Natural Gas Moved Back Above The $5.00 Level

Key Insights

• Natural gas rebounded as traders took some profits off the table after the recent sell-off.

• Precious metals declined as Treasury yields moved higher.

• Copper pulled back after an unsuccessful attempt to settle above the $3.50 level.

Natural Gas Rebounds After Strong Sell-Off

Natural gas found support at $4.75 and moved above the resistance at $5.10 amid profit-taking after the major sell-off.

The weather forecast remains unfavorable for high natural gas consumption, but it has no impact on price dynamics today as natural gas markets were oversold.

The nearest significant resistance level for natural gas is located at $5.35. In case natural gas settles above this level, it will move towards the next resistance at $5.70. A successful test of this level will push natural gas towards the resistance at $6.00.

On the support side, natural gas needs to settle back below $5.10 to have a chance to gain downside momentum in the near term. The next support level for natural gas is located at $4.90. If natural gas declines below this level, it will move towards the support at the recent lows at $4.75.

WTI Oil Remains Volatile

WTI oil has recently made an attempt to settle above $85.50 but lost momentum and pulled back towards the $84.50 level as traders remained worried about the slowdown of the world economy.

Today‘s PMI reports highlighted the slowdown in developed economies. The data from China was more optimistic as the country’s third-quarter GDP grew 3.9% quarter-over-quarter, but the weak Retail Sales report showed that the economic situation remained challenging.

From a big picture point of view, WTI oil is trying to stabilize in the $83 – $86 range. In case this attempt is successful, WTI oil will have a decent chance to gain upside momentum if it manages to settle above the $86 level.

Gold Declines As Treasury Yields Move Higher

Gold declined below the $1650 level as the yield of 30-year Treasuries tested new highs. The yields of shorter-term Treasuries have also moved higher today despite disappointing PMI reports from the U.S.

Other precious metals have also found themselves under pressure. Silver made an attempt to settle above $19.50 but lost momentum and pulled back towards the $19.00 level. Platinum declined towards $930, while palladium moved towards the support level at $1965.

Copper Faced Strong Resistance Near $3.50

Copper moved back below the $3.45 level as traders focused on recession risks. Recession risks will remain the key negative catalyst for copper in the upcoming months as copper markets are extremely sensitive to changes in the economic outlook.

From a big picture point of view, copper is stuck in the wide range between the support at $3.25 and the resistance at $3.60. Most likely, copper will need significant catalysts to get out of this range.