Gold losing its shine as natural gas prices start to push higher but Brent continues to struggle
Gold starts to weaken as natural gas regains lost ground. Brent crude continues to struggle for direction amid a plethora of potential key driving forces.
Gold starts to turn lower after latest surge
Gold has enjoyed a period of recovery over the course of November thus far, with the index climbing 10% over a fortnight.
However, we are starting to see some of that momentum wane here, with the declines seen across equity markets yesterday feeding through into sentiment for gold.
It is worthwhile noting the fact that gold has been largely trading in line with risk assets, meaning that this market should continue to perform well if indices rise and the dollar drops. A reversion to the more commonly found trend of dollar strength and equity weakness would likely serve to drive gold lower once again.
With that in mind, much of the sentiment here is driven by risk attitudes elsewhere in financial markets. The recent rebound for gold provided us with a double bottom formation, signalling the potential for further upside upon breaking the $1729 level.
However, the $1808 level represents the next major hurdle to overcome if we are to truly believe this 2022 downtrend is over. Thus far we are seeing momentum turn somewhat, signalling the potential for a move lower here. A move below the 80 threshold on the stochastic would provide us with a sell signal.
Meanwhile, further upside is certainly a possibility, although a break through $1808 would bring greater confidence that bullish sentiment can be sustained.
Brent crude back into support as market struggles for direction
Brent crude has been struggling to establish any conviction of late, with the recovery phase seen in October faltering at the 76.4% Fibonacci resistance level.
However, rather than breaking lower once again, we are seeing price move largely sideways ever since. As things stand, the $91.17 level appears to be restricting any further downside, with a break below that level bringing $87.98 into play. A move below $87.98 or above $98.54 could potentially kick things back into life.
Nonetheless, there are a number of factors which could swing sentiment in one direction or another, and until one comes to the fore it seems we are likely to lack any major impetus for crude.
Natural gas turns upwards from trendline support
Natural gas has started to drive upwards once again today, following on from a sharp pullback from $7.261 resistance.
The ability to push through that resistance level would be key here, signalling the end of the bearish trajectory seen over the course of August-October.
As such, further upside looks likely here, although it will take a push through $7.261 to bring greater confidence that the bulls are back in charge.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.