Gold Retreats As U.S. Dollar Moves Higher

Key Insights

• Gold and other precious metals remain under pressure at the start of the week. 
• WTI oil moves lower as traders react to the disappointing economic data from China. 
• Natural gas rebounds as LNG demand increases.

Gold Tests Support At $1640

Gold continues its attempts to settle below the support level at $1640 as U.S. dollar rallies at the start of the week. Treasury yields have also moved higher, putting additional pressure on gold markets.

In case gold settles below the $1640 level, it will head towards the next support at $1615. A successful test of the support at $1615 will push gold towards the support at $1590. If gold declines below $1590, it will move towards the support level at $1575.

On the upside, gold needs to get back above the $1640 level to have a chance to gain upside momentum in the near term. The next resistance level for gold is located at the 20 EMA at $1660. In case gold climbs back above the 20 EMA, it will head towards the resistance at $1675.

Other precious metals have also found themselves under pressure at the start of the week. Silver has recently made another attempt to settle below the support at the $19.00 level. Platinum settled below the $950 level, while palladium tested multi-month lows near $1800.

Wheat Pulls Back From Highs As Grain Ships Sail

Wheat is in spotlight today as Russia has suspended its participation in the grain deal after a drone attack on its ships.

Wheat prices have jumped at the start of the trading session but lost momentum and pulled back as reports indicated that ships were still moving grain from Ukrainian ports.

The situation remains unclear, and traders should be prepared for fast moves in the upcoming trading sessions. At this point, it looks that wheat prices will carry an additional risk premium in the near term.

WTI Oil Is Under Pressure As Traders Focus On The Disappointing PMI Data From China

WTI oil moved lower after China PMI reports missed expectations and indicated that Chinese economy was under material pressure due to coronavirus-related measures.

Currently, WTI oil is trying to settle below the support level at $86.20. In case this attempt is successful, WTI oil will move towards the next support level, which is located at $85.00.

Natural Gas Rebounds As LNG Demand Rises

Natural gas settled back above the $6.00 level and made an attempt to settle above the resistance at $6.30 as traders reacted to higher demand from Cove Point LNG export plant.

In Europe, natural gas prices rallied at the start of the trading sesion but lost momentum and pulled back. Traders prepare for higher demand during the winter season so European natural gas prices are 25% higher than the recent lows.

Copper Settled Below The $3.40 Level

Copper markets have moved lower and settled below the $3.40 level after the release of the disappointing economic data from China.

China’s zero-COVID policy will likely continue to put pressure on the economic activity in the upcoming months, which is bearish for copper.

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