#Gold & #WTI #CrudeOil Forecast (28 JULY 2022)

Gold Forecast: Hanging onto Major Support Region

I believe this is a market that will continue to struggle in the face of higher interest rates, and of course, the fact that there are a lot of concerns out there when it comes to global growth in general.

Gold markets have been relatively quiet as we awaited the Federal Reserve meeting on Wednesday. That being said, we have seen a lot of noise in the general vicinity, and now it’s a question as to whether or not we can get some type of clarity for a longer-term outlook before gold can settle everything out. After all, the Federal Reserve continues to be very tight with its monetary policy and did in fact raise interest rates by 75 basis points as anticipated.

When you look at the charts, it’s easy to see that the $1700 level has been important over the last couple of years, so the fact that we have bounced from there should not be a huge surprise. The question now is whether or not we can break it back down below it? If we do, then the gold market will be more likely than not to drop all the way down to the $1500 level over the next several months. That being said, we have some work to do before that happens. In fact, we need to break it down through the $1680 level, as the $1700 support level is basically “$20 thick.”

Rallies at this point will have to deal with the $1750 level, an area that I think is going to be a bit difficult to overcome. At this point, even if we broke above there, I think it’s likely that we would see this market struggle to go much higher, with the $1800 level above being a major barrier that will be very difficult to get past. We have the large, round, psychological significance of the number, we have the major selling area there as well, as well as the previous trendline and the 50 Day EMA. With everything said, I believe this is a market that will continue to struggle in the face of higher interest rates, and of course, the fact that there are a lot of concerns out there when it comes to global growth in general. The US dollar has been like a wrecking ball over the last several months, and I think that will continue to be the main theme here, as this market will continue to pay close attention to the headwinds that the greenback causes this market.

WTI Futures Extend Sideways Move Supported by 200-SMA

I’d be looking to fade short-term rallies, but I would not get married to any position.

The West Texas Intermediate Crude Oil market has been somewhat tight Wednesday as we continue to see the oil markets worry about multiple issues at the same time. Because of this, I anticipate that we will have a lot of back and forth, probably very choppy action as we try to sort the future direction out.

WTI oil futures (September delivery) have been losing ground since early June when the price failed to surpass the 121.00 mark. However, a further decline has been rejected multiple times by the 200-day simple moving average (SMA) and the price has currently adopted a rangebound pattern.

The 200-day EMA is sitting just below and rising, so it does make a certain amount of sense that we would continue to see it show a bit of dynamic support. The market has been grinding higher over the longer term, but the reality is that this market has recently seen a lot of negativity enter. The 200 day EMA is starting to flat now, so the question now is whether or not the trend is trying to change. The 50 Day EMA is just below the $110 level and dropping.

Another thing that you have to pay close attention to above is the $100 level, as it should offer dynamic and psychological resistance. The noisy and choppy behavior can probably be written off as the idea of a recession coming and of course the possibility of supply issues at the same time. Demand should drive, but at the same time, there are questions as to whether or not supply can keep up. The market is likely to see a lot of significant pressure in both directions, so it’s likely that we would see the most obvious trade as more of a “fade the rally” type situation on short-term charts. In other words, I’d be looking to fade short-term rallies, but I would not get married to any position.

If we break down below the $90 level, that would be a collapse of the market, but I don’t see that happening easily. That being said, if we did see that happen, the market could drop down to the $80 level. Do not forget the US dollar component to this as well, because of the US dollar search the strength and quite drastically, that in and of itself could put a bit of downward pressure here. Either way, it’s not until we break above the $105 level that I would consider going long, and even then, I’d feel better once we recovered the previous uptrend line.

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