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Gold and natural gas retrace losses and advance, oil price takes a breather


MongiIG

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Natural gas prices moved higher for the fourth straight day, while gold regained its forward-moving pace. Tensions in Russia-Ukraine have meanwhile fuelled the oil price.

bg_gold_363727358.jpgSource: Bloomberg
Hebe Chen | Market Analyst, Australia | Publication date: Thursday 17 February 2022

Natural gas: mid-term momentum stays positive

Natural gas prices moved higher for the fourth straight day and continued to regain the loss from the slide since early February.

Up to Thursday, the price has pushed through former resistance from the January high and left the 20- and 50-day moving averages (MA) in the rearview mirror. The 100-day MA will be the imminent resistance level to challenge in the next couple of days, which, if broken through successfully, will see the price of natural oil advance towards the recent high at 5230.02 and challenge the November high.

Medium-term momentum is poised to stay positive as two emerging signs: first, the RSI trendline is moving towards overbought territory at around the 60 level; second, the low of each pullback since December has formed an ascending trendline, manifested the market’s appetite for dip-buying.

Natural gas daily chart

Natural%20Gas%20daily.JPGSource: ProRealTime

Oil: time to take a breather

The tension in Russia-Ukraine has pushed the oil price up approximately 7% in the past two weeks and 23% since the start of 2022.

As a result, the news mid-week that Russian troops have moved from the Ukrainian border served to quell some of the concern and saw the high-flying oil price take a breather. The price of Brent crude fell substantially from $95.75 early this week to land on $91.23 by the time of writing. The 20-day MA is the most notable support at the moment, while the 50- and 100-day MAs are still a distance behind. The RSI has reached its lowest level since early January showing the slowing of the momentum of the past weeks.

Looking ahead, although the geopolitical tensions have decreased, they've not entirely dissipated, meaning that the supply concerns that drove the oil price up might resurge in the next couple of days or weeks. Hence, it might be too early to say that the oil price has reached its peak, especially considering the price is still firmly above all its major moving averages from a technical point of view.

Brent crude daily chart

Oil%20daily.JPGSource: ProRealTime

Gold: climb towards one-year high

The price of gold has erased all the losses from the early week’s tumble and regained its forward-moving pace.

The next upside barrier can be found from November’s high of $1,871, above which doors will reopen for a new upswing towards the twelve-month peak.

Bulls await the next entry if the price retreats and are looking to the nearest support at $1,848, which is the most notable rooftop in January and near the lower boundary of the moving channel. In addition, the RSI is moving closer to overbought territory to suggest a near-term breather should be on the cards.

From a mid-term perspective, an ascending trendline connected by the lows since September 2021 (refer to weekly chart) show the momentum for the precious metal is expected to stay in favour of long buyers.

Gold price daily chart

Gold%20daily.JPGSource: ProRealTime
Gold%20weekly.JPGSource: ProRealTime

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