Oil, gold and wheat prices drop as US dollar appreciates
Outlook on WTI, gold and wheat amid stronger-than-expected US data.
WTI drops to May-to-June support line
WTI’s recovery from last week’s low at $67.39 per barrel was short-lived and petered out at $70.19 on Tuesday as the prospect of further monetary tightening weighed on the outlook for the global economy and future energy demand. The May-to-June support line at $67.66 is being retested, below which lie the current June and last week’s lows at $67.54 to $67.39. Failure at these levels could provoke a swift sell-off to the May trough at $63.77. Immediate resistance can be spotted between Thursday’s and Monday’s lows at $68.77 to $68.97. While the price of WTI stays below this week’s high a $70.19, downside pressure should retain the upper hand.
Gold slips on appreciating US dollar
The gold price is once again being pushed lower as the US dollar rises on the back of strong US consumer sentiment, durable goods orders and new home sales. The precious metal trades in three-month lows and is approaching the late January low at $1,901. Below it sit the 9 February high and 15 March low at $1,891 to $1,886. Downside pressure remains in play while gold stays below its May-to-June downtrend line at $1,939. Only a currently unexpected bullish reversal and rise above last Friday’s high at $1,937 would void the current short-term bearish technical view.
Chicago Wheat comes off its four-month high
Chicago Wheat’s rally to a four-month high on worries of a Midwestern draught and this weekend’s aborted military coup in Russia topped out at $7.70 on Monday. The fact that the decline since then has been swift and, more importantly, has taken the price of wheat through a significant $7.30 to $7.18 support zone, points to further immediate downside being in the pipeline. The support area consists of the December and January lows and March and April highs. While the resistance zone caps, the current decline could extend back to the May to early June highs at $6.71 to $6.56 as the weather in the US improves and the situation in Russia normalised.
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