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Gold and Brent prices consolidate while natural gas futures soar

The outlook on natural gas, gold and Brent crude oil remains bullish despite the latter short-term consolidating.

Gold trades back around the 200-day SMA

The gold price is once more oscillating around the 200-day simple moving average (SMA) at $1,842, having come off last week’s high at $1,874 amid a stronger US dollar, firmer US treasury yields and a sluggish performance of Asia-Pacific indices.

Further sideways trading around the 200-day SMA is expected to take place this week with last week’s low at $1,829 perhaps being retested. If slipped through, the 18 May low at $1,807 would be targeted, below which the May trough can be spotted at $1,787.

Minor resistance remains to be seen between the late May highs at $1,864 to $1,869 and last week’s high at $1,874.

Brent crude oil consolidates below last week’s $120.99 high

The price of Brent crude oil is taking a breather below last week’s $120.99 three-month high as a commitment by OPEC+ to boost output has been followed by its main member, Saudi Arabia, raising its official selling prices for July for its customers in Asia and Europe.

As China emerges from its two-month lockdown, demand for oil is expected to increase, pushing the price even higher. An advance above the current June high at $120.99 would put the $125 area into play. Above it lie the minor psychological $130 mark and the March peak at $131.51.

Strong support remains to be seen between the mid-April to May highs and last week’s low at $114.30 to $112.20.

Natural gas futures trade at multi-decade highs

Natural gas futures have so far briefly risen above their $9.43 May high to levels last seen in August 2008 amid solid global demand for energy which continues to push natural gas prices higher.

Recent data from the US Energy Information Administration (EIA) shows that working gas in storage is 15.1% lower compared to the five-year average as US crude oil inventories are also 15% below their five-year average for this time of the year, indicating that energy supply remains tight.

Despite this morning’s foray into multi-year highs the natural gas futures contract continues to show a rising wedge formation which may eventually lead to a trend reversal. This occurs when new highs are compressed and is a bearish chart formation as it indicates a possible trend reversal during an uptrend when the price slips through the lower uptrend line.

At present the uptrend line seems to be far away, though, at $8.47. Minor resistance comes in along a one-month resistance line at $9.70 as well as at the psychological $10 mark.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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.

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