WTI Oil Gives Up Yesterday’s Gains

Key Insights

• WTI oil retreats as protests in Iraq do not threaten oil production. 
• Gold settles below the $1730 level as stronger dollar and higher Treasury yields put pressure on precious metals. 
• Copper tests support at $3.55 as traders stay focused on recession risks. 

WTI Oil Is Under Strong Pressure

WTI oil moved back towards the $93 level as yesterday’s protests in Iraq did not lead to instability in the country. There is no danger for oil production so traders decided to take profits after yesterday’s rally.

Meanwhile, commodity markets found themselves under broad pressure as the U.S. dollar moved closer to yearly highs. Stronger dollar and rising Treasury yields triggered worries about the strength of economic growth, which was bearish for oil markets.

Natural Gas Markets Test Support At $9.00

Natural gas prices are trying to settle below the $9.00 level as the pullback in the European markets continues. The above-mentioned recession worries serve as an additional bearish catalyst for U.S. natural gas markets.

Russia’s Gazprom has recently notified France’s Engie that it will reduce natural gas deliveries over a contract dispute. Interestingly, this move did not provide more support to European natural gas prices. At this point, traders believe that Europe will reach the required levels of natural gas in storage ahead of winter, which serves as a bearish catalyst.

In the U.S., traders will continue to monitor the developments in the European natural gas markets. In addition, they will stay focused on the economic growth outlook. In case markets stay worried about recession risks, natural gas prices will have a good chance to settle below the $9.00 level.

Gold Retreats As Treasury Yields Rise

Strong dollar and rising Treasury yields put additional pressure on gold prices, which moved below the support level at $1730. In case gold settles below this level, it will head towards the next support at $1715. A successful test of the support at $1715 will push gold towards the support at $1700. If gold declines below $1700, it will move towards the support at the yearly lows at $1680.

On the upside, a move above the $1730 level will push gold towards the resistance at the 20 EMA at $1755. If gold settles back above the 20 EMA, it will head towards the 50 EMA at $1770.

Silver, which is sensitive to economic outlook, is currently trying to settle below $18.50. Gold/silver ratio has reached yearly highs near the 94 level, and the pressure on silver markets remains strong. Platinum declined towards the $830 level, while palladium retreated to the $2075 level.

Copper Declines As Traders Focus On Recession Risks

Copper keeps moving lower amid a broad sell-off in commodity markets. Currently, copper is trying to settle below the support level at $3.55. In case this attempt is successful, copper will gain additional downside momentum. RSI remains in the moderate territory, so there is enough room to gain additional momentum in case the right catalysts emerge.

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