Natural gas futures broke out of a two-week range to finish higher for the week with buyers getting help from a drop in production. Futures were dragged higher by strengthening forward prices, which rose despite the absence of early summer heat in the weather forecasts to drive demand.
Natural gas futures opened sharply lower on Monday and the subsequent selling pressure drove the market through the previous session's low, reaffirming the downtrend on the daily chart. However, the move took the market into a technical support zone and the selling pressure subsided at $2.726.
Gold futures are drifting lower, while posting an inside move on Monday. The price action suggests investor indecision. Traders are currently assessing the impact of President Trump's decision to extend the deadline for potential tariffs against China on investor demand for risk, and future Fed monetary policy decisions.
Natural gas futures settled higher last week, but not before producing a volatile two-sided trade. The market gapped higher and rallied early in the week then broke into the gap before reversing back to the upside. The price action was all weather driven with traders reacting to forecasts over the next two weeks calling for extreme cold then warm then extreme cold next week-end. There is also another forecast calling for the pattern to repeat the last week of January and the first week of February.
Natural gas futures are trading lower early Wednesday after closing with a loss the previous session and below a key technical area. The selling pressure was fueled by concerns over current weather models that are predicting a delay in the return of colder temperatures previously predicted for the end of December.