Gold,WTI Crude Oil & Natural Gas Technical Analysis :05 January 2023

Gold Technical Analysis: Expected to Sell from Levels

During a strong bullish retracement, the XAU/USD gold price is still moving in an upward path.

• Gains reached the $1865 resistance level and the highest price of the yellow metal since mid-June 2022.
• It settled around the $1850 level at the time of writing.
• Yesterday's jump moved the technical indicators towards overbought levels, and the XAU/USD gold price may be exposed to profit-taking sales from the $1865 and $1877 resistance levels.
• Gold price is still stable above the psychological resistance of $1800 an ounce and supportive of bulls controlling the trend.

The return of the XAU/USD gold price movement towards the support levels 1818 and 1775 dollars will be important to change the current bullish outlook. The price of gold may remain in its current range until the reaction from the announcement of the content of the minutes of the last meeting of the US Federal Reserve Bank, and then the US job numbers.

Economic Outlook

US job openings remained elevated in November, highlighting how a flexible labor market is likely to keep the Federal Reserve tilted toward more restrictive policy in the coming months. According to the advertiser, the number of available jobs decreased to 10.46 million from 10.51 million in the previous month, the Labor Department's Job Opportunities and Employment Turnover Survey, or JOLTS, showed on Wednesday. The number was higher than all estimates in a Bloomberg survey of economists.

The numbers point to a still tight US job market, with employers' demand for workers far outstripping supply. Overall employment while moderating, remains flat and layoffs are low. The persistent imbalance continues to put upward pressure on wages and Fed Chairman Jerome Powell has highlighted it as key to the inflation trajectory.

The high number of opportunities coupled with the persistently strong advance in the payroll is likely to reinforce expectations that the Fed will keep US interest rates constrained for some time to quell inflation and ensure price growth is on a sustainable downward trend. Investors will analyze the minutes of the December meeting of policy makers, to help shed light on the central bank's outlook. Separate data showed manufacturing activity in the US contracted for the second month in December, which helped ease price pressures. Employment opportunities have increased in the professional and commercial service sectors as well as manufacturing. Meanwhile, vacancies decreased in the finance, insurance and federal government.

The ratio of jobs available to the unemployed remained elevated at 1.7, little changed from October. It was about 1.2 before the pandemic. Fed officials are watching this ratio closely and have cited the rising number of job vacancies as a reason why the central bank should be able to cool the labor market - and thus inflation - without a subsequent rise in unemployment. However, many economists expect that the Fed's tightening will push the US economy into recession over the next year and increase unemployment somewhat.

The data precedes Friday's monthly US jobs report, which is currently expected to show employers added 200,000 payrolls in December. Economists expect the unemployment rate to stabilize at 3.7% and average hourly earnings to decline somewhat.

WTI Crude Oil Forecast: Continues to See Negativity

The West Texas Intermediate Crude Oil market has fallen rather hard during the trading session on Wednesday, as we have sliced through the $75 level, now it looks like we are trying to get back down to the downside.

• The overall long-term downtrend is very much in play, and therefore think we continue to see sellers come in every time this market rallies.
• The 50-Day EMA has offered significant resistance near the $80 level, so it does make a certain amount of sense that we pulled back the way we have.: Continues to See Negativity

The crude oil market has to worry about the lack of demand around the world as the global economy slows down. This has been the main theme recently, and therefore we continue to see average Bradley sold into. If we break down below the lows, then it looks like the $70 level will get hammered, sending this market much lower. The $70 level has a lot of psychology attached to it, so don’t be surprised to see a huge fight in that general vicinity. However, we break down below there it could open up a huge move to the downside. Ultimately, I think this is a scenario where we have a lot of concerns when it comes to the idea of global demand, as we have seen a lot of slowing down during the last year, therefore it should call for less use of crude oil. Whether or not we continue to go much lower is completely different, but right now it certainly looks as if we are going to see noisy behavior more than anything else.

The FOMC Meeting Minutes comes out late during the day, and if it looks like the Fed is going to remain extraordinarily tight, it’s likely that we would see demand for crude will continue to drop. We also have the jobs number coming out on Friday, which gives us an idea as to whether or not the Federal Reserve will have to continue to be very tight with its monetary policy. In general, it’s not till we break well above the 50-Day EMA that I even begin to question whether or not we can go long. Even then, I would have to see a lot of other fundamental reasons to get moving.

Natural Gas Technical Analysis: The Price is Trying to Recoup Some of its Losses

Early in the day gas prices fell in Europe as a combination of mild weather and lower industrial consumption led to an unusually seasonal build in inventories threatening to flood the storage system.

• Spot natural gas prices (CFDS ON NATURAL GAS) settled on slight gains during its early trading on Thursday, to record new daily losses until the moment of writing this report, by -0.52%.
• It settled at $4.171 per million British thermal units, after rising during yesterday’s trading.
• By 3.50%, to break this rise, a series of losses lasted for four consecutive sessions.

US natural gas futures jumped nearly 5% on Wednesday, after hitting a 10-month low in the previous session, with the price gains coming on expectations of higher-than-expected demand for LNG exports over the next two weeks.

Traders said the biggest uncertainty for the market remains when the Freeport LNG terminal restarts its LNG export plant in Texas.

When Freeport is back up and running, American demand for gas will increase. The plant can convert about 2.1 billion cubic feet of gas into LNG, which is about 2% of daily US production.

Early in the day gas prices fell in Europe as a combination of mild weather and lower industrial consumption led to an unusually seasonal build in inventories threatening to flood the storage system.

Inventories in the European Union and the United Kingdom (EU28) are at the second highest level for this time of year in the past decade and are on track to end the Northern Hemisphere winter at an exceptionally high level.

Natural Gas Technical Analysis

Technically, natural gas tried with its gains yesterday to compensate for part of what it incurred from previous losses. At the same time, it was trying to drain some of its clear selling saturation with the relative strength indicators, especially with the start of a positive crossover in them, considering the dominance of the bearish corrective trend in the short term along the slope line. Negative pressure continued its trading is below the simple moving average for the previous 50-day period.

Therefore, our expectations suggest that natural gas will return to decline during its upcoming trading, as long as it stabilizes below the 4.741 resistance level, to target the pivotal 3.618 support level.

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