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Brent pauses ascent as gold and natural gas prices little changed

The outlook on Brent crude oil, gold and natural gas is little changed as US markets return following Independence Day.

​Gold little changed

Gold traded in a tiny range yesterday as the US benefitted from a prolonged weekend due to Independence Day.

The precious metal is little changed today, having formed a Hammer formation on the daily candlestick chart last Friday. Such a pattern is usually followed by a bullish reversal.

A rise above yesterday’s high at $1,814 would engage the April-to-July downtrend line at $1,829 and also the 29 June high at $1,833.

Slips may find support around the minor psychological $1,800 mark today. Below it more significant support can be made out between the May and current July lows at $1,787 to $1,785.

Brent crude pauses advance on supply woes

Brent crude oil reached its one-month resistance line at $113.55, and briefly rose to $113.88 on the back of a strike by Norwegian offshore workers. The strike begins on Tuesday and is expected to cut around 130,000 barrels of the country’s daily production, before coming off again on concerns a recession will eventually lower energy demand.

While last week’s high at $116.16 isn’t bettered, sideways trading between this level and the June low at $104.92 remains to be seen.

Minor support below the 55-day simple moving average (SMA) at $111.85 can be found at the $112.22 20 June low and more important support at last Friday’s $107.76 low.

Above $116.16 sits the 17 June high at $119.31.

Natural gas slips back towards its 200-day SMA

Natural gas futures plunged by around 15% last week to a three-month low at $5.37.

This followed a report by the US Energy Information Administration (EIA) on Thursday that inventory for the week ending June 24 rose by 82 billion cubic feet, sparking fears of an oversupplied market which led to natural gas futures posting their worst month in more than three years.

Since then the price of natural gas managed to heave itself back above the 200-day SMA at $5.65, around which it has held over the past three trading days. This is as Norwegian offshore workers begin to strike on Tuesday, reducing supplies, and as the International Energy Agency (IEA) in its latest quarterly market report said it expects gas usage to slip 0.5% this year as reduced economic activity in Asia and a sharp fall in European gas demand overshadows more buoyant markets in the US.

Key support remains to be seen between the November 2021 and January 2022 highs at $5.51 to $5.43 and last week’s low at $5.37. If giving way, the early March high at $5.19 would be in the frame.

Resistance sits at the 24 June low at $6.06.

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