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.
The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.