Brent crude oil, US natural gas recover amid ongoing gold rally
Outlook on Brent crude oil, US natural gas and gold amid re-opening of China.
Gold rallies to seven-month high towards $1,877 June high
Gold now trades in seven-month highs and looks to be on track to reach its $1,877 per troy ounce June peak. Above it the March 2022 lows can be spotted at $1,891 to $1,896 and the late April 2022 high at $1,919, all of which may act as strong resistance if reached.
Minor support can be seen at the 4 January high at $1,865 and more significant support along the November to January uptrend line at $1,834. While it underpins, the medium-term uptrend which began in November is expected to continue.
Brent crude oil’s tumble pauses
Brent crude oil is bouncing off its early January three-week low at $75.65 on hopes of less aggressive monetary tightening by the US Federal Reserve (Fed) following last week’s Non-Farm Payroll data which showed payroll gains without excessively strong wage growth and as China re-opened without restrictions.
The party secretary of the People’s Bank of China, Guo Shuqing, said on Sunday that the country’s economic growth should quickly rebound and return to pre-Covid-19 levels as the government provides financial support to private companies and households to help them recover from the past three years' Covid-related slump.
The oil price is currently targeting its $81.86 late December low above which lies the mid-December high at $83.18 and the 2022 to 2023 downtrend line at $85.68.
The December and current January lows at $75.65 to $75.32 represent strong support and while this area holds, a sustained move higher may well ensue this week.
US natural gas futures recover from 1½ year lows
US natural gas futures last week slid to 1½ year lows of around $3.5/MMBtu as investors realised that some of their greatest fears such as prolonged extreme cold weather and supply shortages didn’t materialise.
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 second half of January, additional supply at a time of relatively high inventories is likely to keep prices low.
US natural gas prices have fallen by around 54% since their $8.096 late November high. The front month contract seems to be levelling out in the short-term, however, 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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