Natural Gas Tests Multi-Year Highs As Europe’s Energy Crisis Worsens

Key Insights

• U.S. natural gas markets moved to multi-year highs as European natural gas markets tested new highs. 
• In Europe, traders reacted to Gazprom’s decision to halt supplies via Nord Stream 1 for three days. 
• U.S. dollar rallied towards yearly highs, putting significant pressure on precious metals. 

Natural Gas Rallies Towards $10.00

Natural gas prices made an attempt to settle above $10.00 as traders focused on the developments in the European natural gas markets.

In Europe, prices tested new highs after Russia’s Gazprom announced that it would shut Nord Stream 1 for three days, starting from August 31. The official reason for the shutdown is maintenance, but European officials are worried that Gazprom may not reopen the pipeline on September 3.

The direct impact of the European crisis on the U.S. natural gas markets is limited as Freeport LNG is not operating. Freeport LNG is expected to resume partial operations in October, which will serve as an additional bullish catalyst for domestic natural gas markets.

At this point, the upside trend in natural gas markets stays strong. Natural gas prices found strong support near the $9.00 level and are trying to settle above the $10.00 level. The market will probably face some resistance in the next few days due to profit-taking, but it will need strong catalysts for a change of trend.

Platinum Remains Under Strong Pressure Amid Recession Worries

Platinum tested new lows today as the energy crisis in Europe fueled concerns about the health of the European economy.

Back at the beginning of August, analysts lowered their forecasts for palladium and platinum due to global economic slowdown. According to their forecasts, platinum was expected to average $900 per ounce in the third quarter of 2022.

Currently, platinum is trying to settle below the $850 level. Silver also remains under pressure as it is sensitive to industrial demand.

In the upcoming trading sessions, platinum traders will remain focused on general economic outlook and the dynamics of the U.S. dollar. Recession worries have already pushed the American currency to new highs, which was bearish for precious metals. In case the U.S. dollar stays strong, platinum will have a good chance to settle below the $850 level.

For a look at all of today’s economic events, check out our economic calendar.