Natural Gas Price Forecast – natural gas markets explode to the upside

Natural gas markets have exploded to the upside, reaching towards the $2.85 level. What’s been even more impressive is that we not only reached that level, but we have broken above it. Obviously, now is not the time to jump in and trying to chase the trade. A short-term pullback should be a nice buying opportunities though, especially near the $2.83 level, or perhaps the $2.85 level. I think that chasing the trade up at these high levels would be very difficult. Markets don’t move in one direction forever, but certainly they should offer plenty of opportunities.

If we broke down below the $2.83 level, then I think we would probably drop down to the $2.80 level next. However, I think that there is plenty of buying opportunities underneath, and that we will eventually go looking towards the $3.00 level, an area that has been massive resistance in the past. I look at this as a nice short-term buying opportunity on dips, but I will not hesitate to turn things around at the $3.00 level and start shorting as I anticipate that we are not ready to break out of the range quite yet. Interestingly enough, the EIA has announced that US natural gas production has hit a new record during the month of May. Because of this, I think it’s only a matter of time before the fundamentals get in the way, not just the technical resistance that we see above. We’ve been range bound for some time, so you should be able to take advantage of it.

NATGAS Video 06.08.18

Gold Price Forecast – Gold markets explode to the upside on Friday

Gold markets broke down for most of the week, but Friday was very bullish. We reached towards the $1220 level, an area that offered a lot of supply. The market looks likely to roll over a bit here, but longer-term charts show that there is a lot of support underneath. This is especially true near the $1200 level, and the weekly candle that we are forming is a hammer. Pullbacks at this point should be buying opportunities, and I think that the value hunters are starting to come back in into this market.

If we can break above the $1225 level, we then should continue to go higher. I believe that the market will continue to be very noisy, but I also believe that the closer we get to the $1200 level, the more likely we are to have plenty of value hunters. I think that the market breaking below the $1200 level would be very destructive, and it would break down the gold market overall. I don’t think that the market is good to be easy to deal with, so keep that in mind. I’d be somewhat quick to take profits if I have a lot of leverage on, but physical traders may be looking to pick up value all along this core door of trading that we have seen.

Gold Price Forecast Video 06.08.18

Natural Gas Price Prediction – Prices Surge as Inventories Drop

Natural gas prices surged higher by slightly less than 1.5% on Friday, as warmer than normal weather is forecast to cover most of the United States for the next 8-14 days.  The warm temperatures will increase cooling demand just as inventories have reached critical levels.  On Thursday the Department of Energy reported that stocks increased by 35 Bcf compared to the 40 Bcf expected by analysts.  Inventories are now below the 5-year average range while prices remain below the 5-year average price of natural gas at 3.14.  Prices fell short of taking out resistance near the 50-day moving average at 2.87. Support is seen near the 10-day moving average at 2.78.  Momentum on natural gas prices is positive as the MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. The fast stochastic generated a crossover buy signal which points to accelerating positive momentum.

Natural Gas Supplies Remain Unchanged

The EIA reported this week that natural gas production was unchanged notching up an average total supply of 86.7 Bcf per day. Dry natural gas production remained constant week over week, according to the Department of Energy. Average net imports from Canada decreased by 4% from last week.

The EIA also reported that May set a fresh record of production.  In their short-term production report the EIA revealed that May 2018 dry natural gas production averaged 80.4 Bcf per day which was the highest level since EIA began tracking dry natural gas production in 1973. The previous record was 79.5 Bcf per in March 2018 according to the EIA report.

Demand falls

Total U.S. consumption of natural gas fell by 1% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 4% week over week as temperatures moderated somewhat in the Southwest. Industrial sector consumption stayed constant, averaging 19.9 Bcf per day according to the EIA report. In the residential and commercial sectors, consumption increased by 8% but remains a minor source of consumption during the summer months. Natural gas exports to Mexico increased 2%.

Gold Price Prediction – Gold Rallies Generating Outside Day Following Soft Payroll Report

Gold prices rebounded on Friday following a weaker than expected U.S. payroll report that put downward pressure on the dollar paving the way for higher gold prices. Gold generated an outside day which is a higher high, a lower low and a higher close. An outside day usually occurs as the top or bottom of a trend. The outside day could be creating a bottom for gold, but prices were unable to pierce through resistance near the 10-day moving average at 1,221. A close above this level would lead to a test of target resistance near the 50-day moving average at 1,258. Support is seen near the August lows at 1,204 which coincides with the July 2017 lows at the same level. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which reflects consolidation.  The fast stochastic is printing a reading just below 15, which is below the oversold trigger level of 20 and could foreshadow a correction.

Jobs Data was Softer than Expected

On Friday the U.S. Labor Department reported that non-farm payrolls increased by 157K jobs, less than the 190K expected. The unemployment rate dipped to 3.9% which was in line with expectations. Average hourly earnings, which is a key gauge of wage inflation, increased 2.7% which was also in line with expectations. Last months payroll report showed a revision which increased the number of jobs produced. Overall, traders were less than enthusiastic about the jobs report, which helped put downward pressure on yields. Lower yields allowed the dollar to ease paving the way for a rebound in gold prices.

On the trade front, China said it plans to retaliate and increase tariffs on approximately 60 billion of U.S. imports.  The central bank also reinstated a 20% reserve ratio for financial institutions conducting FX forward transactions, to help ease the downward pressure on the yuan.

Crude Oil Price Update – Trend Down, but Confirming Yesterday’s Reversal Shifts Momentum to Upside

U.S. West Texas Intermediate crude oil futures are trading lower shortly before the cash market opening on Friday. There has been no follow-through to the upside following yesterday’s 2-percent gain.

At 1203 GMT, September WTI crude oil futures are trading $68.67, down $0.31 or -0.45%.

Yesterday’s rally was fueled by low-volume short-covering tied to expectations of a decline in inventory at the Cushing, Oklahoma delivery hub. Today’s weakness is being fueled by concerns over increased production and worries that China may slap sanctions on imported U.S. crude oil.

WTI Crude Oil
Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier in the week when sellers took out the last swing bottom at $67.56. However, momentum may be getting ready to shift to the upside following Thursday’s reversal bottom. A trade through $69.36 will confirm the chart pattern.

The main trend changes to up on a trade through $70.43. A move through $66.92 will signal a resumption of the downtrend. Taking out the main bottom at $66.29 will indicate the selling pressure is getting stronger.

The main range is $62.99 to $72.98. Its retracement zone at $67.99 to $66.81 is support. This zone is controlling the longer-term direction of the market.

The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is the first resistance zone. This zone stopped the rally earlier this week at $70.43.

This week’s range is $70.43 to $66.92. Its 50% level or pivot is $68.68. This price level appears to be controlling the direction of the market today.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the September WTI crude oil futures contract is likely to be determined by trader reaction to the pivot at $68.68.

A sustained move over $68.68 will indicate the presence of buyers. This move will gain momentum buyers can overtake yesterday’s high at $69.36. The next targets are $69.64, $70.42 and $70.43. The latter is the trigger point for an acceleration to the upside.

A sustained move under $68.68 will signal the presence of sellers. This could trigger a break back to $67.99.

Taking out $67.99 with rising volume could trigger an acceleration into $66.92, $66.81 and the main bottom at $66.29. This is a potential trigger point for an acceleration to the downside.

Gold Price Futures (GC) Technical Analysis – August 3, 2018 Forecast

Short-covering and position-squaring ahead of the U.S. Non-Farm Payrolls report has helped gold recover from early session weakness that drove the precious metal to its lowest level in more than a year. The market is currently in a position to turn higher for the session, but still remains in a position to close lower for a four straight week.

At 1130 GMT, December Comex Gold futures are trading $1220.50, up $0.40 or +0.04%.

At 1230 GMT, the U.S. will release its latest Non-Farm Payrolls report. The Non-Farm Employment Change is expected to show an increase of 190K. The unemployment rate is expected to decline to 3.9% and Average Hourly Earnings are expected to come in at 0.3%, up from 0.2%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, the prolonged move down in terms of price and time has put the market in the window of time for a closing price reversal bottom. This chart pattern will not change the trend, but it will indicate the buying is greater than the selling at current price levels. This could lead to a 2 to 3 day counter-trend rally.

A trade through $1220.10 will put the market in a position to post a reversal bottom, while a move through $1212.50 will signal a resumption of the downtrend.

The minor trend is down. A trade through $1237.80 will change the minor trend to up and shift momentum to the upside.

The current short-term range is $1244.70 to $1212.50. Its 50% level or pivot at $1228.60 is the first upside target.

The current main range is $1278.20 to $1212.50. If the trend changes to up then look for a possible test of its retracement zone at $1245.40 to $1253.20.

Daily Technical Forecast

Based on the early trade, the direction of the December Comex Gold futures contract today is likely to be determined by trader reaction to yesterday’s close at $1220.10.

A sustained move under $1220.10 will indicate the presence of sellers. This could lead to a re-test of the intraday low at $1212.50. Taking out this level with conviction will indicate the selling is getting stronger. The daily chart is wide open to the downside under $1212.50 with the main bottom at $1162.00 the next major target.

A sustained move over $1220.10 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the downtrending Gann angle at $1226.70. This is followed by the short-term pivot at $1228.60.

Look for a technical bounce on the first test of $1228.60. Overtaking it, however, could trigger an acceleration into the next downtrending Gann angle at $1235.70, followed by the minor top at $1237.80.

Price of Gold Fundamental Daily Forecast – U.S. Jobs Report Expected to Have Little Impact on Gold Prices

Sellers continue to pressure gold prices early Friday on the strength of the U.S. Dollar. Gold is now trading at its lowest level in more than a year after taking out the July 19 bottom at $1221.00 the previous session. Given the current downside momentum, it’s not going to take much to put an $1100 handle on this market with the next major support coming in at about $1162.00.

At 0725 GMT, December Comex Gold is trading $1214.30, down $5.80 or -0.48%.

The current price action strongly suggests that hedge funds and money managers are increasing their net short bets on gold futures. However, we won’t know for sure until the Commodity Futures Trading Commission releases its latest data.

For the week, gold is down more than 1 percent and in a position to post its fourth straight weekly decline.

Forecast

Gold should remain under pressure as long as the U.S. Dollar continues to rise. Gold is a dollar-denominated asset so when the dollar goes up, foreign demand for gold goes down.

Longer-term, the dollar is being supported by expectations of rising interest rates in the United States. This week’s hawkish U.S. Federal Reserve monetary policy statement strongly supports the notion for at least two more rate hikes this year and possibly three more in 2019 before normalization takes place.

Short-term, the dollar is being driven higher by safe-haven buying tied to the escalation in trade tensions between the United States and China.

Earlier this week, President Trump proposed additional tariffs on China to force them to the negotiating table, but China vowed on Thursday to retaliate if the United States acted on the threat to raise tariffs on the Asian nation’s exports, fueling fears in financial markets that the trade war between the world’s two biggest economies would escalate.

Later today at 1230 GMT, the U.S. will release its latest Non-Farm Payrolls report. The Non-Farm Employment Change is expected to show an increase of 190K. The unemployment rate is expected to decline to 3.9% and Average Hourly Earnings are expected to come in at 0.3%, up from 0.2%.

I don’t expect the report to have much of an impact on gold prices unless the headline number and average hourly earnings completely miss the mark. If there is a reversal in gold prices, it will be fueled by short-covering and profit-taking. Given the current price action, I don’t expect to see a big buyer in gold at this time. There are just too many other places to invest at this time that actually make money.

Oil Price Fundamental Daily Forecast – Aggressive Hedgers Betting on Drop in U.S. Inventories

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are inching lower early Friday, following Thursday’s steep rise. Traders said yesterday’s nearly 2 percent rise was fueled by aggressive hedge buying tied to an industry report suggesting domestic crude stockpiles would soon decline again after a surprise rise in the latest week.

At 0653 GMT, September WTI crude oil is trading $68.93, down $0.03 or -0.04% and October Brent crude oil is at $73.40, down $0.05 or -0.07%.

Traders said prices rallied early in the session when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma delivery hub for U.S. crude, dropped 1.1 million barrels since Friday, July 27.

Helping to push prices lower earlier this week have been a combination of factors. On Wednesday, prices plunged when the U.S. Energy Information Administration reported that in the week-ending July 27, total U.S. inventories rose 3.8 million barrels, while supplies at Cushing fell 1.3 million barrels.

Throughout the week, gains were limited and prices pushed lower on concerns about oversupply. Recently, Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production to help compensate for an anticipated shortfall in Iranian crude supplies once U.S. sanctions take effect and to stabilize prices to prevent a global economic slowdown, which would lower demand.

Forecast

September WTI crude oil has been essentially rangebound since the July 10 top at $72.98. Based on the mid-June to mid-July trading range, the 50% to 61.8% retracement zone is $67.99 to $66.81. The market has been straddling this zone since the July 18 bottom at $66.29. Yesterday’s low occurred inside this zone.

The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 stopped the rally earlier this week at $70.43.

The price action suggests the fundamentals are balanced at this time especially with the production loss from the Iranian sanctions being offset by the output increases from Saudi Arabia and other non-OPEC producers.

The market is not expected to remain rangebound or balanced for long, however. There are potential escalation events that could trigger a huge move to the upside, or a huge move to the downside. All the charts are indicating is that volatility is coming, but they are not indicating direction.

One particularly bullish factor showed up on Thursday in the form of an expected drop in U.S. inventories. The next is a little more speculative. It concerns possible military exercises by the Iranian navy in the Gulf.

On the bearish side, an escalation of trade tensions between the United States and China could force China to impose additional duties on oil and refined products imported from the U.S. This would lead to a drop in demand and a possible increase in U.S. inventories.

Natural Gas Price Fundamental Daily Forecast – Major Hedgers May Show Up Inside $2.831 to $2.869

Natural gas futures are edging higher early Friday after spiking to the upside the previous session following the release of the weekly government storage report.

At 0554 GMT, September natural gas futures are trading $2.821, up $0.005 or +0.18%.

Natural gas futures prices jumped Thursday after a government report showed a smaller-than-expected storage build.

The U.S. Energy Information Administration announced a storage build of 35 Bcf in the week-ended July 27, raising U.S. inventories to 2.308 Tcf. Total stocks are 688 Bcf now below inventories one year ago and 565 Bcf under the five-year historical average.

Short-Term Weather Forecast

According to NatGasWeather.com for August 3 to August 8, “A cool front with showers and thunderstorms will stall across the east-central U.S. another day with comfortable highs of 70s to lower 80s for lighter demand. Hot upper high pressure continues to dominate most of the West and South with highs of 90s to 110F, hottest from California to Texas, although cooling this weekend over the Northwest & California. Hot high pressure will expand across the eastern half of the U.S. Friday through Tuesday with 90s gaining ground for increasing national demand, then easing last next week as weather systems return. Overall, demand will swing between moderate and high.”

Intermediate-Term Weather Forecast

The most recent six-to 10-day temperature forecast from the National Weather Service calls for warmer-than-average temperatures for much of the United States, but temperatures have backed off in the Pacific Northwest and Southwest compared with the intense heat the regions faced in late July.

Natural Gas
Daily September Natural Gas

Forecast

As we’ve been saying all week, the technical chart pattern and the fundamentals are in sync this week. Earlier in the week, the September natural gas futures contract found resistance at $2.831 to $2.869 when the bearish news came out and it found support at $2.751 to $2.732 when the bullish news was released.

The direction of the market over the near-term will be determined by trader reaction to these zones.

We currently have a tricky and highly speculative situation on our hands. Inventories the last four weeks have come in below expectations and heat has lingered, but the nearby futures contract hasn’t rallied much. This is because the major hedgers aren’t too worried about the storage deficit at this time of the year because they believe that cooler weather is coming and with that lower demand. At the same time, they believe that record production will then shrink the storage deficit ahead of the winter season that begins on November 1.

The rally we are witnessing is being fueled by aggressive hedge fund buying driving out the weaker short-sellers. These buyers are betting on a warmer-than-average August to hold demand steady and offset the production rises.

Gold hits New 2018 Lows for Second Consecutive Trading Session

Gold prices were little changed early Friday, having hit a one-year low in the previous session on a resilient U.S. dollar. Spot Gold XAUUSD continues to move on a steady downtrend path touching new 2018 lows on two back to back sessions at $1207.20 on Tursday and $1206.62 on Friday respectively. XAUUSD is currently trading at $1207.97 up 0.02% while US Gold Futures GCcv1 is trading at $1216 an ounce down 0.33% in Asian hours today. For the week, the precious metal was down more than 1 percent, in what could be its fourth straight weekly drop. The dollar stayed firm against the yuan and a basket of currencies after reaching two weeks high as worries about an escalation in trade tensions between the United States and China supported US Greenback. Support for gold disappeared as a stronger U.S. dollar weighed on investor appetite. The greenback was also supported by strong U.S. economic data and outlook for higher interest rates. Higher U.S. rates tend to boost the greenback, in which the metal is priced. Most recent data suggests continued weakness for gold amid a stronger US Greenback.

Precious Metals Lose Luster As Sino-Us Trade War Woes Add Support To USD Bulls

Meanwhile, Asian stocks were under pressure from the latest exchange of trade threats between Beijing and Washington. China vowed on Thursday to retaliate if the United States acted on a threat to raise tariffs on the Asian nation’s exports, fueling fears in financial markets that the trade war between the world’s two biggest economies would escalate. All precious metals are currently headed for weekly losses. Silver market also saw steady decline this week, however the loss in silver was significantly higher when compared to gold. Silver hit this week’s low at $15.216 while the week’s high was at $15.602 which is a 2.475 decrease in value. Spot silver XAGUSD is currently trading at $15.301 with 0.09% decrease in value.

Saudi Arabia is cutting the September official selling prices (OSPs) for all its grades and to all markets except for to the United States, as it aims to entice more buyers as it increases oil supply to offset production and export disruptions elsewhere. The cut in Arab Light prices for September was the second consecutive monthly reduction of the OSP to Asia. In July, while it was opening the taps, Saudi Arabia also cut its official OSPs for most of its grades to the Asian markets for August, in a sign that it wants to attract more customers now that it has raised production. In the coming months, if monthly U.S. production figures continue to show output undershooting expectations, that would have global ramifications. Most analysts still are baking in strong U.S. shale growth figures into their forecasts. If that additional output fails to materialize, the oil market could end up being a lot tighter than we all expected it to be. As of writing this article WTIUSD is trading at $69.67/b seeing 0.17% decrease in value.

Silver Price Forecast – Silver markets fail to hang onto gains on Thursday

Silver markets initially tried to rally during the day on Thursday but found the $15.50 level a bit too expensive and rolled over to struggle overall. I believe that the market will probably continue to be very noisy between now and the jobs number, and quite frankly silver is a bit too volatile for my liking to try to predict what happens next with money. I believe at this point the one thing you can probably count on is a lot of noise. I think at this point, if we can break above the $15.65 level, the market could go higher, perhaps reaching towards $15.80 next, and then perhaps even the $16.15 level.

I believe that the $15 level underneath is massive support, and it should be thought of as a bit of a “floor” in the market. However, with the jobs number coming out today it’s likely that the market will continue to jump around quite a bit. The value of the US dollar will be a huge influence on where we go next, so keep that in mind. I believe that you should pay attention to the EUR/USD pair, as it is the easiest barometer to measure US dollar strength. If it starts to rally, this pair will probably fall. Of course, the opposite is true as it would show the US dollar losing strength, and therefore it should help precious metals overall.

SILVER Video 03.08.18

Crude Oil Price Forecast – crude oil bounces from significant support

WTI Crude Oil

The WTI Crude Oil market found plenty of support at the $67 level to turn around and bounce over one dollar from the lows. Because of this, it looks as if we are going to continue to stay within the range, between the $67 level on the bottom and the $70 level on the top. I think that the jobs number will of course push this market around as well, but I think we are starting to find an area that buyers are willing to step in and lift this market. That doesn’t mean it’s good to be an easy long to take, but the uptrend line has to add significance to the support at $67.

Brent

Brent markets also fell during the day, only to find support at the $72 level. By doing so, the market has turned around of form a bit of a hammer like candle, and it looks as if a bounce is imminent. If we bounce from here, I think it will be difficult to break above the $75 level, so what we could see is simple back and forth trading. Overall, if we break down below the bottom of the hammer for the day, then we could go to the $71 level, possibly even the $70 level after that which should be even more supportive. In fact, I think both of these markets have a lot of support underneath, so I believe it’s only a matter time before value hunters turn things around.

Crude Oil Forecast Video 03.08.18

Natural Gas Price Forecast – natural gas rises for Thursday

Natural gas markets continue to be very noisy but have seen a significant amount of buying pressure on Thursday more than anything else. This is a market that looks likely to be very noisy as per usual, but I think that if we can clear the $2.85 level, we could continue to go higher, perhaps even reaching as high as $3.00 where I see a significant amount of supply. However, the $2.85 level won’t necessarily be easy to break. We have gotten a bit overextended during the last 24 hours, so at the end of the day I would not be surprised at all to see the jobs number slap this thing around significantly.

I believe plenty of support is to be found near the $2.75 level, and of course the $2.70 level which is the beginning of the longer-term support region. This is a market that needs to be scalped and cannot be held onto for a long amount of time from what I see on this chart, as it takes very little to turn it around. Longer-term, I still believe that natural gas will lack pricing power, because quite frankly there is far too much in the way of supply out there longer-term to dictate that natural gas should be an expensive form of energy. That doesn’t mean we won’t get short-term rallies, perhaps going on for a couple of weeks, but at the end of the day I think we are still in the consolidation region you see on your chart.

NATGAS Video 03.08.18

Gold Price Forecast – Gold markets fail to hold onto gains during Thursday

Gold markets have drifted a bit during the trading session on Thursday, reaching down towards the $1215 region. The market has significant support at the $1210 level, but even more at the $1200 level as far as I can see. I think that it is only a matter of time before the markets turn around and bounce from here, and I think that it could be a nice buying opportunity if you are patient enough to wait for it. In the short term though, I think that rallies will probably continue to be sold off, as gold simply cannot get out of its own way.

Selling rallies on short-term charts might continue to be the best way between now and $1200, but I think that the volatility will continue to be stomach churning. With the jobs number coming out today, it’s very likely that we will continue to see continued bouncing around, but I suspect that any flush lower at this point will probably be met with buying pressure. If we were to break down below the $1200 level, it’s very likely that we could break down rather significantly from that point. Ultimately, this is a market that I think will be very lucrative for the longer-term trader, but they obviously need some type of stability to start buying. Again though, if we break down below the $1200 level, then I think we are looking at another $200 to the downside, which of course would be a nice long term trade as well. The next couple of days should be crucial for gold.

Price of Gold Video 03.08.18

Natural Gas Price Prediction – Gas Rallies 2% Following Lower than Expected Inventory Build

Natural gas prices surged more than 2% on Thursday following a weaker than expected rise in natural gas inventories. Prices were also buoyed by warmer than normal weather which is expected to cover most of the United States for the next 8-14 days, which should increase cooling demand which will increase the need to increase electricity driven by natural gas turbines.  Manufacturing data released on Thursday somewhat reversed the negative manufacturing report released by the ISM on Wednesday.

Technicals

Natural gas prices surged higher, rising 2% and poised to test last week highs at 2.83.  A break through that level would lead to a test of the 50-day moving average at 2.87. Prices reversed through former resistance now support near the 10-day moving average at 2.77. Momentum is mixed. While the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory pointing to accelerating positive momentum, the fast stochastic is moving sideways, pointing to consolidation.

Storage Levels are Subdued

The Department of Energy reported on Friday that natural gas in storage was 2,308 Bcf as of Friday, July 27, 2018. The EIA reported that this represents a net increase of 35 Bcf from the previous week. Expectations according to Estimize was for an increase in stocks of 40 Bcf. The EIA report that stocks were 688 Bcf less than last year at this time and 565 Bcf below the five-year average of 2,873 Bcf. At 2,308 Bcf, total working gas is below the five-year historical range. The 5-year average of natural gas is 3.14 mmbtu, and given the current level of inventories prices should be higher.

Manufacturing Data is Solid

Additionally, Factory orders increased by 7% according to the Commerce Department. This data point is in shows old data which has already been incorporated into the GDP release which showed that U.S. economy growing at 4.1%.

Crude Oil Price Update – In Position to Cross to Bearish Side of Major Retracement Zone

September West Texas Intermediate crude oil futures are trading lower Thursday, pressured by yesterday’s bearish U.S. Energy Information Administration’s bearish inventories report and concerns that a prolonged trade war would lead to an economic slowdown and lower demand.

WTI Crude Oil
Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $67.56 on Wednesday turned the main trend down. The downtrend was reaffirmed earlier today. If the downside momentum continues then look for the selling to possibly extend into the July 18 main bottom at $66.29.

The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance. This zone stopped the rally earlier in the week at $70.43.

The main range is $62.99 to $72.98. The market is currently testing its retracement zone at $67.99 to $66.81. This zone is also controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September WTI crude oil market the rest of the session will be determined by trader reaction to the main Fibonacci level at $66.81.

Holding $66.81 will indicate the return of buyers. If they are able to create enough upside momentum, we could see a short-covering rally into the main 50% level at $67.99. Sellers could come in on the first test of this level. However, look for the short-covering rally to strengthen if buyers can overcome $67.99.

A sustained move under $66.81 will indicate the presence of sellers. This could trigger a quick break into the main bottom at $66.29. This is the trigger point for an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the June 18 main bottom at $62.99 the next major target.

Gold Price Futures (GC) Technical Analysis – August 2, 2018 Forecast

Gold prices are under pressure on Thursday and in a position to take out the July low amid flight-to-safety buying in the U.S. Dollar. This is leading to a drop in demand from foreign investors for the dollar-denominated asset.

At 1200 GMT, December Comex gold is trading $1226.50, down $5.00 or -0.41%.

A sell-off in the U.S. stock indexes due to renewed concerns over the escalating trade dispute between the U.S. and China is sending money into the safety of the U.S. Dollar. If this continues throughout the day then look for gold to make a new multi-year low.

Yesterday’s hawkish U.S. Federal Reserve monetary policy statement, which indicates the central bank is likely to raise rates at least two more times this year, is also keeping a lid on gold prices and encouraging some selling of the non-interest-paying asset.

Comex Gold
Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1221.00 will signal a resumption of the downtrend. This could trigger an acceleration to the downside since the next main bottom is $1169.00. The main trend will change to up on a move through $1244.70.

The minor trend is also down. A trade through $1237.80 will change the minor trend to up.

The short-term range is $1221.00 to $1244.70. Its 50% level or pivot is controlling the direction of the market today.

The main range is $1278.20 to $1221.00. If the trend changes to up then its retracement zone at $1249.60 to $1256.40 becomes the next upside target.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the December Comex gold market is likely to be determined by trader reaction to the 50% level at $1232.90.

A sustained move under $1232.90 will indicate the presence of sellers. Taking out $1222.60 will indicate the selling is getting stronger. Breaking through $1221.00 will signal a resumption of the downtrend. This could trigger a steep plunge. The daily chart shows there is plenty of room to the downside with the next major target $1169.00.

Holding $1221.00 will signal the presence of buyers. This move will be meaningless, however, unless buyers can overcome the pivot at $1232.90. If this occurs then look for a stair-step rally with potential resistance levels at $1237.80, $1244.60 and $1244.70.

Look for the trend to change to up on a move over $1244.70, but also watch for sellers to return on a test of $1249.60 to $1256.40.

Natural Gas Price Fundamental Daily Forecast – EIA Estimate 43 BCF; Market Firms Over $2.751, Weakens Under $2.732

Natural gas futures are edging lower early Thursday, shortly before the regular session opening and the release of the weekly government storage report at 1430 GMT. The weakness is being fueled by a combination of technical and fundamental factors.

At 0828 GMT, September natural gas futures are trading $2.745, down $0.013 or -0.47%.

Let’s take a look at the chart since technical factors are playing an equal role in the market’s weakness as much as the fundamentals.

The main range is formed by the June high at $2.992 to the July low at $2.671. Its 50% to 61.8% retracement zone at $2.831 to $2.869 is the primary upside target and resistance. The lower or 50% level at $2.831 stopped the buying on Tuesday.

The short-term range is $2.671 to $2.831. Its retracement zone at $2.751 to $2.732 is the primary downside target. This zone is currently being tested. Since the short-term trend is up based on the higher-high, higher-low chart pattern, buyers are likely to show up inside this zone.

Fundamentally, sellers are reacting to reports of record-level production and the potential for cooler temperatures after mid-month.

The U.S. Energy Information Administration (EIA) on Tuesday updated its monthly production data, showing U.S. natural gas output for May, setting a new all-time record. The EIA said May 2018 production averaged 80.4 Bcf/d (2,491 Bcf total), an 8.6 Bcf/d (12%) increase year/year (y/y) and the highest total recorded by the agency for data going back to 1973.

Short-Term Weather Outlook

According to NatGasWeather.com, “The latest weather data held cooler trends from Tuesday with a weather system tracking across the U.S. Midwest and Northeast August 8-10, and was also a touch cooler going into mid-August, thus seen cooler trending overall as it shred several cooling degree days (CDD).”

“Beyond next week, a weather system is expected to weaken the ridge over the Midwest and Northeast August 8-10, dropping highs into the 70s and 80s as showers sweep through for lighter demand; this is where the latest weather data during the last 24 hours has shown cooler trends,” NatGasWeather said.

“The weather data had been bouncing between warmer and cooler trends August 11-15, but has been a little cooler more recently. It’s still expected to be a very warm pattern August 11-15 as upper high pressure rebounds to dominate most of the country with highs of 80s to 100s, just slightly less impressive compared to what the data was showing early in the week,” NatGasWeather said.

Forecast

The EIA production data and the short-term weather forecast is putting the pressure on the market. The weather is likely to change, but the production is likely to remain steady to higher. Therefore, we don’t expect any major rallies over the near-term, but we could see a rangebound trade with support at $2.751 to $2.732 and resistance at $2.831 to $2.869. Additional support is the bottoms at $2.685 and $2.671.

Estimates for today’s EIA storage report are coming in at around 43 Bcf. Kyle Cooper of IAF Advisors is projecting a 40 Bcf build, while a Bloomberg survey had a range between 25 Bcf and 58 Bcf, with the median response of survey participants coming in at 43 Bcf. Intercontinental Exchange settled at 43 Bcf.

Based on the early price action, we could see an upside bias developing on a sustained move over $2.751 and for a downside bias to develop on a sustained move under $2.732.

Price of Gold Fundamental Daily Forecast – Price Action Suggests Fed News Was Fully-Priced into Market

Gold futures are trading lower early Thursday, remaining inside yesterday’s range and Tuesday’s wide range. This indicates investor indecision and impending volatility. Traders seem to be respecting Tuesday’s technical reversal bottom at $1222.60 and the July 19 main bottom at $1221.00.

At 0749 GMT, December Comex gold futures are trading $1225.70, down $1.90 or -0.15%.

Traders showed almost no response to Wednesday’s U.S. Federal Reserve interest rate decision and monetary policy statement. This is probably because both were widely expected. The Federal Reserve concluded a two-day meeting on monetary policy and left interest rates unchanged. The decision was widely expected, but the central bank upgraded its view on the economy calling it “strong”.

The Fed’s assessment of the economy and its hawkish Federal Reserve statement, raised the chances of a September interest rate hike to 91.4 percent and the probability for another move in December to 68.2 percent.

This news drove U.S. Treasury yields higher while highlighting the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish major central banks, making the U.S. Dollar a more attractive investment. However, this didn’t seem to rattle gold traders, once again supporting the notion that expectations of higher interest rates may already be priced into the market.

Forecast

If gold prices didn’t move much yesterday with the Fed news then I don’t think we’ll see much movement today. U.S. economic reports today include the Challenger Job Cuts, Weekly Unemployment Claims and Factory Orders. None of these reports should be strong enough to move the dollar or gold very much. I also suspect that gold traders will try to keep their powder dry ahead of Friday’s U.S. Non-Farm Payrolls report.

Once again, I want to mention that the money managers and hedge funds are net short gold for the first time since 2016. The latest data incorporates the July 19 bottom at $1221.00. It’s a little too early to tell, but the selling pressure may have exhausted that day, setting up the possibility of a short-covering rally over the near-term. The trend changes to up on a trade through $1244.70, while a move through $1221.00 will signal the resumption of the downtrend.

Oil Price Fundamental Daily Forecast – Rising Production, Trade Dispute Fears Likely to Continue to Weigh on Prices

Profit-taking and position-squaring is helping to boost U.S. West Texas Intermediate and international-benchmark Brent crude oil futures early Thursday after two days of heavy selling pressure. However, the move isn’t convincing enough to chase the bulk of the short-sellers out of the market, who may be banking on mounting concerns over trade friction between the U.S. and China to drive prices lower.

At 0721 GMT, September WTI crude oil is trading $67.67, up $0.01 or +0.01% and October Brent crude oil is at $72.62, up $0.23 or +0.30%.

Crude oil futures were driven sharply lower on Wednesday after the U.S. Energy Information Administration said U.S. crude inventories rose 3.8 million barrels the week-ending July 27 as imports jumped. Analysts were looking for a decline of 2.8 million barrels.

There were some bullish elements in the report, which may have been enough to slow down the selling. Gasoline stocks declined by 2.5 million barrels and crude stocks at the Cushing, Oklahoma, futures delivery hub for WTI crude oil, dropped by 1.3 million barrels, according to the EIA.

Forecast

Technical factors may play a role in today’s price action with WTI futures testing a potential support area at $67.99 to $66.81. We could see increased short-covering on a sustained move over $67.99 and a potential acceleration to the downside under $66.81.

As for Brent futures, the early April to late May range is $65.29 to $79.37. Currently, the October futures contract is testing its 50% level at $72.33. Its 61.8% level is $70.67. This zone is controlling the longer-term direction of the futures contract.

Also today, traders will continue to monitor the escalating trade dispute between the United States and China. They’ll be looking to see how China responds, if at all, to the latest round of threats from the Trump administration.

So far the impact of the trade dispute hasn’t shown up in U.S. economic data so the reaction in the crude oil market has been diminished. However, the weakness does indicate that investors are becoming concerns especially during this period of increased production.

Last month Iraq exported 3.543 million barrels per day of crude from its southern ports, above the June average, the oil ministry said on Wednesday.

Russian oil minister Alexander Novak said that higher production was needed to maintain the market’s stability. This after his department announced above average production in July.