Brent crude oil, US natural gas and gold rise ahead of US inflation data
Outlook on Brent crude oil, gold and US natural gas ahead of US CPI data.
Brent crude oil bounces off $75 region on China demand hopes
Brent crude oil has bounced off its near one-year low made close to the $75 mark amid hopes that China will relax its Covid-19 restrictions further, boosting the demand outlook for the commodity.
The bounce off Friday’s low at $75.32, a level last traded in December of last year, is taking the price of Brent towards its November trough at $80.81, above which the 21 November low at $82.32 might also act as resistance ahead of the two-month downtrend line at $85.18.
While the next higher $89.30 to $89.35 22 November and early December highs aren’t overcome, Brent remains in a medium-term downtrend since a series of lower highs and lower lows can be spotted on the daily chart.
Minor support sits at last week’s $75.32 low and further support at the $71.13 March 2021 high.
Gold continues to flirt with the 200-day simple moving average
Gold’s slip from last Friday’s $1,806 per troy ounce high has briefly taken it to Monday’s low at $1,778 before continuing to flirt around the 200-day simple moving average (SMA) at $1,790 ahead of Tuesday’s US inflation data and the widely anticipated 50 basis point rate hike by the US Federal Reserve (Fed) on Wednesday.
The key technical levels to watch out for are the $1,810 early December high and last week’s $1,763 low. If the latter were to be slipped through, the precious metal may be slipping back towards its $1,735 to $1,727 key support area.
Were Friday’s and the early December highs at $1,806 to $1,810 to be exceeded, however, the way would be opened up for the June peak at $1,877 to be targeted.
Since negative divergence can still be seen on the daily Relative Strength Index (RSI), the odds favour either further short-term consolidation or a sell-off in the price of the precious metal and do not point to an advance in the near future.
US natural gas futures recover to the 55-day SMA
US natural gas futures have rallied by close to 25% from their $5.320 early December low amid hopes of China’s Covid restrictions easing and as the European Union (EU) seeks to break its deadlock over capping natural gas prices by agreeing to a price ceiling.
The front month futures contract gapped higher from Friday’s $6.313 high and is currently being supported by the area between the 55-day SMA and Monday’s low at $6,481 to $6.406.
The previous two-month support line, because of inverse polarity now a resistance line, at $6.780 offers minor resistance, together with Monday’s $6.936 peak.
Further up meanders the 200-day SMA at $7,168 which is likely to act as resistance, if reached at all.
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