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Gold and Brent crude lose traction as natural gas grinds higher

Gold and Brent crude head lower, with recent gains starting to fade. Meanwhile, natural gas continues to grind higher, as traders keep an eye out for European weather effects.

Gold Source: Bloomberg

​Gold continues to weaken after recent rebound

Gold has been on the back foot over much of the past week, with the precious metal losing traction after a period of upside that brought about a three-month high last week.

However, with price still yet to break through the crucial $1808 resistance level, the wider trend of lower highs does still remain in play here.

With that in mind, there was always a heightened chance that we see price turn lower before long, with the recent topping out in the MACD histogram signalling the potential for such a loss of momentum.

The stochastic looks likely to break back down through the 80 threshold here, signalling that there may be further downside to come from here.

To the downside, $1735 represents the first major hurdle to overcome.

Gold chart Source: ProRealTime

Brent crude breaks support to bring bearish continuation signal

Brent crude has finally shown its hand following a period of consolidation that brought significant uncertainty for crude.

While there are plenty of reasons why we could see Brent come into strength down the line, we are clearly yet to see markets attach enough importance to move the dial.

Instead, we have seen the bears come back into play, as the prospect of a drawn-out recessionary environment, and continued Covid restrictions in China dampen the demand outlook.

Last week saw price finally break lower, with the move through $91.17 giving way to send price back through the more important $87.98 swing-low.

Coming off the back of a 76.4% Fibonacci retracement, this signals a high likeliness of sending price back down into the $82.65 low to continue the downtrend that has dominated the past six months.

Brent crude Source: ProRealTime

Natural gas likely to continue its recovery after decline into support

Natural gas has been on the rise since the upside turn seen around the $5.329 support level back in October. That recovery phase looks likely to continue from here, with price grinding higher above the ascending trendline.

Quite whether we will see another major spike this winter remains to be seen, with European supplies looking to benefit from a relatively mild winter thus far.

However, it is worthwhile noting that this could change if forecasts signal the potential for a cold snap. Until then, this recovery is a relatively calm affair, with further upside looking likely unless price breaks back below the $5.898 support level.

Natural gas Source: ProRealTime

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