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​Brent crude oil, gold and US natural gas rallies pause amid US midterm elections

​Technical analysis on Brent crude oil, gold and US natural gas within their fundamental context.

Oil Source: Bloomberg

​​Brent crude oil rally is taking a breather

Brent crude oil’s rally above its $98.00 early October high has taken it to a three-month high at $99.06 on Monday before pausing ahead of US midterm elections.

Minor resistance above $99.06 comes in around the psychological $100 mark and also along the 200-day simple moving average (SMA) at $101.79 whereas support below Monday’s low at $96.43 can be spotted at the $95.19 mid-September high. Further down lies the $94.29 mid-October high which may also offer support, if revisited at all.

While the price of Brent crude oil remains above its last relative low, a low on a daily candlestick which is lower than that of the previous and next candle, it remains in an uptrend. The last one was formed in late October at $91.36.

Brent chart Source: ProRealTime

Swift gold rally stalls below key resistance zone

Gold’s swift rally by over $50 last Friday on rumours of China relaxing its strict Covid-19 restrictions took the precious metal to its key $1,681 to $1,689 per troy ounce resistance zone which caps it for the time being, ahead of US midterm election results.

This resistance zone consists of the July and early September lows and, because of inverse polarity, now acts as resistance, together with the 55-day SMA and the August-to-November downtrend line.

Were it to be overcome, the minor psychological $1,700 mark would be back in the picture with the October peak at $1,729. Slips may find support around the mid-September low at $1,655.

Gold chart Source: ProRealTime

Strong US natural gas futures’ rally followed by retracement lower

US natural gas futures, which on Monday gapped higher to a near two-month high by rising by 8% on renewed inflation fears to $7.323, are seen giving back some of their sharp gains and are likely to close their gap with Friday’s high at $6.609.

According to IG’s senior market analyst, Joshua Mahony, this week’s surge in the price of natural gas occurred “as weather forecasts signal a colder-than-normal December in Northwest Europe” and as traders questioned the “European ability to fill their tanks next year in absence of all Russian imports.”

Support below Friday’s high at $6.609 can be found between the late October high and the early October low at $6.428 to $6.370.

The front month futures contract managed to rally to the 55-day SMA, now at $7.277, which capped it on Monday, however. If bettered, the August low at $7.545 would be back in the frame.

Natural gas chart Source: ProRealTime

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