Gold, Brent crude and lumber head lower as recessionary fears lift the dollar
Gold, Brent crude and lumber come under pressure, as growth concerns and a strengthening dollar hurt sentiment.
Gold falls into yet another multi-year low
Gold been hit hard at the hands of the dominant dollar, with the strength of the greenback helping to eradicate any haven demand for this precious metal.
With price having dropped back below the $1677 threshold, we are into levels not seen since the early days of Covid (April 2020).
With price having consolidated over the course of the past week, the decline through $1654 brings about a new phase of this sell-off. This points towards expectations of further downside to come, with another consolidation/retracement phase likely to take shape soon enough.
Both the intraday and long-term trend currently indicate a potential continuation of the ongoing bearish pattern, with bearish positions favoured unless we see otherwise. Thus, short positions remain prudent until we see the $1688 level breached.
Brent crude declines into eight-month low
Brent crude has managed to breach the $87 support level dating back to early September, with price falling into the lowest level since January.
The demand picture certainly remains under the microscope given expectations of widespread recessions, and a cost-of-living crisis that will likely curtail spending habits.
There is still a good chance that we see some support if Iranian talks break down or the US reverses SPR releases and starts to build up supplies once again.
This latest decline has taken price into the lower Bollinger Band, with a descending trendline also accompanying price around current levels.
With that in mind, there is a chance we see price hold up before long, with a decline through this zone needed to signal a potential drive into 76.4% Fibonacci support at $81.25.
To the upside, any near-term strength looks like a potential selling opportunity, with a bearish view holding unless price rises through the $95.19 swing-high.
Lumber finally breaks through $460 support
Lumber has been under pressure over the course of the past week, with price finally breaking through the critical $460 support level.
That has brought about a fresh two-year low for this commodity, as concerns around the housing market and economic growth bring questions over demand going forward.
The fact that we have finally cleared out this critical support level means we are likely to see a bearish continuation here, with any near-term gains perceived to be a retracement of the sell-off from $578.
Unless that price is breached, short-term strength is seen as a selling opportunity within a clear long-term downtrend.
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