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Gold and wheat prices stabilise while WTI trades near 2-month highs

Outlook on stabilising gold prices, London wheat futures and oil.

​Gold price stabilises above 200-day SMA

The gold price is bouncing off yesterday’s low at $1,841, made marginally above the 200-day simple moving average (SMA) at $1,840, and is gradually heading back up towards this week’s high at $1,869, following the publication of less than anticipated hawkish Federal Open Market Committee (FOMC) minutes.

Today’s rise is taking place amid a continued slide in the greenback. Immediately above this week’s high at $1,869 lies the April low at $1,873. Further up, the mid- and late March highs can be spotted at $1,891 to $1,895 and are expected to act as resistance ahead of the early May high and 55-day simple moving average (SMA) at $1,905 to $1,909.

Minor support below the 200-day SMA at $1,840 can be seen at the 17 May high at $1,836.

WTI trades in two-month highs

Yesterday WTI briefly traded in two-month highs at $114.03 with the late March peak at $116.31 remaining firmly in view as supply worries continue to drive prices up amid strong demand.

This week’s EIA data showed a larger-than-expected drawdown in US crude inventories last week due to soaring exports, highlighting a tight global market.

Meanwhile, the EU continues to negotiate with Hungary over banning oil imports from Russia with European Council member, Charles Michel, saying he is confident that an agreement can be reached before the council’s meeting next week.

However, a Hungarian spokesman said the country needs up to four years to shift away from Russian crude oil imports and make huge investments to adjust its economy and that it could not back the EU’s proposed oil embargo until it agreed to a financial aid package for the country.

Good support remains to be seen between the 5 and 23 May highs at $111.43 to $111.48. While the price of WTI stays above yesterday’s low at $109.61, upside pressure should retain the upper hand.

Below this level the one-month support line can be seen at $109.10.

London wheat prices try to level out

In mid-May November 2022 London wheat futures traded at their highest ever level of £360.05 per tonne after India announced that it was stopping its wheat exports to deflate local prices and ensure its supplies as a heatwave curtailed output.

Since then, the price of wheat has slid back as some Indian government ministers let it be known that there was room for manoeuvre. The Indian food and trade minister Piyush Goyal, on Sunday told news channel India Today that while the export ban was to ensure fair distribution of countries in need, rather than letting speculators determine the price of wheat, the government was “responsive” to changing times and that India “encourage(s) governments to talk to us and wherever we can, we are ready and willing to support.”

Global wheat prices have since eased slightly with the November 2022 London wheat contract slipping back towards the 55-day SMA at £307 before stabilising. While this week’s high on the Daily Financial Bet (DFB) at £339.5 isn’t overcome, further slips in the price of wheat may ensue in the course of next week.

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