WTI, gold and Chicago wheat a day after an Ukranian dam has been blown up.
WTI range trades following OPEC+ meeting
WTI, which last week rallied by over 8% as Saudi Arabia announced voluntary output cuts of 1 million barrels per day in July over the weekend, is seen slipping once more on demand concerns. If Wednesday’s low at $70.23 were to give way, the mid-May low at $69.39 would be eyed. More significant support rests at the late May $67.12 low. The mid-May high at $73.30 and April-to-June downtrend line at $73.34 are expected to cap any potential short-term rally this week.
Gold trades in low volatility with a bearish bias
On Monday the gold price bounced off its November-to-May uptrend line, now at $1,942 per troy ounce, as the US dollar rally stalled. With the greenback appreciating once more, the precious metal is slipping back towards its seven-month uptrend line at $1,942, below which lie Monday’s trough at $1,939 and last week’s low at $1,933. While the $1,939 to $1,933 support zone holds, a recovery towards last week’s high at $1,983 may ensue but if it were to give way, the minor psychological $1,900 mark could be back in the frame. For the bulls to be back in control, the two-month downtrend line at $1,970 would need to be overcome, however.
Chicago Wheat spike turned out to be short-lived
On Tuesday the price of wheat initially rallied for a fifth consecutive day on supply worries as the southern Ukrainian Kakhovka dam had been blown up which led to widespread flooding. A day later, Chicago wheat is practically trading at similar levels to before the catastrophe took place with it now looking vulnerable to the downside with the mid-May low and late May high at $6.31 to $6.29 per 5,000 bushels being eyed. Further down the major psychological $6.00 region should offer strong support, if reached at all that is. For bullish momentum to gain traction, not only Tuesday’s high at $6.56 but also the May peak at $6.71 would need to be exceeded.
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