WTI Oil Tested The $78 Level As Dollar Rallied

Key Insights

• The strong rebound of the U.S. dollar put pressure on commodity markets. 
• Silver was down by 4% as traders took profits off the table after the recent rally. 
• Copper moved back towards the $3.80 level.

WTI Oil Retreats After An Unsuccessful Attempt To Settle Above $82.50

WTI oil lost momentum and pulled back from $82.50 to $78.00 as traders reacted to the better-than-expected ISM Non-Manufacturing report from the U.S.

Earlier, oil markets were moving higher as traders bet on rising demand in China. The country is expected to relax its zero-COVID policy on Wednesday.

OPEC+ decision to keep production at current levels had little impact on the market. Interestingly, traders have almost ignored the Russian oil price cap, which was set at $60 per barrel. Perhaps, the market is waiting for additional clarity on this issue.

Meanwhile, Russia plans to pass a law that would prohibit supplying oil to countries that participate in the price cap scheme. It remains to be seen whether this move will provide additional support to oil markets.

Natural Gas Is Under Strong Pressure As Weather Forecast Changes

Natural gas gained strong downside momentum and moved towards the $5.65 level. The market lost support when the U.S. banned the rail strike, and traders have started to get out of their long positions in natural gas.

Meanwhile, the weather forecast has changed, and analysts expect that natural gas demand will be low in the near term. The change in the weather forecast served as an additional bearish catalyst for natural gas markets.

Gold Tested Support At $1775

Gold  found itself under strong pressure as Treasury yields moved higher after the release of the U.S. ISM Services PMI report. The strong dollar put additional pressure on gold.

Gold has already managed to get below the support at $1775 and is moving towards the next support level at $1765. In case gold settles below $1765, it will head towards the support at $1750. A move below $1750 will push gold towards the support at $1730.

On the upside, gold needs to get back above $1775 to have a chance to gain upside momentum in the near term. The next resistance level for gold is located at $1785. A move above this level will open the way to the test of the resistance at $1800.

Other precious metals are also moving lower. Silver has found itself under strong pressure and declined below the $22.50 level as traders took profits after the recent rally. Platinum pulled back towards $1015, while palladium tested support at $1850.

Copper Declines As Traders Take Profits After Rally

Copper pulled back towards the $3.80 level amid a broad pullback in commodity markets. The strong rebound of the U.S. dollar triggered profit-taking after the recent rally.

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