Gold, WTI rallies stall during US Martin Luther King holiday while US natural gas remains under pressure
Outlook on gold, WTI and US natural gas futures during US holiday.
Gold trades in nine-month highs amid China reopening
The price of gold has risen to nine-month highs as the US trading is curtailed due to the Martin Luther King holiday.
The precious metal is now trading above its minor psychological $1,900 per troy ounce level, despite retracing lower from its Monday intraday high at $1,929, last traded in April 2022.
Even if the precious metal were to short-term consolidate as it is now deemed to be overbought, the medium-term trend continues to point towards the April 2022 peak at $1,998 and the psychological $2,000 mark.
Support comes in along the January support line at $1,895 which can be seen within the March 2022 lows at $1,896 to $1,891. Further down lies last Wednesday’s $1,868 low.
WTI recovery stalls during US holiday
WTI’s 9% surge higher from its early January low on demand optimism as the world’s largest oil importer China is reopening its economy has given way to a minor retracement as investors contemplate the prospect of an economic slowdown in other major economies.
The breached November-to-January downtrend line, now because of inverse polarity, support line at $79.03 so far underpins. Below it minor support can be found at the $77.98 high made last Wednesday. Further down sits the $76.86 late December low.
Immediate resistance is seen along the 55-day simple moving average (SMA) at $79.36 and at last week’s $80.31 high. If overcome this week, major resistance between the December and early January highs at $81.18 to $83.30 would be next in store. As long as it caps, the price of oil remains in a medium-term sideways to bearish trend.
Were a rise and daily chart close above the $83.30 December peak to occur, however, a bullish trend reversal would be formed and could push the price of WTI all the way back to the October and November highs as well as the 200-day SMA at $92.45 to $92.62.
US natural gas futures trade in 1 ½ year lows
US natural gas futures so far slid to 1 ½ year lows of around $3.23/MMBtu on clement weather forecasts expected to persist until spring, cutting demand, 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 coming days, subject to approval by the regulator.
Since the facility is expected to add additional supply at a time of relatively high inventories, US natural gas prices remain under pressure.
Prices dropped by nearly 60% 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 the minor $3.50 level, above which the February 2022 low remains to be seen at $3.875 ahead of 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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