US NATGAS: New England EOD – Power Burns Drop

• RES 4: 0.8494 High Aug 26 ‘24        
• RES 3: 0.8474 High Jan 20 and a key resistance
• RES 2: 0.8428/8450 High Mar 18 / 11 and the bull trigger
• RES 1: 0.8395 High Mar 24      
• PRICE: 0.8365 @ 16:47 GMT Mar 26 
• SUP 1: 0.8333 Low Mar 26
• SUP 2: 0.8321 61.8% retracement of the Mar 3 - 11 bull leg 
• SUP 3: 0.8391 76.4% retracement of the Mar 3 - 11 bull leg 
• SUP 4: 0.8241 Low Mar 3 and a key support 

EURGBP has traded lower before a mid-session rally. Wednesday’s strength off the intraday low highlights a possible reversal. A strong daily close Wednesday would strengthen the bullish significance of today’s bounce. Note that MA studies are in a bull-mode position. This suggests that the pullback from the Mar 11 high, has been a correction. Resistance to watch is 0.8395, the Mar 24 high. Key near-term support lies at 0.8333, today’s intraday low.   

• Crude prices are trading higher today amid signs of rising tensions in the Middle East. Supply-side risks remain from increased US sanctions against Iran and tariff threats for countries importing Venezuelan oil.
• WTI May 25 is up by 1% at $69.7/bbl.
• Despite recent gains, a bearish trend condition in WTI futures remains intact. However, a key pivot resistance at $69.14, the 50-day EMA, has been pierced. A clear breach of this hurdle would strengthen a bullish theme and open $70.98, the Feb 25 high.
• For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low.
• Meanwhile, copper has risen further today amid reports that US tariffs on copper imports could be coming earlier than expected, within the next several weeks.
• Copper is currently up by 0.5% at $523/lb, having reached a record high at $537 earlier in the session.
• While copper prices are technically overbought, history shows they can tolerate extended periods of stronger prices for a longer duration than the current rally.
• From a technical perspective, a bull cycle in copper futures remains in play, with price testing resistance at $537.30, the 2.5 projection of the Jan 2 - 17 - Feb 3 price swing earlier. A break of this level would open round number resistance at $540 next.
• Spot gold is unchanged today at $3,019/oz, as the yellow metal consolidates below last week’s record high at $3,057.
• A clear uptrend in gold remains intact, with sights on $3,079.2 next, a Fibonacci projection.

• Tomorrow’s advance trade report for February will likely be looked at more closely than usual, although there will only be so many conclusions that can be drawn ahead of the full release on Apr 3.
• January saw a surge in monetary gold imports in January in what was seen primarily as an arbitrage play, with these non-productive assets captured in import data but not in GDP data.
• We’ll get a hint of whether this has been repeated by whether there’s another strong increase in imports of “industrial supplies” after they jumped 34% M/M in Jan after 19% in Dec.
• The subsequent full release showed this was driven by “finished metal shapes” rising 149% M/M after 202% M/M, leaving imports at 10x their typical monthly level. Details hidden within the report suggested this was driven by precious metal bars.
• Comex gold inventory data suggest a further strong increase in monetary gold imports in February could be on the cards. Gold inventories increased a further 25% through February (and are since 7% higher this month in data up to Mar 21) after the 47% surge in January and 19% in December.
• Silver inventories have also seen strong increases, and at a faster rate than in January (15% in Feb vs 12.5% in Jan) which could further add to this effect but very much secondary to the gold swings.
• Indeed, Bloomberg consensus currently eyes a goods trade deficit of $138bn in Feb, narrowing from $156bn in Jan but still above the $122bn in Dec and $104bn in Nov.
• This should see a further widening in the goods trade deficit in trend terms, with the $127bn three-month average to January equivalent to ~5.1% GDP vs 4.1% GDP in the three months prior to October.
• As for what else to watch in the advance release, we will keep an eye on consumer and capital goods which also saw a sizeable increase in January in potential tariff front-running. Business surveys this could have continued in February with indicators subsequently softer in March.