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Commodities volatility pickups, but prices remain range-bound

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Nick Goold

Gold

Gold came under pressure for the first half of the week following lower-than-expected inflation data and a more hawkish-than-expected Fed meeting. The US 10-year interest rate rose to its highest level in three months, helping to push Gold to a new 3-month low.

The weakness proved short-lived as long-term bulls supported Gold, seeing prices recover to end the week unchanged as longer-term charts remained positive. The week ahead sees little data releases that will impact Gold, but all eyes will be on Fed Chairman Powell's testimony to the Senate. The reduction in interest rates by the People's Bank of China last week could support Gold in the coming weeks.

Volatility is increasing, and market participants are looking for the market to break out of the current range. There are arguments for a significant movement in both directions, so looking for over-extended price action to reversal trade remains the best strategy for the coming week.

Gold chart June 19

Resistance: 1984, 2000, 2032, 2050, 2080

Support: 1935, 1925, 1918, 1900, 1889

WTI

WTI enjoyed a positive week, easily holding support at $67 at the start of the week. Expectations of increased Chinese oil demand encouraged buyers to enter the market and maintain the current range from the past month.

According to reports from Russian state news agencies, Nikolai Shulginov, the Russian Energy Minister, stated that achieving oil prices of approximately $80 per barrel is a "realistic" possibility. Shulginov also reiterated Russia's expectations that oil and gas condensate production would decrease by around 20 million tonnes (equivalent to 400,000 barrels per day) this year.

The 10-day moving average remains completely flat, so while short-term momentum is positive, further strength will likely result in heavy selling ahead of resistance at $75. Trading short-term periods like 1 and 5-minute charts will produce the best trading opportunities in the coming week as the medium trend range looks likely to continue.

WTI chart June 19

Resistance: 75.00, 79.00, 82.50

Support: 70.00, 67.00, 65.00, 64.00, 62.00

Great