Natural Gas Rebounds After Strong Sell-Off

Key Insights

• Natural gas found support near $7.50 and rebounded towards $7.80.
• Oil markets remain extremely volatile. 
• Gold is trying to get back above the $1675 level despite strong dollar and higher Treasury yields. 

Natural Gas Tests Resistance At $7.80

Natural gas markets rebound after strong sell-off.  It looks that the recent pullback was too strong, and some traders were ready to buy the dip.

Currently, natural gas is trying to settle back above the $7.80 level. In case this attempt is successful, natural gas will move towards the resistance at $8.00. A successful test of this level will push natural gas towards the 50 EMA at $8.30. If natural gas climbs above $8.30, it will head towards the next resistance, which is located at the 20 EMA at $8.50.

On the support side, natural gas needs to get back below the $7.80 level to have a chance to gain downside momentum in the near term. The next support level for natural gas is located at $7.65. If natural gas declines below this level, it will head towards the support at $7.50.

WTI Oil Failed To Settle Below $82.50

WTI oil rebounded from session lows and moved back towards the $85 level as oil markets remained volatile ahead of the Fed Interest Rate Decision, which will be released on Wednesday.

Recession worries continue to put pressure on commodity markets. At the same time, oil traders know that OPEC+ countries are not able to meet their production quotas. In August, the gap between actual production and quota levels reached 3.58 million bpd. While OPEC+ has recently raised its quotas, its members cannot produce at higher levels. These production problems have somewhat offset weaker demand.

From a big picture point of view, oil markets remain in a downside trend, and it remains to be seen whether they are ready to find a bottom near current levels.

Silver Pulls Back Below $19.50

Silver found itself under pressure at the start of the week as U.S. dollar moved higher. From a big picture point of view, silver is trying to settle in the wide $19 – $20 range. In case this attempt is successful, silver will have a chance to gain additional upside momentum and move above the $20 level.

Meanwhile, gold is trying to get back above the $1675 level. However, stronger dollar and higher Treasury yields will continue to put pressure on gold markets. Platinum managed to gain upside momentum and moved towards $920, while palladium tested the $2000 level.

Copper Markets Lack Momentum At The Start Of The Week

Copper markets remain stuck near the $3.50 level as traders wait for additional catalysts. Recession worries and stronger dollar have recently put material pressure on copper markets.

However, copper enjoys strong support in the $3.40 – $3.50 area, and it looks that traders will wait for the Fed Interest Rate Decision.

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