Gold, natural gas and oil price rallies stall
Recent bounces in the price of gold and Brent crude oil are losing upside momentum while natural gas prices remain subdued.
Gold rally runs out of steam along August-to-September downtrend line
Gold is rallying for its third straight session whilst trying to overcome a one-month downtrend line at $1,729 per troy ounce, so far to no avail, as Russia’s state-owned energy giant, Gazprom, suspended gas flows through the Nord Stream 1 pipeline indefinitely on Friday, leading to flight-to-safety flows into gold on European recession fears.
Despite the current rally, the gold price remains in a technical downtrend, defined by lower highs and lows, and trades around 4.5% lower than its August peak, having last week dropped to $1,689, close to its $1,681 July low, before rallying.
While the downtrend line caps on a daily chart closing basis, this support area may be revisited. Minor resistance above the downtrend line can be found between the $1,755 early August low and the last reaction high on the daily chart, that is to say at the 25 August high at $1,765.
Natural gas futures hover above Friday’s low
Natural gas futures' slide from their August high at $9.97, made close to the psychological $10 mark, has taken place within a short-term downtrend channel with these now trading back below the late May and June highs at $9.53 to $9.43 despite Gazprom cutting off the flow of gas through the Nord Stream 1 pipeline on Friday.
In the short-term the contract seems to be holding above Friday’s $8.63 low and while it continues to do so, a rise back towards the upper downtrend channel line at $9.14 may ensue this week.
A drop and daily chart close below Friday’s $8.63 low would most likely push the early August high and mid-August low at $8.47 to $8.39 to the fore.
Brent crude oil rally loses momentum
Brent crude oil’s bounce off Thursday’s $91.71 low, made within the $92.75 to $91.17 July to August support area, seems to have fizzled out at yesterday’s $96.66 high as traders weigh the impact of the modest 100,000 barrels a day output cut from October by OPEC+ and the potential for further action from the group.
This amounts to roughly 0.1% of global demand and won’t help much in dealing with macroeconomic headwinds.
A rise and daily chart close above $96.66 would likely put the 200-day simple moving average (SMA) at $99.05 back on the cards. This will remain a possibility while the significant $92.75 to $91.17 support area continues to underpin.
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