Brent crude oil and gold rally on falling US dollar and US natural gas prices
Outlook on Brent crude oil, gold and US natural gas as US dollar sees steepest 4-day loss since July 2020 amid weaker than expected US ISM manufacturing data.
Brent crude oil probes resistance on OPEC+ supply cut rumours
Brent crude oil’s recovery from its $82.55 September low is grappling with the breached 2-year uptrend line which, because of inverse polarity, now acts as a resistance line as rumours abound that OPEC+ will cut output by more than 1 million barrels per day (bpd) at its meeting in Vienna on Wednesday.
This coupled with a weaker US dollar having witnessed its steepest 4-day loss since July 2020, helped the price of Brent crude oil recover by over 7% from its late September low.
Good resistance sits between the July, August lows and the 21 September high at $91.08 to $92.53. Further up the mid-September high, 55-day simple moving average (SMA) and five-month downtrend line can be spotted at $94.42 to $95.19.
Slips should find support near the early September low at $86.99 with further minor support being found at the 30 September trough at $84.93.
Gold surges to 3-week high
The gold price’s 5% rally off its September 2 ½ year $1,616 per troy ounce low on a rapidly depreciating US dollar has taken it to above its $1,681 to $1,689 resistance zone which entails the July and early September lows.
In doing so it has left its August-to-October downtrend channel and is seen heading towards the 55-day SMA and 12 September high at $1,723 to $1,735. Any short-term retracement is likely to find initial support in the $1,689 to $1,681 zone.
Further down lies Monday’s low at $1,660.
US natural gas futures slip to 2 ½ month low
US natural gas futures dropped around 4% on Monday, hitting a 2 ½ month low as the US ISM Manufacturing PMI unexpectedly fell to 50.9 in September, its lowest growth in factory activity since the 2020 Covid-19 pandemic as companies adjust to potential future lower demand.
On Monday the front month contract slid by over 6% to $6.370 on weak demand, to below the 200-day SMA at $6.623, another daily chart close below which would push the July low at $5.330 back to the fore.
On the way down minor support can be spotted at $5.955, the 12 July low. Resistance above the 200-day SMA comes in between the 27 and 29 September highs at $7.147 to $7.236.
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