Gold and Natural Gas Futures Show Volatility and Potential Reversals
Since May 25th, Natural Gas has experienced weeks of volatility amid growing uncertainty over a rate hike. However, it now looks set to hit its new targets. On the other hand, gold futures began to decline after showing some strength on June 14 and 15, following the Federal Reserve’s press conference.
Gold Futures Analysis:
The weekly chart of gold futures on June 22 indicated a potential continuation of the sharp slide in the coming weeks if gold closes below $1,897. The price is currently trading well below the 18-day moving average of $1,961. Bears are attracted to gold’s gains above $1,979, and prices are likely to reach the 200-day moving average of $1,785 in the coming weeks. This week’s bearish candle confirms the continuation of the selling wave.
On the daily chart, a “bearish cross” formation occurred on June 20, with the 9-day moving average crossing below the 18-day moving average. This suggests that gold is likely to continue its current collapse and may reach the next target at the daily moving average of $1,858.
The 4-hour chart indicates a very weak momentum since June 19th, following gold’s collapse since May 3rd, 2023, when it reached a high of $2,082.77.
Natural Gas Futures Analysis:
The weekly chart of natural gas futures on June 22 indicated the possibility of a sharp reversal as a “bullish cross” formation appears to be forming. The 9-day moving average is ready to cross above the 18-day moving average, given the upcoming summer demand. This provides a strong base for the bulls at $2,448.
A weekly close above $2,767 would confirm this reversal over the coming weeks, and a break above $3,448 would further confirm the reversal.
On the daily chart, prices settled above the significant level of $2.561 on June 22, ensuring a breakout before this week’s close. A weekly open with a higher gap would be the second confirmation of the price’s next breakout, with the next target at the 200-day moving average of $3.982.
The 4-hour chart is indicating a sharp reversal as the “bullish cross” is about to end tonight. The price is still above the daily 200-day moving average since June 14, 2023.
It is important to note that the author of this analysis does not hold any positions in natural gas and gold futures contracts. Readers should open trading positions at their own risk, as both commodities are among the most liquid in the world.
What factors contribute to the bullish sentiment in natural gas futures
This key level and has started to show signs of reversal. The bearish sentiment in gold futures is driven by the strengthening US dollar and rising bond yields, which have reduced the appeal of the precious metal as a safe-haven asset.
However, there are potential catalysts that could reverse the downward trend. First, concerns over the Delta variant of COVID-19 could lead to a flight to safety, benefiting gold as investors seek shelter from market uncertainty. Additionally, any dovish signals from the Federal Reserve regarding interest rates could also support gold prices.
It’s important to note that the longer-term trend for gold futures remains bullish, with strong support around the $1,800 level. Traders should closely monitor key technical levels and upcoming economic data for any signs of a trend reversal.
Natural Gas Futures Analysis:
Natural gas futures have been on a rollercoaster ride in recent weeks, as demand uncertainties and supply disruptions have led to increased volatility. The uncertainty surrounding the Federal Reserve’s potential rate hike has added to the market’s unease.
However, natural gas futures now appear to be breaking out of their consolidation phase and aiming for higher targets. The bullish sentiment is driven by expectations of increased demand as economies continue to recover from the COVID-19 pandemic. Hotter summer temperatures also contribute to higher demand for natural gas as it is used for air conditioning.
Additionally, the supply side dynamics also favor higher natural gas prices. Production cuts by major natural gas producers and declining inventories have helped support prices.
Traders should monitor key technical levels, such as resistance around $3.40 per MMBtu, for a potential reversal or continuation of the upward trend in natural gas futures.
Overall, both gold and natural gas futures are showing volatility and potential reversals. Traders should carefully analyze key technical levels and monitor market events for any signals of a shift in sentiment.