• Gold price consolidates in a tight range above $2,400 early Wednesday, awaiting Fed Minutes.
• The US Dollar steadies alongside US Treasury bond yields, as risk sentiment remains tepid.
• Bullish RSI on the daily chart continues to keep Gold buyers hopeful.

Gold price is trading back and forth in a tight range above $2,400 early Wednesday, consolidating the previous losses. Gold traders await the Minutes of the US Federal Reserve (Fed) May policy meeting for fresh trading impetus.  

Gold price defends $2,400, as Fed Minutes loom

Having kicked off the week on a positive, Gold price retreated from record highs of $2,450, now entering a phase of downside consolidation. Investors assess the implications of the recent cautious stance on inflation and interest rate outlooks, adopted by several Fed officials after April Consumer Price Index (CPI) data from the US fuelled rate cut expectations.

However, bets for aggressive Fed rate cuts this year trimmed significantly after several Fed policymakers this week, raised concerns about the sustainability of the disinflation trend, implying that rates are likely to remain higher for longer.

On Tuesday, Atlanta Federal Reserve President Raphael Bostic said that he is “expecting inflation to decline but relatively slowly, would not expect a rate cut before the fourth quarter.” Fed Governor Christopher Waller noted that he needs to see several more months of good inflation data before being comfortable to support an easing in policy.

In early Asia on Wednesday, Cleveland Fed President Mester said that keeping rates restrictive is not that concerning right now, given the strength of the jobs market. Meanwhile, Boston President Susan Collins said that “patience is the right policy for the Fed.”

The Fedspeak leaning in favor of maintaining a restrictive bias continues to keep Gold buyers on the back foot even though the US Dollar trades broadly subdued, tracking the directionless US Treasury bond yields.

Markets refrain from placing fresh directional bets on the US Dollar and the Gold price, anticipating a potential hawkish surprise from the upcoming Fed Minutes. In the lead-up to the FOMC Minutes, more Fedspeak and the mid-tier US Existing Home Sales data will entertain traders.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price is traversing in a potential five-week-long rising wedge formation.

Meanwhile, the 14-day Relative Strength Index (RSI) has turned south but holds in the positive territory, currently near 64.50, suggesting that there is a good chance of a ‘dip-buying’ trade in Gold price.

However, Gold price needs to yield a daily closing above the upside barrier of the wedge at $2,450 to iniate a sustained uptrend. That level is the lifetime high for Gold price.

Recapturing the latter could expose the upside toward the $2,500 level.

However, if Gold buyers fail to regain lost momentum, a fresh drop toward the May 17 low of $2,374.

The next downside target is seen at $2,350, the confluence of the 21-day Simple Moving Average (SMA) and lower boundary of the potential rising wedge pattern.

The last line of defense of Gold buyers is seen at the 50-day SMA at $2,304.

 

• Gold price consolidates in a tight range above $2,400 early Wednesday, awaiting Fed Minutes.
• The US Dollar steadies alongside US Treasury bond yields, as risk sentiment remains tepid.
• Bullish RSI on the daily chart continues to keep Gold buyers hopeful.

Gold price is trading back and forth in a tight range above $2,400 early Wednesday, consolidating the previous losses. Gold traders await the Minutes of the US Federal Reserve (Fed) May policy meeting for fresh trading impetus.  

Gold price defends $2,400, as Fed Minutes loom

Having kicked off the week on a positive, Gold price retreated from record highs of $2,450, now entering a phase of downside consolidation. Investors assess the implications of the recent cautious stance on inflation and interest rate outlooks, adopted by several Fed officials after April Consumer Price Index (CPI) data from the US fuelled rate cut expectations.

However, bets for aggressive Fed rate cuts this year trimmed significantly after several Fed policymakers this week, raised concerns about the sustainability of the disinflation trend, implying that rates are likely to remain higher for longer.

On Tuesday, Atlanta Federal Reserve President Raphael Bostic said that he is “expecting inflation to decline but relatively slowly, would not expect a rate cut before the fourth quarter.” Fed Governor Christopher Waller noted that he needs to see several more months of good inflation data before being comfortable to support an easing in policy.

In early Asia on Wednesday, Cleveland Fed President Mester said that keeping rates restrictive is not that concerning right now, given the strength of the jobs market. Meanwhile, Boston President Susan Collins said that “patience is the right policy for the Fed.”

The Fedspeak leaning in favor of maintaining a restrictive bias continues to keep Gold buyers on the back foot even though the US Dollar trades broadly subdued, tracking the directionless US Treasury bond yields.

Markets refrain from placing fresh directional bets on the US Dollar and the Gold price, anticipating a potential hawkish surprise from the upcoming Fed Minutes. In the lead-up to the FOMC Minutes, more Fedspeak and the mid-tier US Existing Home Sales data will entertain traders.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price is traversing in a potential five-week-long rising wedge formation.

Meanwhile, the 14-day Relative Strength Index (RSI) has turned south but holds in the positive territory, currently near 64.50, suggesting that there is a good chance of a ‘dip-buying’ trade in Gold price.

However, Gold price needs to yield a daily closing above the upside barrier of the wedge at $2,450 to iniate a sustained uptrend. That level is the lifetime high for Gold price.

Recapturing the latter could expose the upside toward the $2,500 level.

However, if Gold buyers fail to regain lost momentum, a fresh drop toward the May 17 low of $2,374.

The next downside target is seen at $2,350, the confluence of the 21-day Simple Moving Average (SMA) and lower boundary of the potential rising wedge pattern.

The last line of defense of Gold buyers is seen at the 50-day SMA at $2,304.

 

Oil prices dropped on Wednesday due to an unexpected build in U.S. inventories and concerns over high U.S. interest rates. This marks the fourth consecutive session of decline, fueled by fears of weak demand and reduced geopolitical tensions in the Middle East. Additionally, optimism about China’s economic recovery has cooled.

The American Petroleum Institute reported a 2.5 million barrel increase in U.S. oil inventories for the week ending May 17, contrary to expectations. This unexpected build raised concerns about sluggish oil demand. Traders are wary that persistent inflation and high interest rates will curb demand, despite the upcoming travel-heavy summer season.

• Gold price consolidates in a tight range above $2,400 early Wednesday, awaiting Fed Minutes.
• The US Dollar steadies alongside US Treasury bond yields, as risk sentiment remains tepid.
• Bullish RSI on the daily chart continues to keep Gold buyers hopeful.

Gold price is trading back and forth in a tight range above $2,400 early Wednesday, consolidating the previous losses. Gold traders await the Minutes of the US Federal Reserve (Fed) May policy meeting for fresh trading impetus.  

Gold price defends $2,400, as Fed Minutes loom

Having kicked off the week on a positive, Gold price retreated from record highs of $2,450, now entering a phase of downside consolidation. Investors assess the implications of the recent cautious stance on inflation and interest rate outlooks, adopted by several Fed officials after April Consumer Price Index (CPI) data from the US fuelled rate cut expectations.

However, bets for aggressive Fed rate cuts this year trimmed significantly after several Fed policymakers this week, raised concerns about the sustainability of the disinflation trend, implying that rates are likely to remain higher for longer.

On Tuesday, Atlanta Federal Reserve President Raphael Bostic said that he is “expecting inflation to decline but relatively slowly, would not expect a rate cut before the fourth quarter.” Fed Governor Christopher Waller noted that he needs to see several more months of good inflation data before being comfortable to support an easing in policy.

In early Asia on Wednesday, Cleveland Fed President Mester said that keeping rates restrictive is not that concerning right now, given the strength of the jobs market. Meanwhile, Boston President Susan Collins said that “patience is the right policy for the Fed.”

The Fedspeak leaning in favor of maintaining a restrictive bias continues to keep Gold buyers on the back foot even though the US Dollar trades broadly subdued, tracking the directionless US Treasury bond yields.

Markets refrain from placing fresh directional bets on the US Dollar and the Gold price, anticipating a potential hawkish surprise from the upcoming Fed Minutes. In the lead-up to the FOMC Minutes, more Fedspeak and the mid-tier US Existing Home Sales data will entertain traders.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price is traversing in a potential five-week-long rising wedge formation.

Meanwhile, the 14-day Relative Strength Index (RSI) has turned south but holds in the positive territory, currently near 64.50, suggesting that there is a good chance of a ‘dip-buying’ trade in Gold price.

However, Gold price needs to yield a daily closing above the upside barrier of the wedge at $2,450 to iniate a sustained uptrend. That level is the lifetime high for Gold price.

Recapturing the latter could expose the upside toward the $2,500 level.

However, if Gold buyers fail to regain lost momentum, a fresh drop toward the May 17 low of $2,374.

The next downside target is seen at $2,350, the confluence of the 21-day Simple Moving Average (SMA) and lower boundary of the potential rising wedge pattern.

The last line of defense of Gold buyers is seen at the 50-day SMA at $2,304.

 

Natural Gas Rally Faces Potential Near-Term Consolidation

Natural gas futures have pulled back in early trading on Tuesday, raising questions about the sustainability of the recent rally that has dominated trading this month. Despite a strong opening to the week, overnight data showing cooler trends for the 7-15 day forecast period may contribute to the current selloff. Over the past three weeks, natural gas prices have surged by over 80¢. Continued rallying would depend on major market players anticipating tighter supplies as surpluses shrink in the coming months.

Weather Forecast Highlights Regional Variability

According to NatGasWeather for May 21-27, Texas will experience highs in the 90s to 100s, cooling into the 80s and 90s midweek before heating up again over the weekend. The southern third of the U.S. will remain warm to hot, with highs in the 80s and 90s, locally reaching the 100s in the Southwest. The Ohio Valley and East are expected to warm into the upper 80s to low 90s on Tuesday and Wednesday, with the northern two-thirds of the U.S. remaining comfortable from Thursday through next week.

Technical Indicators Suggest Overbought Conditions

June natural gas futures have rallied over 40% in May, pushing technical indicators into overbought territory. This significant rise over the past week suggests that the market may be nearing the end of a short-covering fueled rally. Traders should watch for signs of a potential consolidation or correction in the near term.

Market Forecast: Bearish Near-Term Outlook

Given the recent price action and overbought technical indicators, a near-term correction in natural gas prices is likely. Profit-taking and cooler weather forecasts are contributing to the current pullback. However, the longer-term trend remains bullish, driven by expectations of tighter supplies. Traders should prepare for potential volatility and a short-term bearish outlook while keeping an eye on fundamental factors that could influence the market’s direction.

Technical Analysis

Most are based on the Henry Hub, Louisiana contract, meaning you’re trading US weather. And as somebody who lives in the northeastern part of the United States, I can assure you the weather is not stable. So therefore, you get these massive moves. There are also concerns about natural gas supply in Europe, again. So that means that they may be coming over to Louisiana to pick up their gas.

And it just remains to be seen. But we also have geopolitical concerns and everything else to worry about. Quite frankly, this is a market that’s overextended. So, for myself, I sold off some of my ETF position a couple of days ago, willing to buy in again down here, taking the leverage out. Natural gas is not something you want a lot of leverage in, because a sudden spike in temperature in the summertime can cause something like this, just as the markets can completely collapse, like we’ve seen a couple of times over the last couple of years.

So, protect your account. If you’re going to trade natural gas, do so with a low leverage. Use an ETF if you have the ability. If not, then a small CFD position should suffice because quite frankly, this is a market that can just rocket in either direction. I’m looking for support underneath to add to my position in the ETF and take advantage of what should be a longer term move, but we could see a move all the way down to $2, and I would still be very interested.

For a look at all of today’s economic events, check out our economic calendar.

• Gold price retreats further from the new all-time-high of $2,450 set on Monday.
• The US Dollar extends rebound with US Treasury bond yields, as risk sentiment sours.
• Downside appears limited for Gold, as RSI stays bullish on the daily chart.
• The focus shifts to more Fedspeak for policy cues and the next Gold price move.

Gold price extends pullback from the lifetime high of $2,450 set on Monday, as the US Dollar (USD) draws haven demand amid broad risk aversion. Attention again turns toward upcoming speeches from the Federal Reserve (Fed) policymakers that dominate early this week, in the absence of top-tier US economic events.

Gold price retreats ahead of more Fedspeak

The week set off with a bunch of Fed officials taking up the rostrum, adopting a cautious stance on the inflation and interest rate outlook. The Fedspeak suggested that even though rate cuts remain on the table later this year, expectations for 75 basis points (bps) rate cuts waned significantly.

Cleveland Fed President Loretta Mester warned on Monday that “inflation risks are tilted to the upside,” adding that she no longer thinks three rate cuts in 2024 are appropriate. San Francisco Fed President Mary Daly said that while she expects shelter inflation to slowly improve, the Fed policymaker doesn’t expect progress to be quick.

Fed Vice Chair for Supervision Michael Barr said that the Fed is in a good position to hold the policy steady and watch the economy, per Reuters. Meanwhile, Fed Vice Chair of the Board of Governors Phillip Jefferson noted that it was too early to tell if the recent slowdown in the disinflationary process will be long-lasting.

These cautious remarks helped the US Dollar find demand due to easing bets of aggressive Fed rate cuts while also fuelling a rebound in the US Treasury bond yield. Gold price, thus, retraced from fresh record highs.

Gold price jumped to $2,450, a new all-time high, after reports Iran’s President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian died in a helicopter crash in Iran’s East Azerbaijan province hit wires in the Asian hours on Monday.

In Tuesday’s trading so far, risk-aversion keeps the safe-haven flows into the US Dollar intact, exerting further selling pressure on Gold price. Markets turn cautious ahead of a slew of speeches from Fed policymakers, including Vice Chair John Williams and Governor Christopher Waller.

Also, Gold traders also refrain from placing fresh positions ahead of Wednesday’s Fed Minutes and Nvidia earnings results, which could have a signficant impact on risk sentiment and the value of the US Dollar.

Gold price technical analysis: Daily chart

As observed on the daily chart, the 14-day Relative Strength Index (RSI) has turned south but holds above the midline to currently hover near 62.60, suggesting that the downside appears limited for Gold price.

Gold buyers must find acceptance above the record high of $2,441 if the $2,450 psychological level needs to be taken out.

A sustained move above the latter could open doors for a fresh rally toward $2,500.

However, if Gold sellers need to defend the $2,400 round figure. Failure to do so could trigger a fresh drop toward Friday’s low of $2,374.

The next downside target is seen at the 21-day Simple Moving Average (SMA) at $2,344.

 

• Gold price retreats further from the new all-time-high of $2,450 set on Monday.
• The US Dollar extends rebound with US Treasury bond yields, as risk sentiment sours.
• Downside appears limited for Gold, as RSI stays bullish on the daily chart.
• The focus shifts to more Fedspeak for policy cues and the next Gold price move.

Gold price extends pullback from the lifetime high of $2,450 set on Monday, as the US Dollar (USD) draws haven demand amid broad risk aversion. Attention again turns toward upcoming speeches from the Federal Reserve (Fed) policymakers that dominate early this week, in the absence of top-tier US economic events.

Gold price retreats ahead of more Fedspeak

The week set off with a bunch of Fed officials taking up the rostrum, adopting a cautious stance on the inflation and interest rate outlook. The Fedspeak suggested that even though rate cuts remain on the table later this year, expectations for 75 basis points (bps) rate cuts waned significantly.

Cleveland Fed President Loretta Mester warned on Monday that “inflation risks are tilted to the upside,” adding that she no longer thinks three rate cuts in 2024 are appropriate. San Francisco Fed President Mary Daly said that while she expects shelter inflation to slowly improve, the Fed policymaker doesn’t expect progress to be quick.

Fed Vice Chair for Supervision Michael Barr said that the Fed is in a good position to hold the policy steady and watch the economy, per Reuters. Meanwhile, Fed Vice Chair of the Board of Governors Phillip Jefferson noted that it was too early to tell if the recent slowdown in the disinflationary process will be long-lasting.

These cautious remarks helped the US Dollar find demand due to easing bets of aggressive Fed rate cuts while also fuelling a rebound in the US Treasury bond yield. Gold price, thus, retraced from fresh record highs.

Gold price jumped to $2,450, a new all-time high, after reports Iran’s President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian died in a helicopter crash in Iran’s East Azerbaijan province hit wires in the Asian hours on Monday.

In Tuesday’s trading so far, risk-aversion keeps the safe-haven flows into the US Dollar intact, exerting further selling pressure on Gold price. Markets turn cautious ahead of a slew of speeches from Fed policymakers, including Vice Chair John Williams and Governor Christopher Waller.

Also, Gold traders also refrain from placing fresh positions ahead of Wednesday’s Fed Minutes and Nvidia earnings results, which could have a signficant impact on risk sentiment and the value of the US Dollar.

Gold price technical analysis: Daily chart

As observed on the daily chart, the 14-day Relative Strength Index (RSI) has turned south but holds above the midline to currently hover near 62.60, suggesting that the downside appears limited for Gold price.

Gold buyers must find acceptance above the record high of $2,441 if the $2,450 psychological level needs to be taken out.

A sustained move above the latter could open doors for a fresh rally toward $2,500.

However, if Gold sellers need to defend the $2,400 round figure. Failure to do so could trigger a fresh drop toward Friday’s low of $2,374.

The next downside target is seen at the 21-day Simple Moving Average (SMA) at $2,344.

 

• Gold price retreats further from the new all-time-high of $2,450 set on Monday.
• The US Dollar extends rebound with US Treasury bond yields, as risk sentiment sours.
• Downside appears limited for Gold, as RSI stays bullish on the daily chart.
• The focus shifts to more Fedspeak for policy cues and the next Gold price move.

Gold price extends pullback from the lifetime high of $2,450 set on Monday, as the US Dollar (USD) draws haven demand amid broad risk aversion. Attention again turns toward upcoming speeches from the Federal Reserve (Fed) policymakers that dominate early this week, in the absence of top-tier US economic events.

Gold price retreats ahead of more Fedspeak

The week set off with a bunch of Fed officials taking up the rostrum, adopting a cautious stance on the inflation and interest rate outlook. The Fedspeak suggested that even though rate cuts remain on the table later this year, expectations for 75 basis points (bps) rate cuts waned significantly.

Cleveland Fed President Loretta Mester warned on Monday that “inflation risks are tilted to the upside,” adding that she no longer thinks three rate cuts in 2024 are appropriate. San Francisco Fed President Mary Daly said that while she expects shelter inflation to slowly improve, the Fed policymaker doesn’t expect progress to be quick.

Fed Vice Chair for Supervision Michael Barr said that the Fed is in a good position to hold the policy steady and watch the economy, per Reuters. Meanwhile, Fed Vice Chair of the Board of Governors Phillip Jefferson noted that it was too early to tell if the recent slowdown in the disinflationary process will be long-lasting.

These cautious remarks helped the US Dollar find demand due to easing bets of aggressive Fed rate cuts while also fuelling a rebound in the US Treasury bond yield. Gold price, thus, retraced from fresh record highs.

Gold price jumped to $2,450, a new all-time high, after reports Iran’s President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian died in a helicopter crash in Iran’s East Azerbaijan province hit wires in the Asian hours on Monday.

In Tuesday’s trading so far, risk-aversion keeps the safe-haven flows into the US Dollar intact, exerting further selling pressure on Gold price. Markets turn cautious ahead of a slew of speeches from Fed policymakers, including Vice Chair John Williams and Governor Christopher Waller.

Also, Gold traders also refrain from placing fresh positions ahead of Wednesday’s Fed Minutes and Nvidia earnings results, which could have a signficant impact on risk sentiment and the value of the US Dollar.

Gold price technical analysis: Daily chart

As observed on the daily chart, the 14-day Relative Strength Index (RSI) has turned south but holds above the midline to currently hover near 62.60, suggesting that the downside appears limited for Gold price.

Gold buyers must find acceptance above the record high of $2,441 if the $2,450 psychological level needs to be taken out.

A sustained move above the latter could open doors for a fresh rally toward $2,500.

However, if Gold sellers need to defend the $2,400 round figure. Failure to do so could trigger a fresh drop toward Friday’s low of $2,374.

The next downside target is seen at the 21-day Simple Moving Average (SMA) at $2,344.

 

Oil prices declined in early Asian trading on Tuesday, with expectations of sustained U.S. inflation and higher interest rates dampening consumer and industrial demand.

Both benchmarks fell less than 1% on Monday as Federal Reserve officials awaited clearer signs of slowing inflation before considering rate cuts. Analysts noted fears of weaker demand due to delayed rate cuts.

Interim Higher Price Targets from ABCD Pattern

Nevertheless, there is no assurance the higher targets will be reached. Interim price targets include 2.80 and 2.86. They are derived from the 2.5% and 261.8% extensions of the rising ABCD pattern, respectively. Another price level of 2.88 is marked from the June 2023 swing high. Although all previous potential targets from the rising ABCD pattern have been exceeded during the current rally, a top in natural gas will be found at some point, and it may match with an ABCD target.

The ABCD pattern looks to identify price symmetry between the second CD leg of the advance and the initial AB leg. Symmetry first occurs when the price appreciation in each advance matches. Subsequently, Fibonacci ratios are used to identify extended targets for the CD leg. For example, for the 261.8% target, the price distance of the AB leg is multiplied by the Fibonacci ratio to derive a target of 2.86.

Relative Strength of Current Rally

The current rally of 73.5% is well above the prior two greatest advances since the first bottom of the downtrend in February 2023. There were four prior larger rallies from 34.7% to 53.9%. The current advance of 73.5% clearly exceeds the previous rallies. This points to a likely change in character as natural gas further shows strength and provides signs of a transition from a downtrend to an uptrend, in which case the 3.00 price zone becomes more likely to be reached.

For a look at all of today’s economic events, check out our economic calendar.

Production Declines and Maintenance

A significant driver of the bullish sentiment in natural gas markets is the decline in domestic production. Leading producers like EQT and Chesapeake Energy have postponed well completions and reduced drilling activities in response to earlier price drops, contributing to an approximate 9% production decrease in 2024. Additionally, the near-full service return of the Freeport LNG plant in Texas has elevated gas flows to LNG export facilities, tightening supply further.

Record High Gas Flows to Freeport LNG

Natural gas flowing to Freeport LNG’s export plant in Texas hit a five-month high, according to LSEG data. This increase followed the return of a liquefaction train after a brief upset. U.S. gas futures at the Henry Hub benchmark have soared by around 59% over the past three weeks, partly due to increased feedgas at Freeport following an outage in late April.

As of Friday, gas flows to the seven major U.S. LNG export plants rose from an average of 11.9 billion cubic feet per day (bcfd) in April to 12.7 bcfd in May, with Freeport’s 2.1-bcfd plant contributing significantly.

EIA Report and Inventory Levels

June natural gas prices saw significant gains, supported by a U.S. Energy Information Administration (EIA) report showing a smaller-than-expected increase in natural gas inventories. For the week ending May 10, inventories rose by 70 billion cubic feet (bcf), short of the forecasted 76 bcf and the five-year average of 90 bcf. Despite this, total natural gas inventories were still up 17.5% year-on-year and 30.8% above the five-year seasonal average.

Lower-48 states’ dry gas production on Thursday was reported at 98.3 bcf per day, marking a 2.1% year-on-year decline, according to Bloomberg New Energy Finance (BNEF). Concurrently, gas demand in these states stood at 64.4 bcf per day, a 2.7% decrease from the previous year. LNG exports from U.S. terminals were at 13.2 bcf per day, up 4.0% week-on-week, indicating robust international demand.

Market Forecast

Given the current market conditions—reduced storage increases, lower production, and strong LNG exports—natural gas futures are likely to maintain their upward trend in the short term. However, potential cooler weather could temper this bullish outlook by reducing immediate demand for natural gas. Traders should remain vigilant regarding inventory reports and weather forecasts to navigate this volatile market effectively.