#Gold & #WTI #Crude #Oil Forecast: August 2022
Gold Forecast: August 2022
Ultimately, any signs of exhaustion will be shorted over the course of the month, and really at this point, it’s very likely that we see the market offer plenty of opportunities as it has been so volatile.
- The gold markets have been drifting for quite some time, reaching down to the crucial $1700 area. This is an area that is worth paying quite a bit of attention to for multiple reasons.
- The market has been in a range for a while, and we are pressing the very bottom of it.
- Ultimately, I think this is a situation where we see the market needs to determine whether or not we are going to continue, or if we are going to finally break out of this massive range.
Breaking Through the 200-Week EMA
The 200-week EMA shows signs of support as well, and therefore if we were to break down below that level, it’s likely that this market falls to the $1600 level. After that, then we are looking at a move down to the $1500 level. In fact, if we do break down at this point, it’s very realistic that the momentum could come back into the picture and push this market much lower and quickly.
If we turn around and bounce, the market has a lot of concern between here in $1800 to overcome, and if we were to break above the $1800 level, then it’s possible that we could see this market reach the high of the overall range at the $2000 level. Quite frankly, almost all of this is going to come down to interest rates, as higher interest rates in the United States is like kryptonite for gold. If they start to turn around and fall, that would be the cue for gold to rally. Until then, I do think that gold has a lot of trouble ahead of it until something changes at the Eccles building.
Ultimately, any signs of exhaustion will be shorted over the course of the month, and really at this point, it’s very likely that we see the market offer plenty of opportunities as it has been so volatile. I would keep my position size relatively small because the market will get quite wild at times, and I just don’t see that changing anytime soon as the concerns about a global slowdown continue to be a major issue. The Federal Reserve is likely to remain very tight, so that could cause some issues, therefore it’s likely that we would see a lot of opportunity on short-term charts, most likely in both directions.
WTI Crude Oil Forecast: August 2022
In general, this is a tough time to be trading crude oil.
- The West Texas Intermediate Crude Oil market was all over the place during July
- August probably has more of the same in store for traders.
- There are a lot of concerns when it cmes to the economy, which obviously has a major influence on what happens with oil.
Grappling with the $100 Level
Ultimately, the market is going to continue to struggle with the $100 level, as we are trying to figure out whether or not the US dollar will continue to be a major wrecking ball when it comes to the value of commodities, not to mention the fact that there are a lot of concerns when it comes down to whether or not there’s going to be enough demand. In an environment where the global economy could be slowing down, then the demand for crude oil will drop right along with it.
From a technical analysis standpoint, it’s worth noting that we are sitting just above the 50-week EMA, but just below a previous uptrend line. That might be a clue, as we have broken through enough in the way of trendlines where there is certainly a lot of selling pressure. The question also comes down to the possibility of whether or not we are going to see enough supply as well, as several OPEC countries have decided that they were not going to increase production, so at this point, we are going to see the supply/demand equation get very interesting.
At this point, I am looking at this through the prism of a breakdown through the 50-week EMA. If that happens, then it’s likely that we will continue to go lower, reaching down to the $80 level. I think it’s very likely that we have seen the highs for the year, so I suspect that at best we have sideways action for the month of August, perhaps even more of a “fade the rally” type of scenario. If we recapture the previous uptrend line, then you can make an argument for a bit of a recovery. That being said, I think the next couple of months will remain very volatile, so position sizing will be crucial in order to keep your account somewhat safe. In general, this is a tough time to be trading crude oil.
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