We expect natural gas to decline during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) rose in their recent trading at the intraday levels, to achieve daily gains until the moment of writing this report, by 3.73%, after falling in yesterday’s trading by -7.03%.

Natural gas futures fell on Tuesday to extend the sell-off seen in the previous week. Prices were affected by the mid-July delay from hot weather patterns in the US and expectations of another strong inventory reading.

Nymex August gas futures settled at $5.523 per million British thermal units, down 20.7 cents on the day, and the September contract was down 22.5 cents at $5.487.

In a report published on Tuesday, the Paris-based International Energy Agency projected that global demand for natural gas would rise by 140 billion cubic meters between 2021 and 2025. This is less than half the increase of 370 billion cubic meters seen in the previous five-year period. , which included the period of the epidemiological downturn.

The revised forecast is mostly due to expectations of slower economic growth rather than buyers switching from gas to coal, oil or renewable energy. While gas flaring emits less carbon dioxide than other fossil fuels, the methane released during the extraction process is an important driver of climate change.

The International Energy Agency said that the efforts of EU countries to break away from Russian gas will lead to a 55-75% decrease in pipeline exports from Russia to the 27-nation bloc. Meanwhile, EU purchases of LNG have shifted deliveries to other regions such as Asia, which are expected to account for half of demand growth by 2025.

The agency attributed the rise in natural gas prices to supply concerns about the war in Ukraine, which will slow the growth of demand for fossil fuels in the coming years.

Technically, the price is trying in its early trading for today to compensate for part of what it incurred from previous losses, supported by the influx of positive signals in the RSI indicators, but the dominant trend remains the short-term corrective bearish trend along a slope line, with the negative pressure continuing for its trades below the moving average. Simple for the previous 50 days, as shown in the attached chart for a (daily) time period.

Therefore, we expect natural gas to decline during its upcoming trading, especially in the event of its trading stability below the 5.615 level, to target the support level 4.742.

For the second day in a row, the price of gold is trying to rebound higher to compensate for the losses of the recent selling operations, which drove it towards the support level of 1787 dollars per ounce. Gold futures trimmed their losses as the US dollar fell from its highest level in two decades last week.

Concerns about growth after data showed a contraction in Chinese industrial production. A report showing an unexpected contraction in manufacturing activity in New York in May boosted demand for the safe-haven metal. Data from the National Bureau of Statistics showed that China’s industrial output shrank 2.9% year-on-year in April, missing expectations for an increase of 0.4% and down from 5% in March.

On the US economic news front, manufacturing activity in New York contracted unexpectedly in May, according to a report from the Federal Reserve Bank of New York. Where the Federal Reserve Bank of New York said that the general business conditions index fell to -11.6 negative in May from positive 24.6 in April. The negative reading indicates a contraction in regional manufacturing activity. Economists had expected the index to decline to a positive 15.5, which would still indicate growth in the sector.

Today, the US dollar will be affected by the announcement of US retail sales figures, along with the industrial production rate and new statements from US Central Bank Governor Jerome Powell.

The Federal Reserve is gradually pushing its benchmark US short-term interest rate away from its record low near zero, where it has spent most of the pandemic. He also said that he may continue to raise rates by twice the usual amount in upcoming meetings. Investors are concerned that the US central bank could cause a recession if it raises interest rates too much or too quickly. Meanwhile, persistent supply chain problems continue to fuel inflation, and the recent COVID-19 lockdowns in China have raised fears that they may worsen. Russia’s war against Ukraine has heightened the volatility of already high energy prices, which could also drive up inflation.

According to gold technical analysis: On the daily chart, the price of gold will have 1800 dollars per ounce, a separating line between bears and bulls. Stability below it will support the move towards the support levels of 1782 and 1760 dollars per ounce, thus strengthening the downside trend. On the other hand, the resistance levels of 1842 and 1865 dollars for an ounce are important for the bulls to control the direction of gold again. I still prefer buying gold from every bearish level. The price of gold today will be affected by the price of the US dollar and the extent to which investors take risks or not, as well as the reaction from the situation in China and the course of the Russian-Ukrainian war.