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Gold, WTI and London wheat prices consolidate

Gold, WTI and London wheat pause following US Fed Chair’s comments to keep raising rates until inflation comes down.

​Gold price declines on US Fed chair's comments

The last few days’ bounce in the price of gold faltered at the 200-day simple moving average (SMA) at $1,837 as the US Federal Reserve (Fed) Chair, Jerome Powell, emphasised his resolve to keep raising interest rates until inflation comes down.

While remaining below yesterday’s high at $1,836, the price of gold is likely to be heading back down towards Monday’s low at $1,787 with minor support being seen at the 13 May low at $1,799.

Only a rise above the 200-day SMA at $1,837 would engage the early May low at $1,851 and the April-to-May downtrend line at $1,855.

While the next higher late April high at $1,919 caps, the downtrend remains intact. Failure at $1,781 would push the December low at $1,754 to the fore.

WTI consolidates below this week’s high

Hopes of demand recovery in China have driven the price of WTI to yesterday’s $113.30 high.

This comes as the country relaxes some of its Covid-19 restrictions with the government announcing plans on Monday to end its six-week lockdown by the end of the month.

After four days of straight price rises by around 14%, WTI seems to be consolidating today in the short-term. A rise above this week’s $113.30 peak would lead to the late March high at $116.31 being eyed next.

Minor support can be spotted around the $109.19 mid-April high and also at the late April $107.26 high with further potential support being found along the 55-day SMA at $104.96.

London wheat prices flirt with their all-time high

On Monday November 2022 London wheat futures traded at their highest ever level of £361 per tonne after India announced over the weekend that it was stopping its wheat exports to deflate local prices and ensure its supplies as a heatwave curtailed output.

This comes on the back of adverse crop conditions in Europe and the US on top of the war in Ukraine, all of which have pushed the price of London wheat up by over 50% since the Russian invasion of Ukraine on 24 February.

The November 2022 contract continues to trade near its all-time high at £361 and within its steep one-month uptrend channel. The lower channel line at £337 is likely to act as interim support, together with the 9 May high at £333.

A rise and daily chart close above Monday’s £361 high may lead to the minor psychological 400 mark being targeted.


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