Natural Gas Tests New Highs While WTI Oil Remains Under Pressure

Key Insights

• Natural gas prices gain ground as the upside trend remains strong. 
• WTI oil is trading near multi-month lows on worries about Iran nuclear deal. 
• Precious metals are losing ground as Treasury yields rise. 

Natural Gas

Natural gas prices have recently made an attempt to settle above $9.35, inspired by the strong rally in the European natural gas markets. In Europe, severe drought continues to put pressure on power generation.

The current weather forecast calls for moderate natural gas demand for the week, and it remains to be seen whether the rally will continue without additional support from the weather.

WTI Oil

WTI oil is trading near multi-month lows as traders wait for news about the Iran nuclear deal. Worries about the potential increase of Iranian exports continue to put pressure on oil markets.

In addition, today’s disappointing economic data from the EU highlighted recession risks in the Eurozone. In case traders remain focused on recession risks, oil prices will continue to move lower.

Gold

Gold managed to get out of the recent $1790 – $1800 range and is testing the support at the 20 EMA near $1770. The U.S. dollar is flat against a broad basket of currencies, but rising Treasury yields put some pressure on precious metals.

Meanwhile, S&P 500 is testing new highs after strong reports from Home Depot and Walmart. The appetite for risk is growing, which is bearish for gold. In case gold manages to settle below the 20 EMA, it will gain additional downside momentum and move towards the $1750 level.

Silver

Silver has recently made an attempt to settle below the $20.00 level as higher yields and growing appetite for risk put pressure on precious metals.

In addition, recession worries continue to serve as a significant bearish catalyst for silver, which is dependent on industrial demand. A move below the $20.00 level will push silver towards the next support level at $19.80.

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