Brent crude and US natural gas prices under pressure while gold surge continues
Outlook on Brent crude oil, gold and US natural gas amid a sliding US dollar.
Brent crude oil pressured by demand concerns
Brent crude oil is probing its September-to-November support line and 55-day simple moving average (SMA) at $91.90 as demand concerns amid resurgent Covid-19 outbreaks in top crude importer China outweigh signs of tightening supply heading into winter.
On Monday the price of Brent crude slid by over 3% and by around $4 per barrel as OPEC further trimmed its global oil demand growth projections for 2022 and 2023, citing mounting economic challenges such as high inflation, rising interest rates and supply chain disruptions.
Support below the 55-day SMA at $91.90 comes in at last week’s low at $91.18, a fall through which would most likely engage the psychological $90.00 mark below which the mid-October low can be spotted at $87.99.
Minor resistance sits at the 21 September high at $92.53 as well as at the 20 October high at $93.30.
While the last reaction high at $96.21, made last Friday, isn’t overcome, the short-term bias points towards further downside being seen.
Gold surge continues amid depreciating US dollar
Gold’s swift rally by over $150, or close to 10%, from its early November low at $1,617 per troy ounce is ongoing amid a depreciating US dollar and the Republican party being one seat away from taking back control of the US House of Representatives.
The precious metal is gunning for the 200-day SMA and August peak at $1,803 to $1,808 while evolving in a clearly defined, narrow uptrend channel, which on Tuesday offers support at $1,760.
More important support can be found between the mid-September and October peaks at $1,735 to $1,729.
US natural gas futures sidelined in tight range
US natural gas futures have come off last week’s two-month peak at $7.323 and slid to last week’s low at $5.899 before trading sideways over conflicting information about when Freeport LNG might return to service.
Freeport said it had not made any public statements on the timing of its highly anticipated return to service and that “any Tweets and/or posts on Freeport LNG-branded letterhead” were not legitimate.
The front month futures contract continues to range trade between last week’s low at $5.899 and Friday’s high at $6.675 and is seen slipping back towards its two-month uptrend line at $6.065.
If slid through, it is probable that not only last week’s low at $5.899 but also the late October low at $5.565 will be reached. While $6.675 caps, downside pressure should retain the upper hand.
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